[ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
PAGE | ||||||||||||||
PART I. | ||||||||||||||
Item 1. | Financial Statements (Unaudited) | |||||||||||||
Consolidated Balance Sheets, as of September 30, 2010 (Unaudited) and December 31, 2009 | ||||||||||||||
Consolidated Statements of Operations (Unaudited) for the three months and nine months ended September 30, 2010 and 2009 | 4 | |||||||||||||
Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2010 and 2009 | 5 | |||||||||||||
Notes to Consolidated Financial Statements | 6 | |||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 | ||||||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 19 | ||||||||||||
Item 4. | Controls and Procedures | 20 | ||||||||||||
PART II. | ||||||||||||||
Item 1A. | Risk Factors | 21 | ||||||||||||
Item 6. | Exhibits | 21 | ||||||||||||
SIGNATURES | 22 | |||||||||||||
2
PART I -– FINANCIAL INFORMATION
June 30, 2010 | December 31, 2009 | |||||||||||||
(Unaudited) | ||||||||||||||
Assets | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 11,442,740 | $ | 13,559,088 | ||||||||||
Accounts receivable | 649,268 | 1,542,272 | ||||||||||||
Inventories | 391,241 | 329,553 | ||||||||||||
Deferred costs | 644,919 | 963,053 | ||||||||||||
Prepaid expenses and other current assets | 96,376 | 155,255 | ||||||||||||
Total current assets | 13,224,544 | 16,549,221 | ||||||||||||
Equipment, molds, furniture and fixtures, net | 310,771 | 317,310 | ||||||||||||
Patent rights, net | 722,570 | 742,399 | ||||||||||||
Goodwill | 1,095,355 | 1,095,355 | ||||||||||||
Deferred costs | 408,250 | 408,250 | ||||||||||||
Other assets | 30,687 | 30,838 | ||||||||||||
Total Assets | $ | 15,792,177 | $ | 19,143,373 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||
Current Liabilities: | ||||||||||||||
Accounts payable | $ | 1,161,762 | $ | 1,882,158 | ||||||||||
Accrued expenses and other liabilities | 996,841 | 1,048,619 | ||||||||||||
Deferred revenue | 3,644,066 | 5,311,516 | ||||||||||||
Total current liabilities | 5,802,669 | 8,242,293 | ||||||||||||
Deferred revenue - long term | 1,943,737 | 2,050,550 | ||||||||||||
Total liabilities | 7,746,406 | 10,292,843 | ||||||||||||
Stockholders' Equity: | ||||||||||||||
Preferred Stock: $0.01 par, authorized 3,000,000 shares, none outstanding | - | - | ||||||||||||
Common Stock: $0.01 par; authorized 150,000,000 shares; 83,442,686 and 81,799,541 issued and outstanding at June 30, 2010 and December 31, 2009, respectively | 834,427 | 817,995 | ||||||||||||
Additional paid-in capital | 141,869,327 | 139,614,459 | ||||||||||||
Accumulated deficit | (134,043,794 | ) | (130,882,597 | ) | ||||||||||
Accumulated other comprehensive loss | (614,189 | ) | (699,327 | ) | ||||||||||
8,045,771 | 8,850,530 | |||||||||||||
Total Liabilities and Stockholders' Equity | $ | 15,792,177 | $ | 19,143,373 |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 10,227,084 | $ | 13,559,088 | ||||
Accounts receivable | 823,543 | 1,542,272 | ||||||
Inventories | 286,957 | 329,553 | ||||||
Deferred costs | 621,200 | 963,053 | ||||||
Prepaid expenses and other current assets | 84,678 | 155,255 | ||||||
Total current assets | 12,043,462 | 16,549,221 | ||||||
Equipment, molds, furniture and fixtures, net | 312,933 | 317,310 | ||||||
Patent rights, net | 776,208 | 742,399 | ||||||
Goodwill | 1,095,355 | 1,095,355 | ||||||
Deferred costs | 408,250 | 408,250 | ||||||
Other assets | 31,077 | 30,838 | ||||||
Total Assets | $ | 14,667,285 | $ | 19,143,373 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 1,578,602 | $ | 1,882,158 | ||||
Accrued expenses and other liabilities | 1,248,700 | 1,048,619 | ||||||
Deferred revenue | 2,947,856 | 5,311,516 | ||||||
Total current liabilities | 5,775,158 | 8,242,293 | ||||||
Deferred revenue – long term | 1,889,756 | 2,050,550 | ||||||
Total liabilities | 7,664,914 | 10,292,843 | ||||||
Stockholders’ Equity: | ||||||||
Preferred Stock: $0.01 par, authorized 3,000,000 shares, none outstanding | - | - | ||||||
Common Stock: $0.01 par; authorized 150,000,000 shares; | ||||||||
83,777,551 and 81,799,541 issued and outstanding at | ||||||||
September 30, 2010 and December 31, 2009, respectively | 837,778 | 817,995 | ||||||
Additional paid-in capital | 142,495,953 | 139,614,459 | ||||||
Accumulated deficit | (135,675,194 | ) | (130,882,597 | ) | ||||
Accumulated other comprehensive loss | (656,166 | ) | (699,327 | ) | ||||
7,002,371 | 8,850,530 | |||||||
Total Liabilities and Stockholders’ Equity | $ | 14,667,285 | $ | 19,143,373 |
3
ANTARES PHARMA, INC.
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Product sales | $ | 1,151,978 | $ | 1,168,620 | $ | 2,478,030 | $ | 1,992,371 | |||||||||||||||
Development revenue | 497,195 | 321,896 | 1,302,442 | 1,068,733 | |||||||||||||||||||
Licensing revenue | 1,043,845 | 107,879 | 1,879,918 | 805,586 | |||||||||||||||||||
Royalties | 357,969 | 111,171 | 754,683 | 207,946 | |||||||||||||||||||
Total revenue | 3,050,987 | 1,709,566 | 6,415,073 | 4,074,636 | |||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Cost of product sales | 592,365 | 523,931 | 1,248,825 | 968,047 | |||||||||||||||||||
Cost of development revenue | 403,596 | 175,235 | 1,062,115 | 820,289 | |||||||||||||||||||
Total cost of revenue | 995,961 | 699,166 | 2,310,940 | 1,788,336 | |||||||||||||||||||
Gross profit | 2,055,026 | 1,010,400 | 4,104,133 | 2,286,300 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 2,242,788 | 1,745,309 | 4,328,613 | 3,952,068 | |||||||||||||||||||
Sales, marketing and business development | 241,278 | 216,863 | 571,799 | 552,380 | |||||||||||||||||||
General and administrative | 1,121,957 | 1,140,951 | 2,339,589 | 2,452,965 | |||||||||||||||||||
3,606,023 | 3,103,123 | 7,240,001 | 6,957,413 | ||||||||||||||||||||
Operating loss | (1,550,997 | ) | (2,092,723 | ) | (3,135,868 | ) | (4,671,113 | ) | |||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 7,707 | 6,385 | 8,897 | 25,022 | |||||||||||||||||||
Interest expense | (1,182 | ) | (164,557 | ) | (2,478 | ) | (359,790 | ) | |||||||||||||||
Foreign exchange gains (losses) | (10,193 | ) | (21,219 | ) | (35,503 | ) | (28,171 | ) | |||||||||||||||
Other, net | 2,411 | (12,299 | ) | 3,755 | (25,716 | ) | |||||||||||||||||
(1,257 | ) | (191,690 | ) | (25,329 | ) | (388,655 | ) | ||||||||||||||||
Net loss | $ | (1,552,254 | ) | $ | (2,284,413 | ) | $ | (3,161,197 | ) | $ | (5,059,768 | ) | |||||||||||
Basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.07 | ) | |||||||||||
Basic and diluted weighted average common shares outstanding | 82,912,179 | 68,101,137 | 82,592,824 | 68,075,544 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue: | ||||||||||||||||
Product sales | $ | 1,654,215 | $ | 923,155 | $ | 4,132,245 | $ | 2,915,526 | ||||||||
Development revenue | 401,723 | 293,899 | 1,704,165 | 1,362,632 | ||||||||||||
Licensing revenue | 582,817 | 360,776 | 2,462,735 | 1,166,362 | ||||||||||||
Royalties | 483,305 | 76,953 | 1,237,988 | 284,899 | ||||||||||||
Total revenue | 3,122,060 | 1,654,783 | 9,537,133 | 5,729,419 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of product sales | 798,532 | 510,234 | 2,047,357 | 1,478,281 | ||||||||||||
Cost of development and licensing revenue | 280,982 | 246,121 | 1,343,097 | 1,066,410 | ||||||||||||
Total cost of revenue | 1,079,514 | 756,355 | 3,390,454 | 2,544,691 | ||||||||||||
Gross profit | 2,042,546 | 898,428 | 6,146,679 | 3,184,728 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 2,332,712 | 2,004,921 | 6,661,325 | 5,956,989 | ||||||||||||
Sales, marketing and business development | 204,750 | 173,797 | 776,549 | 726,177 | ||||||||||||
General and administrative | 1,170,041 | 1,262,554 | 3,509,630 | 3,715,519 | ||||||||||||
3,707,503 | 3,441,272 | 10,947,504 | 10,398,685 | |||||||||||||
Operating loss | (1,664,957 | ) | (2,542,844 | ) | (4,800,825 | ) | (7,213,957 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 12,430 | 951 | 21,327 | 25,973 | ||||||||||||
Interest expense | (942 | ) | (270,157 | ) | (3,420 | ) | (629,947 | ) | ||||||||
Foreign exchange gains (losses) | 22,012 | (5,532 | ) | (13,491 | ) | (33,703 | ) | |||||||||
Other, net | 57 | (6,802 | ) | 3,812 | (32,518 | ) | ||||||||||
33,557 | (281,540 | ) | 8,228 | (670,195 | ) | |||||||||||
Net loss | $ | (1,631,400 | ) | $ | (2,824,384 | ) | $ | (4,792,597 | ) | $ | (7,884,152 | ) | ||||
Basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.11 | ) | ||||
Basic and diluted weighted average common shares outstanding | 83,615,043 | 75,870,525 | 82,937,306 | 70,702,423 |
4
ANTARES PHARMA, INC.
For the Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (4,792,597 | ) | $ | (7,884,152 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 137,492 | 175,706 | ||||||
Gain on sale of equipment, molds, furniture and fixtures | (14,980 | ) | - | |||||
Stock-based compensation expense | 889,188 | 884,379 | ||||||
Amortization of debt discount and issuance costs | - | 206,519 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 626,165 | 823,715 | ||||||
Inventories | 42,596 | (144,792 | ) | |||||
Prepaid expenses and other current assets | 68,687 | 40,274 | ||||||
Deferred costs | 348,335 | 178,399 | ||||||
Accounts payable | (292,715 | ) | (196,124 | ) | ||||
Accrued expenses and other current liabilities | 173,559 | 366,448 | ||||||
Deferred revenue | (2,511,529 | ) | 2,534,619 | |||||
Net cash used in operating activities | (5,325,799 | ) | (3,015,009 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of equipment, molds, furniture and fixtures | (61,621 | ) | (1,081 | ) | ||||
Additions to patent rights | (82,196 | ) | (117,903 | ) | ||||
Proceeds from sales of equipment, molds, furniture and fixtures | 14,980 | - | ||||||
Net cash used in investing activities | (128,837 | ) | (118,984 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options and warrants | 2,035,480 | 95,322 | ||||||
Proceeds from sale of common stock | - | 10,527,650 | ||||||
Principal payments on long-term debt | - | (5,014,390 | ) | |||||
Net cash provided by financing activities | 2,035,480 | 5,608,582 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 87,152 | (14,596 | ) | |||||
Net increase (decrease) in cash and cash equivalents | (3,332,004 | ) | 2,459,993 | |||||
Cash and cash equivalents: | ||||||||
Beginning of period | 13,559,088 | 13,096,298 | ||||||
End of period | $ | 10,227,084 | $ | 15,556,291 | ||||
For the Six Months Ended June 30, | |||||||||||
2010 | 2009 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (3,161,197 | ) | $ | (5,059,768 | ) | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 88,708 | 114,364 | |||||||||
Gain on sale of equipment, molds, furniture and fixtures | (14,980 | ) | - | ||||||||
Stock-based compensation expense | 565,705 | 518,867 | |||||||||
Amortization of debt discount and issuance costs | - | 96,521 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 801,466 | 450,566 | |||||||||
Inventories | (61,688 | ) | (124,974 | ) | |||||||
Prepaid expenses and other current assets | 55,687 | 27,359 | |||||||||
Deferred costs | 324,607 | 449,568 | |||||||||
Accounts payable | (702,299 | ) | 135,355 | ||||||||
Accrued expenses and other current liabilities | (28,422 | ) | (11,449 | ) | |||||||
Deferred revenue | (1,689,494 | ) | (1,350,943 | ) | |||||||
Net cash used in operating activities | (3,821,907 | ) | (4,754,534 | ) | |||||||
Cash flows from investing activities: | |||||||||||
Purchases of equipment, molds, furniture and fixtures | (40,434 | ) | (1,081 | ) | |||||||
Additions to patent rights | (47,136 | ) | (85,920 | ) | |||||||
Proceeds from sales of equipment, molds, furniture and fixtures | 14,980 | - | |||||||||
Net cash used in investing activities | (72,590 | ) | (87,001 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options and warrants | 1,692,826 | 53,667 | |||||||||
Principal payments on long-term debt | - | (1,260,584 | ) | ||||||||
Net cash provided by (used in) financing activities | 1,692,826 | (1,206,917 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 85,323 | (10,477 | ) | ||||||||
Net decrease in cash and cash equivalents | (2,116,348 | ) | (6,058,929 | ) | |||||||
Cash and cash equivalents: | |||||||||||
Beginning of period | 13,559,088 | 13,096,298 | |||||||||
End of period | $ | 11,442,740 | $ | 7,037,369 | |||||||
5
ANTARES PHARMA, INC.
1. Description of Business
1. | Description of Business |
2. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United State of America for interim financial information and with the instructions to Form 10-Q and Article 10 of the Securities and Exchange Commission's Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying consolidated financial statements and notes should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2009. Operating results for the three and six-month periods ended June 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.
3. Stockholders' Equity
Common Stock
Warrant and stock option exercises in the first six months of 2010 and 2009 resulted in proceeds of $1,692,826 and $53,667, respectively, and in the issuance of 1,531,101 and 85,333 shares of common stock, respectively.
Stock Options and Warrants
2. | Basis of Presentation |
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of the Securities and Exchange Commission's Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United |
States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying consolidated financial statements and notes should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. Operating results for the three and nine-month periods ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. |
3. | Stockholders’ Equity |
Common Stock |
Warrant and stock option exercises in the first nine months of 2010 and 2009 resulted in proceeds of $2,035,480 and $95,322, respectively, and in the issuance of 1,804,884 and 137,916 shares of common stock, respectively. |
Stock Options and Warrants |
6
The Company'sCompany’s 2008 Equity Compensation Plan (the "Plan"“Plan”) allows for the grants of options, restricted stock, stock units, stock appreciation rights and/or performance awards to officers, directors, consultants and employees. Under the Plan, the maximum number of shares of stock that may be granted to any one participant during a calendar year is 1,000,000 shares. Options to purchase shares of common stock are granted at exercise prices not less than 100% of the fair market value on the dates of grant. The term of the options range from three to eleven years and theythe options vest in varying periods. In May 2010, the shareholders approved an amendment to the Plan to increase the maximum number of shares authorized for issuance by 1,500,000 from 10,000,000 to 11,500,000 from 10,000,000. 11,500,000. & #160;As of JuneSeptember 30, 2010, the Plan had 2,024,0221,886,522 shares available for grant. The number of shares available for grant does not take into consideration potential stock awards that could result in the issuance of shares of common stock if certain performance conditions are met, as discussed under "Stock Awards"“Stock Awards” below. Stock option exercises are satisfied through the issuance of new shares.
Number of Shares | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value ($) | |||||||||||||||||||||||
Outstanding at December 31, 2009 | 8,339,684 | 1.13 | ||||||||||||||||||||||||
Granted | 552,487 | 1.49 | ||||||||||||||||||||||||
Exercised | (1,254,851 | ) | 1.02 | |||||||||||||||||||||||
Cancelled | (252,100 | ) | 2.07 | |||||||||||||||||||||||
Outstanding at June 30, 2010 | 7,385,220 | 1.14 | 7.3 | 5,079,000 | ||||||||||||||||||||||
Exercisable at June 30, 2010 | 5,253,537 | 1.22 | 6.6 | 3,327,000 |
Number of Shares | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value ($) | |||||||||||||
Outstanding at December 31, 2009 | 8,339,684 | 1.13 | ||||||||||||||
Granted | 647,487 | 1.49 | ||||||||||||||
Exercised | (1,334,434 | ) | 1.00 | |||||||||||||
Cancelled | (252,100 | ) | 2.07 | |||||||||||||
Outstanding at September 30, 2010 | 7,400,637 | 1.15 | 7.0 | 3,080,000 | ||||||||||||
Exercisable at September 30, 2010 | 5,535,719 | 1.22 | 6.5 | 2,140,000 |
June 30, | ||||||||||||||
2010 | 2009 | |||||||||||||
Risk-free interest rate | 2.2 | % | 1.9 | % | ||||||||||
Annualized volatility | 61.0 | % | 88.0 | % | ||||||||||
Weighted average expected life, in years | 5.0 | 5.0 | ||||||||||||
Expected dividend yield | 0.0 | % | 0.0 | % |
September 30, | ||||||
2010 | 2009 | |||||
Risk-free interest rate | 2.1 | % | 1.9 | % | ||
Annualized volatility | 61.0 | % | 88.0 | % | ||
Weighted average expected life, in years | 5.0 | 5.0 | ||||
Expected dividend yield | 0.0 | % | 0.0 | % |
7
2010 and 180,681 were awarded prior to 2010. A total of approximately $18,200 of compensationCompensation expense was recorded in the first half of 2010 in connection with awards considered probable of achievement.
achievement was approximately $13,300 and $31,500 for the three and nine-month periods ended September 30, 2010, respectively, and approximately $106,000 and $122,000 for the three and nine-month periods ended September 30, 2009, respectively.
4. Net Loss Per Share
4. | Net Loss Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||
Net loss applicable to common shares | $ | (1,552,254 | ) | $ | (2,284,413 | ) | $ | (3,161,197 | ) | $ | (5,059,768 | ) | ||||||||||||||
Basic and diluted weighted average common shares outstanding | 82,912,179 | 68,101,137 | 82,592,824 | 68,075,544 | ||||||||||||||||||||||
Basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.07 | ) |
5. Industry Segment and Operations by Geographic Areas
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net loss applicable to common shares | $ | (1,631,400 | ) | $ | (2,824,384 | ) | $ | (4,792,597 | ) | $ | (7,884,152 | ) | ||||
Basic and diluted weighted average common shares outstanding | 83,615,043 | 75,870,525 | 82,937,306 | 70,702,423 | ||||||||||||
Basic and diluted net loss per common share | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.11 | ) |
5. | Industry Segment and Operations by Geographic Areas |
June 30, 2010 | December 31, 2009 | ||||||||||||||||
United States of America | $ | 15,334,350 | $ | 17,384,011 | |||||||||||||
Switzerland | 457,827 | 1,759,362 | |||||||||||||||
$ | 15,792,177 | $ | 19,143,373 |
September 30, 2010 | December 31, 2009 | |||||||
United States of America | $ | 14,123,229 | $ | 17,384,011 | ||||
Switzerland | 544,056 | 1,759,362 | ||||||
$ | 14,667,285 | $ | 19,143,373 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
United States of America | $ | 1,546,161 | $ | 933,979 | $ | 3,246,336 | $ | 2,057,400 | |||||||||||||||
Europe | 1,408,261 | 773,203 | 2,955,195 | 1,955,938 | |||||||||||||||||||
Other | 96,565 | 2,384 | 213,542 | 61,298 | |||||||||||||||||||
$ | 3,050,987 | $ | 1,709,566 | $ | 6,415,073 | $ | 4,074,636 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
United States of America | $ | 1,500,552 | $ | 1,091,268 | $ | 4,746,888 | $ | 3,148,668 | ||||||||
Europe | 1,557,820 | 519,142 | 4,513,015 | 2,475,080 | ||||||||||||
Other | 63,688 | 44,373 | 277,230 | 105,671 | ||||||||||||
$ | 3,122,060 | $ | 1,654,783 | $ | 9,537,133 | $ | 5,729,419 |
Significant customers comprising 10% or more of total revenue were as follows: |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Ferring | $ | 1,557,819 | $ | 497,943 | $ | 4,473,920 | $ | 2,075,717 | ||||||||
Teva | 1,290,478 | 776,373 | 3,953,783 | 2,024,105 | ||||||||||||
Population Council | 65,987 | 207,553 | 150,347 | 642,243 |
6. | Comprehensive Loss |
8
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net loss | $ | (1,631,400 | ) | $ | (2,824,384 | ) | $ | (4,792,597 | ) | $ | (7,884,152 | ) | ||||
Change in cumulative translation adjustment | (41,977 | ) | (3,061 | ) | 43,161 | 62,054 | ||||||||||
Comprehensive loss | $ | (1,673,377 | ) | $ | (2,827,445 | ) | $ | (4,749,436 | ) | $ | (7,822,098 | ) |
7. | Revenue Recognition Change |
Significant customers comprising 10% or more of total revenue were as follows:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Ferring | $ | 1,389,163 | $ | 752,932 | $ | 2,916,101 | $ | 1,577,774 | |||||||||||||||
Teva | 1,335,267 | 655,416 | 2,663,305 | 1,247,732 | |||||||||||||||||||
Population Council | 84,360 | 41,448 | 84,360 | 434,690 |
6. Comprehensive Loss
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||
Net loss | $ | (1,552,254 | ) | $ | (2,284,413 | ) | $ | (3,161,197 | ) | $ | (5,059,768 | ) | |||||||||||
Change in cumulative translation adjustment | 67,095 | (8,608 | ) | 85,138 | 65,115 | ||||||||||||||||||
Comprehensive loss | $ | (1,485,159 | ) | $ | (2,293,021 | ) | $ | (3,076,059 | ) | $ | (4,994,653 | ) |
7. Revenue Recognition Change
In the third quarter of 2009, the Company elected early adoption of Financial Accounting Standards Board ("FASB"(“FASB”) Accounting Standards Update ("ASU"(“ASU”) 2009-13, "Revenue“Revenue Arrangements with Multiple Deliverables" ("ASU 2009-13")Deliverables”. ASU 2009-13, which amended FASB ASC 605-25, "Multiple-Element“Multiple-Element Arrangements,"” is effective for arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, but allows for early adoption. ASU 2009-13 requires a vendor to allocate revenue to each unit of accounting in arrangements involving multiple deliverables. It changes the level of evidence of standalone selling price required to separate deliverables by allowing a vendor to make its best estimate of the standalone selling price of deliverables when vendor specific objective evidence or third party evidence of selling price is not available. As a result of adoption of ASU 2009-13, deferred revenues and deferred costs associated with one License, Development and Supply Agreement with Teva will be recognized as revenues and expenses earlier than would otherwise have occurred. Adoption of ASU 2009-13 had no impact on the accounting for any of the Company'sCompany’s other revenue arrangements containing multiple deliverables. Revenues and expenses generated in connection with future multiple element arrangements will be accounted for under ASU 2009-13 and will likely often be recognized over shorter periods than would have occurred prior to adoption of ASU 2009-13.
this standard, which could produce results that are materially different from results that would have occurred under the previously applied accounting standards.
did not affect quarter and year-to-date net loss per common share.
Three Months Ended June 30, 2009 | |||||||||||||||||
As Previously Reported | Adoption Adjustments | As Reported After Adoption | |||||||||||||||
Development revenue | $ | 299,674 | $ | 22,222 | $ | 321,896 | |||||||||||
Licensing revenue | 82,379 | 25,500 | 107,879 | ||||||||||||||
Total revenue | 1,661,844 | 47,722 | 1,709,566 | ||||||||||||||
Cost of development and licensing revenue | 96,711 | 78,524 | 175,235 | ||||||||||||||
Total cost of revenue | 620,642 | 78,524 | 699,166 | ||||||||||||||
Gross profit | 1,041,202 | (30,802 | ) | 1,010,400 | |||||||||||||
Operating loss | (2,061,921 | ) | (30,802 | ) | (2,092,723 | ) | |||||||||||
Net loss | (2,253,611 | ) | (30,802 | ) | (2,284,413 | ) | |||||||||||
Basic and diluted net loss per common share | $ | (0.03 | ) | $ | (0.03 | ) |
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Three Months Ended September 30, 2009 | ||||||||||||
As Previously | Correction | As Reported | ||||||||||
Reported | Adjustments | After Correction | ||||||||||
Development revenue | $ | 382,788 | $ | 88,889 | $ | 293,899 | ||||||
Licensing revenue | 658,276 | 297,500 | 360,776 | |||||||||
Total revenue | 2,041,172 | 386,389 | 1,654,783 | |||||||||
Cost of development and licensing revenue | 701,960 | 455,839 | 246,121 | |||||||||
Total cost of revenue | 1,212,194 | 455,839 | 756,355 | |||||||||
Gross profit | 828,978 | 69,450 | 898,428 | |||||||||
Operating loss | (2,612,294 | ) | 69,450 | (2,542,844 | ) | |||||||
Net loss | (2,893,834 | ) | 69,450 | (2,824,384 | ) | |||||||
Net loss per common share | $ | (0.04 | ) | $ | (0.04 | ) |
Six Months Ended June 30, 2009 | |||||||||||||||||
As Previously Reported | Adoption Adjustments | As Reported After Adoption | |||||||||||||||
Development revenue | $ | 979,844 | $ | 88,889 | $ | 1,068,733 | |||||||||||
Licensing revenue | 508,086 | 297,500 | 805,586 | ||||||||||||||
Total revenue | 3,688,247 | 386,389 | 4,074,636 | ||||||||||||||
Cost of development and licensing revenue | 364,450 | 455,839 | 820,289 | ||||||||||||||
Total cost of revenue | 1,332,497 | 455,839 | 1,788,336 | ||||||||||||||
Gross profit | 2,355,750 | (69,450 | ) | 2,286,300 | |||||||||||||
Operating loss | (4,601,663 | ) | (69,450 | ) | (4,671,113 | ) | |||||||||||
Net loss | (4,990,318 | ) | (69,450 | ) | (5,059,768 | ) | |||||||||||
Basic and diluted net loss per common share | $ | (0.07 | ) | $ | (0.07 | ) |
8. New Accounting Pronouncements
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Item 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Management's
· | the impact of new accounting pronouncements; |
· | our expectations regarding product development, manufacturing and partnering of Anturol®; |
· | our expectations regarding continued product development with Teva; |
· | our plans regarding potential manufacturing and marketing partners; |
· | our future cash flow; |
· | our expectations regarding a net loss for the year ending December 31, 2010; and |
· | our ability to raise additional financing, reduce expenses or generate funds in light of our current and projected level of operations and general economic conditions. |
· | our inability to compete successfully against new and existing competitors or to leverage our marketing capabilities and our research and development capabilities; |
· | our ability to partner Anturol®; |
· | delays in product introduction and marketing or interruptions in supply; |
· | a decrease in business from our major customers and partners; |
· | adverse economic and political conditions; |
· | our inability to obtain additional financing, reduce expenses or generate funds when necessary; |
· | our inability to attract and retain key personnel; and |
· | our inability to effectively market our services or obtain and maintain arrangements with our customers, partners and manufacturers. |
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The following discussion and analysis, the purpose of which is to provide investors and others with information that we believe to be necessary for an understanding of our financial condition, changes in financial condition and results of operations, should be read in conjunction with the financial statements, notes and other information contained in this report.
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$360,776 and $805,586,$1,166,362, respectively, in 2009. The increases were primarily duedu e to recognition of revenue deferred in 2009 under an Exclusive License Agreement with Ferring, along with milestone payments received from Teva in the second quarter of 2010 and BioSante in the first quarter of 2010. Royalty revenue increased in the three and six-monthnine-month periods to $357,969$483,305 and $754,683,$1,237,988, respectively, in 2010 from $111,171$76,953 and $207,946$284,899 in the same prior-year periods, primarily due to royalties received from Teva in connection with sales of their hGH Tev-Tropin®Tev-Tropin®.
so ld. The increase in the nine-month period was primarily due to an increase in sales while fixed overhead expenses remained relatively constant.
· | Anturol® oxybutynin gel for treatment of OAB; |
· | Vibex™ autoinjector for delivery of epinephrine for emergency treatment of allergic reactions; and |
· | Vibex MTX™ autoinjector for delivery of methotrexate for treatment of rheumatoid arthritis. |
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Liquidity and Capital Resources
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Net Cash Used in Investing Activities
our credit facility.
15
The development timelines of the auto and pen injectors related to the Teva products are controlled by Teva. We expect development related to the Teva products to continue in 2010, but the timing and extent of near-term future development will be dependent on certain decisions made by Teva. In 2009, we received a payment from Teva in the amount of $4,076,375 in connection with an amendment to a License, Development and Supply Agreement signed in July 2006 related to a fixed, single-dose, disposable injector product containing epinephrine using our Vibex™ auto injector platform. Although this payment and certain upfront and milestone payments have been received from Teva, there have been no commercial sales from the auto injector or pen injector programs, timelines have been extended and there can be no assuranceassur ance that there ever will be commercial sales or future milestone payments under these agreements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
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Internal Control over Financial Reporting
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PART II - OTHER INFORMATION
Item 6. | EXHIBITS. |
Exhibit No. | ||||||||
Description | ||||||||
31.1 | Certificate of the Chief Executive Officer of Antares Pharma, Inc. required by | |||||||
Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. | ||||||||
31.2 | Certificate of the Chief Financial Officer of Antares Pharma, Inc. required by | |||||||
Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended. | ||||||||
32.1 | Certificate of the Chief Executive Officer of Antares Pharma, Inc. required by | |||||||
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. | ||||||||
32.2 | Certificate of the Chief Financial Officer of Antares Pharma, Inc. required by | |||||||
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. |
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SIGNATURES
SIGNATURES |
ANTARES PHARMA, INC. | ||||||||
/s/ Paul K. Wotton | ||||||||
Dr. Paul K. Wotton | ||||||||
President and Chief Executive Officer | ||||||||
November 10, 2010 | /s/ Robert F. Apple | |||||||
Robert F. Apple | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
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