☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 76-0837053 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
355 Alhambra Circle Suite 801 Coral Gables, Florida | 33134 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Ticker Symbol | Name of Exchange on Which Registered |
Common Stock, par value $0.001 per share | CPRX | NASDAQ Capital Market |
Large accelerated filer | ☐ | Accelerated Filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
PART I. FINANCIAL INFORMATION | ||||||
Item 1. | FINANCIAL STATEMENTS | |||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | 24 | |||||
Item 3. | 35 | |||||
Item 4. | ||||||
PART II. OTHER INFORMATION | ||||||
Item 1. | 36 | |||||
Item 1A. | 37 | |||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 5. | ||||||
Item 6. | 38 | |||||
39 |
June 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 135,295 | $ | 130,237 | $ | 154,836 | $ | 130,237 | ||||||||
Short-term investments | 19,980 | 10,041 | 19,956 | 10,041 | ||||||||||||
Accounts receivable, net | 6,292 | 5,987 | 6,625 | 5,987 | ||||||||||||
Inventory | 7,097 | 4,651 | 6,950 | 4,651 | ||||||||||||
Prepaid expenses and other current assets | 7,641 | 8,328 | 4,428 | 8,328 | ||||||||||||
Total current assets | 176,305 | 159,244 | 192,795 | 159,244 | ||||||||||||
Operating lease right-of-use | 3,201 | — | 3,093 | — | ||||||||||||
Property and equipment, net | 914 | 130 | 951 | 130 | ||||||||||||
Deferred tax assets | 28,701 | 32,971 | 26,400 | 32,971 | ||||||||||||
Deposits | 9 | 9 | 9 | 9 | ||||||||||||
Total assets | $ | 209,130 | $ | 192,354 | $ | 223,248 | $ | 192,354 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 2,924 | $ | 4,256 | $ | 2,752 | $ | 4,256 | ||||||||
Accrued expenses and other liabilities | 13,211 | 18,500 | 17,862 | 18,500 | ||||||||||||
Total current liabilities | 16,135 | 22,756 | 20,614 | 22,756 | ||||||||||||
Operating lease liability, net of current portion | 4,051 | — | 3,973 | — | ||||||||||||
Total liabilities | 20,186 | 22,756 | 24,587 | 22,756 | ||||||||||||
Commitments and contingencies (Note 10) | 0 | 0 | 0 | 0 | ||||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized: NaN issued and outstanding at June 30, 2021 and December 31, 2020 | 0 | — | ||||||||||||||
Common stock, $0.001 par value, 200,000,000 shares authorized; 103,162,041 shares outstanding at June 30, 2021 and December 31, 2020, respectively | 103 | 104 | ||||||||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized: NaN issued and outstanding at September 30, 2021 and December 31, 2020 | 0 | — | ||||||||||||||
Common stock, $0.001 par value, 200,000,000 shares authorized; 103,153,459 shares and 103,781,641 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 103 | 104 | ||||||||||||||
Additional paid-in capital | 226,699 | 223,168 | 231,165 | 223,168 | ||||||||||||
Accumulated deficit | (37,821 | ) | (53,705 | ) | (32,544 | ) | (53,705 | ) | ||||||||
Accumulated other comprehensive income (loss) | (37 | ) | 31 | (63 | ) | 31 | ||||||||||
Total stockholders’ equity | 188,944 | 169,598 | 198,661 | 169,598 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 209,130 | $ | 192,354 | $ | 223,248 | $ | 192,354 | ||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Product revenue, net | $ | 33,636 | $ | 29,605 | $ | 63,841 | $ | 58,741 | $ | 35,890 | $ | 29,167 | $ | 99,731 | $ | 87,908 | ||||||||||||||||
License and other revenue | 2,729 | — | 2,729 | — | 64 | 150 | 2,793 | 150 | ||||||||||||||||||||||||
Total revenues | 36,365 | 29,605 | 66,570 | 58,741 | 35,954 | 29,317 | 102,524 | 88,058 | ||||||||||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of sales | 4,545 | 4,140 | 9,226 | 8,291 | ||||||||||||||||||||||||||||
Cost of sales | 5,310 | 3,879 | 14,536 | 12,170 | ||||||||||||||||||||||||||||
Research and development | 4,450 | 4,350 | 7,457 | 8,573 | 4,487 | 3,749 | 11,944 | 12,322 | ||||||||||||||||||||||||
Selling, general and administrative | 11,532 | 10,833 | 24,248 | 20,896 | 12,153 | 9,985 | 36,401 | 30,881 | ||||||||||||||||||||||||
Total operating costs and expenses | 20,527 | 19,323 | 40,931 | 37,760 | 21,950 | 17,613 | 62,881 | 55,373 | ||||||||||||||||||||||||
Operating income | 15,838 | 10,282 | 25,639 | 20,981 | 14,004 | 11,704 | 39,643 | 32,685 | ||||||||||||||||||||||||
Other income, net | 62 | 111 | 143 | 448 | 68 | 33 | 211 | 481 | ||||||||||||||||||||||||
Net income before income taxes | 15,900 | 10,393 | 25,782 | 21,429 | 14,072 | 11,737 | 39,854 | 33,166 | ||||||||||||||||||||||||
Provision for income taxes | 3,719 | 613 | 5,938 | 1,223 | ||||||||||||||||||||||||||||
Income tax provision (benefit) | 3,743 | (31,603 | ) | 9,681 | (30,380 | ) | ||||||||||||||||||||||||||
Net income | $ | 12,181 | $ | 9,780 | $ | 19,844 | $ | 20,206 | $ | 10,329 | $ | 43,340 | $ | 30,173 | $ | 63,546 | ||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.12 | $ | 0.09 | $ | 0.19 | $ | 0.20 | $ | 0.10 | $ | 0.42 | $ | 0.29 | $ | 0.61 | ||||||||||||||||
Diluted | $ | 0.11 | $ | 0.09 | $ | 0.18 | $ | 0.19 | $ | 0.10 | $ | 0.41 | $ | 0.28 | $ | 0.60 | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 103,407,803 | 103,414,523 | 103,610,138 | 103,410,881 | 103,196,550 | 103,535,431 | 103,470,762 | 103,452,025 | ||||||||||||||||||||||||
Diluted | 107,734,924 | 106,730,423 | 107,299,262 | 106,433,862 | 107,843,196 | 106,316,241 | 107,476,175 | 106,386,617 | ||||||||||||||||||||||||
Net income | $ | 12,181 | $ | 9,780 | $ | 19,844 | $ | 20,206 | $ | 10,329 | $ | 43,340 | $ | 30,173 | $ | 63,546 | ||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||||||||||
Unrealized gain (loss) on available-for-sale | 8 | (85 | ) | (68 | ) | (11 | ) | (26 | ) | (5 | ) | (94 | ) | (16 | ) | |||||||||||||||||
Comprehensive income | $ | 12,189 | $ | 9,695 | $ | 19,776 | $ | 20,195 | $ | 10,303 | $ | 43,335 | $ | 30,079 | $ | 63,530 | ||||||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Total | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | — | 103,782 | $ | 104 | $ | 223,168 | $ | (53,705 | ) | $ | 31 | $ | 169,598 | ||||||||||||||
Issuance of stock options for services | — | — | — | 1,442 | — | — | 1,442 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 90 | — | 188 | — | — | 188 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 129 | — | — | 129 | |||||||||||||||||||||
Repurchase of common stock | — | (67 | ) | — | — | (293 | ) | — | (293 | ) | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (76 | ) | (76 | ) | |||||||||||||||||||
Net income | — | — | — | — | 7,663 | — | 7,663 | |||||||||||||||||||||
Balance at March 31, 2021 | — | 103,805 | 104 | 224,927 | (46,335 | ) | (45 | ) | 178,651 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,388 | — | — | 1,388 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 83 | — | 271 | — | — | 271 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 130 | — | — | 130 | |||||||||||||||||||||
Repurchase of common stock | — | (733 | ) | (1 | ) | — | (3,667 | ) | — | (3,668 | ) | |||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net | — | 7 | — | (17 | ) | — | — | (17 | ) | |||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 8 | 8 | |||||||||||||||||||||
Net income | — | — | — | — | 12,181 | — | 12,181 | |||||||||||||||||||||
Balance at June 30, 2021 | — | 103,162 | 103 | 226,699 | (37,821 | ) | (37 | ) | 188,944 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,380 | — | — | 1,380 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 941 | 1 | 2,954 | — | — | 2,955 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 132 | — | — | 132 | |||||||||||||||||||||
Repurchase of common stock | — | (950 | ) | (1 | ) | — | (5,052 | ) | — | (5,053 | ) | |||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (26 | ) | (26 | ) | |||||||||||||||||||
Net income | — | — | — | — | 10,329 | — | 10,329 | |||||||||||||||||||||
Balance at September 30, 2021 | $ | — | 103,153 | $ | 103 | $ | 231,165 | $ | (32,544 | ) | $ | (63 | ) | $ | 198,661 | |||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Total | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | — | 103,782 | $ | 104 | $ | 223,168 | $ | (53,705 | ) | $ | 31 | $ | 169,598 | ||||||||||||||
Issuance of stock options for services | — | — | — | 1,442 | — | — | 1,442 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 90 | — | 188 | — | — | 188 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 129 | — | — | 129 | |||||||||||||||||||||
Repurchase of common stock | — | (67 | ) | — | — | (293 | ) | — | (293 | ) | ||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (76 | ) | (76 | ) | |||||||||||||||||||
Net income | — | — | — | — | 7,663 | — | 7,663 | |||||||||||||||||||||
Balance at March 31, 2021 | — | 103,805 | 104 | 224,927 | (46,335 | ) | (45 | ) | 178,651 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,388 | — | — | 1,388 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 83 | — | 271 | — | — | 271 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 130 | — | — | 130 | |||||||||||||||||||||
Repurchase of common stock | — | (733 | ) | (1 | ) | — | (3,667 | ) | — | (3,668 | ) | |||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net | — | 7 | — | (17 | ) | — | — | (17 | ) | |||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 8 | 8 | |||||||||||||||||||||
Net income | — | — | — | — | 12,181 | — | 12,181 | |||||||||||||||||||||
Balance at June 30, 2021 | $ | — | 103,162 | $ | 103 | $ | 226,699 | $ | (37,821 | ) | $ | (37 | ) | $ | 188,944 | |||||||||||||
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Total | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | — | 103,397 | $ | 103 | $ | 216,206 | $ | (128,689 | ) | $ | 10 | $ | 87,630 | ||||||||||||||
Issuance of stock options for services | — | — | — | 1,384 | — | — | 1,384 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 12 | — | 26 | — | — | 26 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 136 | — | — | 136 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 74 | 74 | |||||||||||||||||||||
Net income | — | — | — | — | 10,426 | — | 10,426 | |||||||||||||||||||||
Balance at March 31, 2020 | — | 103,409 | 103 | 217,752 | (118,263 | ) | 84 | 99,676 | ||||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,627 | — | — | 1,627 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 13 | — | 36 | — | — | 36 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 167 | — | — | 167 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (85 | ) | (85 | ) | |||||||||||||||||||
Net income | — | — | — | — | 9,780 | — | 9,780 | |||||||||||||||||||||
Balance at June 30, 2020 | $ | — | 103,422 | $ | 103 | $ | 219,582 | $ | (108,483 | ) | $ | (1 | ) | $ | 111,201 | |||||||||||||
For the Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Operating Activities: | ||||||||
Net income | $ | 19,844 | $ | 20,206 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 128 | 43 | ||||||
Stock-based compensation | 3,089 | 3,314 | ||||||
Deferred taxes | 4,270 | — | ||||||
Change in accrued interest and accretion of discount on investments | (6 | ) | (4 | ) | ||||
Reduction in the carrying amount of right-of-use asset | 108 | 721 | ||||||
(Increase) decrease in: | ||||||||
Accounts receivable, net | (305 | ) | 3,775 | |||||
Inventory | (2,446 | ) | 129 | |||||
Prepaid expenses and other current assets and deposits | 687 | (3,170 | ) | |||||
Increase (decrease) in: | ||||||||
Accounts payable | (1,332 | ) | 1,687 | |||||
Accrued expenses and other liabilities | (5,490 | ) | (5,473 | ) | ||||
Operating lease liability | 942 | (750 | ) | |||||
Net cash provided by (used in) operating activities | 19,489 | 20,478 | ||||||
Investing Activities: | ||||||||
Purchases of property and equipment | (912 | ) | — | |||||
Purchases of investments | (10,000 | ) | — | |||||
Proceeds from maturities and sales of investments | — | 5,000 | ||||||
Net cash provided by (used in) investing activities | (10,912 | ) | 5,000 | |||||
Financing Activities: | ||||||||
Payment of employee withholding tax related to stock-based compensation | (17 | ) | — | |||||
Proceeds from exercise of stock options | 459 | 62 | ||||||
Repurchase of common stock | (3,961 | ) | — | |||||
Net cash provided by (used in) financing activities | (3,519 | ) | 62 | |||||
Net increase (decrease) in cash and cash equivalents | 5,058 | 25,540 | ||||||
Cash and cash equivalents—beginning of period | 130,237 | 89,512 | ||||||
Cash and cash equivalents—end of period | $ | 135,295 | $ | 115,052 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for income taxes | $ | 341 | $ | 50 | ||||
Non-cash investing and financing activities: | ||||||||
Unrealized gain (loss) on available-for-sale | $ | (68 | ) | $ | (11 | ) | ||
Operating lease liabilities arising from obtaining right-of-use | $ | 3,309 | $ | — |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Total | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | — | 103,397 | $ | 103 | $ | 216,206 | $ | (128,689 | ) | $ | 10 | $ | 87,630 | ||||||||||||||
Issuance of stock options for services | — | — | — | 1,384 | — | — | 1,384 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 12 | — | 26 | — | — | 26 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 136 | — | — | 136 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | 74 | 74 | |||||||||||||||||||||
Net income | — | — | — | — | 10,426 | — | 10,426 | |||||||||||||||||||||
Balance at March 31, 2020 | — | 103,409 | 103 | 217,752 | (118,263 | ) | 84 | 99,676 | ||||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,627 | — | — | 1,627 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 13 | — | 36 | — | — | 36 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 167 | — | — | 167 | |||||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (85 | ) | (85 | ) | |||||||||||||||||||
Net income | — | — | — | — | 9,780 | — | 9,780 | |||||||||||||||||||||
Balance at June 30, 2020 | — | 103,422 | 103 | 219,582 | (108,483 | ) | (1 | ) | 111,201 | |||||||||||||||||||
Issuance of stock options for services | — | — | — | 1,346 | — | — | 1,346 | |||||||||||||||||||||
Exercise of stock options for common stock | — | 215 | — | 631 | — | — | 631 | |||||||||||||||||||||
Amortization of restricted stock for services | — | — | — | 132 | — | — | 132 | |||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units, net | — | 11 | — | (17 | ) | — | — | (17 | ) | |||||||||||||||||||
Other comprehensive gain (loss) | — | — | — | — | — | (5 | ) | (5 | ) | |||||||||||||||||||
Net income | — | — | — | — | 43,340 | — | 43,340 | |||||||||||||||||||||
Balance at September 30, 2020 | $ | — | 103,648 | $ | 103 | $ | 221,674 | $ | (65,143 | ) | $ | (6 | ) | $ | 156,628 | |||||||||||||
For the Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Operating Activities: | ||||||||
Net income | $ | 30,173 | $ | 63,546 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 159 | 73 | ||||||
Stock-based compensation | 4,601 | 4,792 | ||||||
Deferred taxes | 6,571 | (31,347 | ) | |||||
Change in accrued interest and accretion of discount on investments | (9 | ) | (12 | ) | ||||
Reduction in the carrying amount of right-of-use | 216 | 781 | ||||||
(Increase) decrease in: | ||||||||
Accounts receivable, net | (638 | ) | 4,665 | |||||
Inventory | (2,299 | ) | (2,791 | ) | ||||
Prepaid expenses and other current assets and deposits | 3,900 | (1,263 | ) | |||||
Increase (decrease) in: | ||||||||
Accounts payable | (1,504 | ) | (2,112 | ) | ||||
Accrued expenses and other liabilities | (916 | ) | (3,570 | ) | ||||
Operating lease liability | 942 | (833 | ) | |||||
Net cash provided by (used in) operating activities | 41,196 | 31,929 | ||||||
Investing Activities: | ||||||||
Purchases of property and equipment | (980 | ) | (11 | ) | ||||
Purchases of investments | (10,000 | ) | (10,000 | ) | ||||
Proceeds from maturities and sales of investments | — | 5,000 | ||||||
Net cash provided by (used in) investing activities | (10,980 | ) | (5,011 | ) | ||||
Financing Activities: | ||||||||
Payment of employee withholding tax related to stock-based compensation | (17 | ) | (17 | ) | ||||
Proceeds from exercise of stock options | 3,414 | 693 | ||||||
Repurchase of common stock | (9,014 | ) | — | |||||
Net cash provided by (used in) financing activities | (5,617 | ) | 676 | |||||
Net increase (decrease) in cash and cash equivalents | 24,599 | 27,594 | ||||||
Cash and cash equivalents—beginning of period | 130,237 | 89,512 | ||||||
Cash and cash equivalents—end of period | $ | 154,836 | $ | 117,106 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for income taxes | $ | 1,438 | $ | 2,195 | ||||
Non-cash investing and financing activities: | ||||||||
Unrealized gain (loss) on available-for-sale | $ | (94 | ) | $ | (16 | ) | ||
Operating lease liabilities arising from obtaining right-of-use | $ | 3,309 | $ | — |
1. | Organization and Descriptionof Business. |
2. | Basis of Presentation and Significant Accounting Policies. |
a. | INTERIM FINANCIAL STATEMENTS. 10-Q was derived from the audited financial statements and does not include all disclosures required by U.S. GAAP. |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
b. | PRINCIPLES OF CONSOLIDATION |
c. | USE OF ESTIMATES. |
d. | CASH AND CASH EQUIVALENTS. |
e. | INVESTMENTS |
f. | ACCOUNTS RECEIVABLE, NET. |
g. | INVENTORY. work-in-process first-in, first out (FIFO) flow of goods. The Company began capitalizing inventories post FDA approval of Firdapse® on November 28, 2018 as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to the FDA approval of Firdapse® were recorded as research and development expenses in prior years’ consolidated statements of operations and comprehensive income. If information becomes available that suggests that inventories may not be realizable, the Company may be required to expense a portion or all of the previously capitalized inventories. As of work-in process and finished goods. As of December 31, 2020, inventory consisted mainly ofwork-in-process |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
h. | PREPAID EXPENSES AND OTHER CURRENT ASSETS. Prepaid expenses and other current assets consist primarily of prepaid manufacturing, prepaid tax, prepaid insurance, prepaid subscription fees, prepaid research fees, prepaid commercialization expenses, pre-clinical studies, clinical trials and studies, regulatory affairs and consulting. Prepaid manufacturing consists of advances for the Company’s drug manufacturing activities. Such advances are recorded as expense as the related goods are received or the related services are performed. |
i. | FAIR VALUE OF FINANCIAL INSTRUMENTS. p tember 30, 2021 and December 31, 2020, the fair value of these instruments approximated their carrying value. |
j. | FAIR VALUE MEASUREMENTS. |
Fair Value Measurements at Reporting Date Using (in thousands) | ||||||||||||||||
Balances as of September 30, 2021 | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 38,925 | $ | 38,925 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 104,995 | $ | 104,995 | $ | — | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
Short-term bond funds | $ | 19,956 | $ | 19,956 | $ | — | $ | — | ||||||||
Balances as of December 31, 2020 | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 15,674 | $ | 15,674 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 104,994 | $ | — | $ | 104,994 | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
Short-term bond funds | $ | 10,041 | $ | 10,041 | $ | — | $ | — | ||||||||
2. | Basis of Presentation and Significant Accounting Policies (continued). |
Fair Value Measurements at Reporting Date Using (in thousands) | ||||||||||||||||
Balances as of June 30, 2021 | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 68,663 | $ | 68,663 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 49,996 | $ | 49,996 | $ | — | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
Short-term bond funds | $ | 19,980 | $ | 19,980 | $ | — | $ | — | ||||||||
Balances as of December 31, 2020 | Quoted Prices in Active Markets for Identical Assets/ Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Money market funds | $ | 15,674 | $ | 15,674 | $ | — | $ | — | ||||||||
U.S. Treasuries | $ | 104,994 | $ | — | $ | 104,994 | $ | — | ||||||||
Short-term investments: | ||||||||||||||||
Short-term bond funds | $ | 10,041 | $ | 10,041 | $ | — | $ | — | ||||||||
k. | OPERATING LEASES. right-of-use non-lease components, which are accounted for separately. |
l. | SHARE REPURCHASES. |
m. | REVENUE RECOGNITION. |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
n. | RESEARCH AND DEVELOPMENT. |
o. | STOCK-BASED COMPENSATION. |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
p. | CONCENTRATION OF RISK. |
q. | ROYALTIES. |
r. | INCOMETAXES. |
s. | COMPREHENSIVE INCOME. available-for-sale |
t. | NET INCOME PER COMMON SHARE. |
2. | Basis of Presentation and Significant Accounting Policies (continued). |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Basic weighted average common shares outstanding | 103,407,803 | 103,414,523 | 103,610,138 | 103,410,881 | ||||||||||||
Effect of dilutive securities | 4,327,121 | 3,315,900 | 3,689,124 | 3,022,981 | ||||||||||||
Diluted weighted average common shares outstanding | 107,734,924 | 106,730,423 | 107,299,262 | 106,433,862 | ||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Basic weighted average common shares outstanding | 103,196,550 | 103,535,431 | 103,470,762 | 103,452,025 | ||||||||||||
Effect of dilutive securities | 4,646,646 | 2,780,810 | 4,005,413 | 2,934,592 | ||||||||||||
Diluted weighted average common shares outstanding | 107,843,196 | 106,316,241 | 107,476,175 | 106,386,617 | ||||||||||||
u. | RECLASSIFICATIONS. |
v. | RECENTLY ISSUED ACCOUNTING STANDARDS. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes step-up in the tax basis of goodwill. The standard was effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted. Adoption of the standard required certain changes to be made prospectively, with some changes to be made retrospectively. The Company adopted the new standard on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. |
3. | Investments. |
Estimated Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Amortized Cost | Estimated Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Amortized Cost | |||||||||||||||||||||||||
At June 30, 2021: | �� | |||||||||||||||||||||||||||||||
At September 30, 2021: | ||||||||||||||||||||||||||||||||
U.S. Treasuries – Cash equivalents | $ | 49,996 | $ | 0 | $ | (1 | ) | $ | 49,997 | $ | 104,995 | $ | 0 | $ | — | $ | 104,995 | |||||||||||||||
Short-term bond funds | 19,980 | — | (36 | ) | 20,016 | 19,956 | — | (63 | ) | 20,019 | ||||||||||||||||||||||
Total | $ | 69,976 | $ | 0 | $ | (37 | ) | $ | 70,013 | $ | 124,951 | $ | 0 | $ | (63 | ) | $ | 125,014 | ||||||||||||||
At December 31, 2020: | ||||||||||||||||||||||||||||||||
U.S. Treasuries – Cash equivalents | $ | 104,994 | $ | 2 | $ | — | $ | 104,992 | $ | 104,994 | $ | 2 | $ | — | $ | 104,992 | ||||||||||||||||
Short-term bond funds | 10,041 | 29 | — | 10,012 | 10,041 | 29 | — | 10,012 | ||||||||||||||||||||||||
Total | $ | 115,035 | $ | 31 | $ | — | $ | 115,004 | $ | 115,035 | $ | 31 | $ | — | $ | 115,004 | ||||||||||||||||
3. | Investments (continued). |
June 30, 2021 | ||||
Due in one year or less | $ | 69,976 |
September 30, 2021 | ||||
Due in one year or less | $ | 124,951 |
4. | Inventory, net. |
June 30, 2021 | December 31, 2020 | |||||||
Raw materials | $ | 1,117 | $ | — | ||||
Work-in-process | 5,168 | 3,555 | ||||||
Finished goods | 812 | 1,096 | ||||||
Total inventory, net | $ | 7,097 | $ | 4,651 | ||||
September 30, 2021 | December 31, 2020 | |||||||
Raw materials | $ | 1,112 | $ | — | ||||
Work-in-process | 4,847 | 3,555 | ||||||
Finished goods | 991 | 1,096 | ||||||
Total inventory, net | $ | 6,950 | $ | 4,651 | ||||
5. | Prepaid Expenses andOther Current Assets. |
June 30, 2021 | December 31, 2020 | |||||||
Prepaid manufacturing costs | $ | 2,646 | $ | 3,328 | ||||
Prepaid tax | 93 | 1,368 | ||||||
Prepaid insurance | 623 | 1,285 | ||||||
Prepaid subscription fees | 530 | 729 | ||||||
Prepaid research fees | 391 | 453 | ||||||
Prepaid commercialization expenses | 120 | 199 | ||||||
Due from collaborative and licensing arrangements | 2,917 | 437 | ||||||
Other | 321 | 529 | ||||||
Total prepaid expenses and other current assets | $ | 7,641 | $ | 8,328 | ||||
September 30, 2021 | December 31, 2020 | |||||||
Prepaid manufacturing costs | $ | 2,233 | $ | 3,328 | ||||
Prepaid tax | 13 | 1,368 | ||||||
Prepaid insurance | 231 | 1,285 | ||||||
Prepaid subscription fees | 689 | 729 | ||||||
Prepaid research fees | 523 | 453 | ||||||
Prepaid commercialization expenses | 90 | 199 | ||||||
Due from collaborative and licensing arrangements | 197 | 437 | ||||||
Prepaid conference and travel expenses | 224 | 83 | ||||||
Other | 228 | 446 | ||||||
Total prepaid expenses and other current assets | $ | 4,428 | $ | 8,328 | ||||
6. | Operating Lease. |
For the three months ended June 30, 2021 | For the six months ended June 30, 2021 | |||||||
Operating lease cost | $ | 108 | $ | 164 |
June 30, 2021 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows | $ | 29 | ||
Right-of-use | ||||
Operating leases | $ | 36 |
Operating lease right-of-use | $ | 3,201 | ||
Other current liabilities | $ | 200 | ||
Operating lease liabilities, net of current portion | 4,051 | |||
Total operating lease liabilities | $ | 4,251 | ||
Remaining lease term | 9.8 years | |||
Discount rate | 4.51 | % |
6. | Operating Lease (continued). |
For the three months ended September 30, 2021 | For the nine months ended September 30, 2021 | |||||||
Operating lease cost | $ | 108 | $ | 272 |
September 30, 2021 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows | $ | 29 | ||
Right-of-use | ||||
Operating leases | $ | 58 |
Operating lease right-of-use | $ | 3,093 | ||
Other current liabilities | $ | 278 | ||
Operating lease liabilities, net of current portion | 3,973 | |||
Total operating lease liabilities | $ | 4,251 | ||
Remaining lease term | 9.6 years | |||
Discount rate | 4.51 | % |
2021 (remaining six months) | $ | 80 | ||||||
2021 (remaining three months) | $ | 80 | ||||||
2022 | 492 | 492 | ||||||
2023 | 506 | 506 | ||||||
2024 | 522 | 522 | ||||||
2025 | 537 | 537 | ||||||
Thereafter | 3,150 | 3,150 | ||||||
Total lease payments | 5,287 | 5,287 | ||||||
Less imputed interest | (1,036 | ) | ||||||
Less: imputed interest | (1,036 | ) | ||||||
Total | $ | 4,251 | $ | 4,251 | ||||
7. | Property and Equipment, net. |
June 30, 2021 | December 31, 2020 | |||||||
Computer equipment | $ | 51 | $ | 51 | ||||
Furniture and equipment | 135 | 242 | ||||||
Leasehold improvements | 939 | 177 | ||||||
Less: Accumulated depreciation | (211 | ) | (340 | ) | ||||
Total property and equipment, net | $ | $ | 130 | |||||
September 30, 2021 | December 31, 2020 | |||||||
Computer equipment | $ | 51 | $ | 51 | ||||
Furniture and equipment | 203 | 242 | ||||||
Leasehold improvements | 939 | 177 | ||||||
Less: Accumulated depreciation | (242 | ) | (340 | ) | ||||
Total property and equipment, net | $ | 951 | $ | 130 | ||||
8. | Accrued Expenses and Other Liabilities. |
September 30, 2021 | December 31, 2020 | |||||||
Accrued preclinical and clinical trial expenses | $ | 487 | $ | 585 | ||||
Accrued professional fees | 1,978 | 1,884 | ||||||
Accrued compensation and benefits | 2,647 | 3,991 | ||||||
Accrued license fees | 9,105 | 10,373 | ||||||
Accrued purchases | 1,483 | 258 | ||||||
Accrued contributions | — | 310 | ||||||
Operating lease liability | 278 | 29 | ||||||
Accrued variable consideration | 1,439 | 964 | ||||||
Accrued income tax | 335 | — | ||||||
Other | 110 | 106 | ||||||
Current accrued expenses and other liabilities | 17,862 | 18,500 | ||||||
Lease liability—non-current | 3,973 | — | ||||||
Non-current accrued expenses and other liabilities | 3,973 | — | ||||||
Total accrued expenses and other liabilities | $ | 21,835 | $ | 18,500 | ||||
June 30, 2021 | December 31, 2020 | |||||||
Accrued preclinical and clinical trial expenses | $ | 530 | $ | 585 | ||||
Accrued professional fees | 1,229 | 1,884 | ||||||
Accrued compensation and benefits | 2,014 | 3,991 | ||||||
Accrued license fees | 6,382 | 10,373 | ||||||
Accrued purchases | 1,343 | 258 | ||||||
Accrued contributions | — | 310 | ||||||
Operating lease liability | 200 | 29 | ||||||
Accrued variable consideration | 1,331 | 964 | ||||||
Accrued income tax | 70 | — | ||||||
Other | 112 | 106 | ||||||
Current accrued expenses and other liabilities | 13,211 | 18,500 | ||||||
Lease liability—non-current | 4,051 | — | ||||||
Non-current accrued expenses and other liabilities | 4,051 | — | ||||||
Total accrued expenses and other liabilities | $ | 17,262 | $ | 18,500 | ||||
9. | Collaborationand Licensing Arrangements. |
9. | Collaboration and Licensing Arrangements (continued). |
9. | Collaboration and Licensing Arrangements (continued). |
10. | Commitments and Contingencies. |
11. | Agreements. |
a. | LICENSE AGREEMENT FOR FIRDAPSE ® .On ® . Under the license agreement, the Company pays: (i) royalties to the licensor for seven years from the first commercial sale of Firdapse® equal to 7% of net sales (as defined in the license agreement) in North America for any calendar year for sales up to $100 million, and 10% of net sales in North America in any calendar year in excess of $100 million; and (ii) royalties to the third-party licensor of the rights sublicensed to the Company for seven years from the first commercial sale of Firdapse® equal to 7% of net sales (as defined in the license agreement between BioMarin and the third-party licensor) in any calendar year for the duration of any regulatory exclusivity within a territory and 3.5% for territories in any calendar year in territories without regulatory exclusivity. |
b. | AGREEMENTS FOR DRUG MANUFACTURING, DEVELOPMENT, PRECLINICAL AND CLINICAL STUDIES. |
12. | Income Taxes. |
13. | Stockholders’ Equity. |
13. | Stockholders’ Equity (continued). |
14. | Stock Compensation. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Research and development | $ | 376 | $ | 421 | $ | 765 | $ | 839 | ||||||||
Selling, general and administrative | 1,142 | 1,373 | 2,324 | 2,475 | ||||||||||||
Total stock-based compensation | $ | 1,518 | $ | 1,794 | $ | 3,089 | $ | 3,314 | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Research and development | $ | 428 | $ | 399 | $ | 1,193 | $ | 1,239 | ||||||||
Selling, general and administrative | 1,084 | 1,079 | 3,408 | 3,553 | ||||||||||||
Total stock-based compensation | $ | 1,512 | $ | 1,478 | $ | 4,601 | $ | 4,792 | ||||||||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three months ended June 30, | Change | Three months ended September 30, | Change | |||||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||||
Research and development expenses | $ | 4,074 | $ | 3,929 | 145 | 3.7 | % | $ | 4,059 | $ | 3,350 | 709 | 21.2 | % | ||||||||||||||||||
Employee stock-based compensation | 376 | 421 | (45 | ) | (10.7 | )% | 428 | 399 | 29 | 7.3 | % | |||||||||||||||||||||
Total research and development expenses | $ | 4,450 | $ | 4,350 | 100 | 2.3 | % | $ | 4,487 | $ | 3,749 | 738 | 19.7 | % | ||||||||||||||||||
Six months ended June 30, | Change | Nine months ended September 30, | Change | |||||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||||
Research and development expenses | $ | 6,692 | $ | 7,734 | (1,042 | ) | (13.5 | )% | $ | 10,751 | $ | 11,083 | (332 | ) | (3.0 | )% | ||||||||||||||||
Employee stock-based compensation | 765 | 839 | (74 | ) | (8.8 | )% | 1,193 | 1,239 | (46 | ) | (3.7 | )% | ||||||||||||||||||||
Total research and development expenses | $ | 7,457 | $ | 8,573 | (1,116 | ) | (13.0 | )% | $ | 11,944 | $ | 12,322 | (378 | ) | (3.1 | )% | ||||||||||||||||
Three months ended June 30, | Change | Three months ended September 30, | Change | |||||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||||
Selling | $ | 5,981 | $ | 5,622 | 359 | 6.4 | % | $ | 6,521 | $ | 5,578 | 943 | 16.9 | % | ||||||||||||||||||
General and administrative | 4,409 | 3,838 | 571 | 14.9 | % | 4,548 | 3,328 | 1,220 | 36.7 | % | ||||||||||||||||||||||
Employee stock-based compensation | 1,142 | 1,373 | (231 | ) | (16.8 | )% | 1,084 | 1,079 | 5 | 0.5 | % | |||||||||||||||||||||
Total selling, general and administrative expenses | $ | 11,532 | $ | 10,833 | 699 | 6.5 | % | $ | 12,153 | $ | 9,985 | 2,168 | 21.7 | % | ||||||||||||||||||
Six months ended June 30, | Change | Nine months ended September 30, | Change | |||||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||||
Selling | $ | 11,657 | $ | 11,425 | 232 | 2.0 | % | $ | 18,177 | $ | 17,004 | 1,173 | 6.9 | % | ||||||||||||||||||
General and administrative | 10,267 | 6,996 | 3,271 | 46.8 | % | 14,816 | 10,324 | 4,492 | 43.5 | % | ||||||||||||||||||||||
Employee stock-based compensation | 2,324 | 2,475 | (151 | ) | (6.1 | )% | 3,408 | 3,553 | (145 | ) | (4.1 | )% | ||||||||||||||||||||
Total selling, general and administrative expenses | $ | 24,248 | $ | 20,896 | 3,352 | 16.0 | % | $ | 36,401 | $ | 30,881 | 5,520 | 17.9 | % | ||||||||||||||||||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
a. | We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of |
b. | During the three months ended |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Dollar Value of Shares that May Yet Be Purchased (in thousands) | ||||||||||||
April 1, 2021 – April 30, 2021 | 432,951 | $ | 4.53 | 432,951 | $ | 37,748 | ||||||||||
May 1, 2021 – May 31, 2021 | 9,260 | $ | 4.62 | 9,260 | $ | 37,705 | ||||||||||
June 1, 2021 – June 30, 2021 | 290,740 | $ | 5.73 | 290,740 | $ | 36,040 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Dollar Value of Shares that May Yet Be Purchased (in thousands) | ||||||||||||
July 1, 2021 – July 31, 2021 | 199,746 | $ | 5.48 | 199,746 | $ | 34,946 | ||||||||||
August 1, 2021 – August 31, 2021 | 197,287 | $ | 5.47 | 197,287 | $ | 33,867 | ||||||||||
September 1, 2021 – September 30, 2021 | 552,713 | $ | 5.21 | 552,713 | $ | 30,987 |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURE |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
31.1 | Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of Principal Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Certification of Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Catalyst Pharmaceuticals, Inc. | ||
By: | /s/ Alicia Grande | |
Alicia Grande | ||
Vice President, Treasurer and Chief Financial Officer |