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2016-11-14

RedHill Biopharma Reports 2016 Third Quarter Financial Results

16 Third Quarter Financial Results

-- RedHill maintains a debt-free balance sheet with $40.5 million in cash at
the end of the third quarter, allowing the Company to continue to
diligently execute its three ongoing Phase III gastrointestinal disease
programs and other clinical-stage programs
-- Recent key milestones include:
-- Enhancement of the RHB-104 Phase III Crohn’s disease program, including
the introduction of an option for early stop for success for
overwhelming efficacy, expected in Q2/2017
-- Initiation of Phase II studies with YELIVA™ for multiple myeloma and
hepatocellular carcinoma
-- Signing of an exclusive license agreement with Grupo JUSTE for the
commercialization in Spain of RIZAPORT® oral thin-film migraine drug and
filing of a national Marketing Authorization Application in Spain by
Grupo JUSTE
-- Signing of a binding term sheet with Pharmatronic Co. for the
commercialization of RIZAPORT® in South Korea
-- Potential milestones expected in the coming year include:
-- Q4/2016 - Safety-focused independent data and safety monitoring board
(DSMB) meeting for the MAP US Phase III study with RHB-104 for Crohn’s
disease
-- Q4/2016 - Top-line final results from the ongoing Phase IIa CEASE-MS
study with RHB-104 for multiple sclerosis
-- Q2/2017 - Independent DSMB evaluation of the MAP US Phase III study with
RHB-104 for Crohn’s disease, including option for early stop for success
for overwhelming efficacy
-- H1/2017 - Initiation of a confirmatory Phase III study with RHB-105 for
the treatment of H. pyloriinfection
-- Mid-2017 - Top-line results from the ongoing Phase III study with
BEKINDA® for gastroenteritis and gastritis in the U.S. (the GUARD study)
-- Mid-2017 - Top-line results from the ongoing Phase II study with
BEKINDA® for diarrhea-predominant irritable bowel syndrome (IBS-D) in
the U.S.
-- H1/ 2017 - Re-submission of the RIZAPORT® U.S. NDA to the FDA

TEL-AVIV, Israel, Nov. 14, 2016 (GLOBE NEWSWIRE) -- RedHill Biopharma Ltd.
(NASDAQ:RDHL) (TASE:RDHL) (“RedHill” or the “Company”), a biopharmaceutical
company primarily focused on development and commercialization of late
clinical-stage, proprietary, orally-administered, small molecule drugs for
gastrointestinal and inflammatory diseases and cancer, today reported its
financial results for the quarter ended September 30, 2016.

The Company will host a conference call on Monday, November 14, 2016, at 9:00
am EST to review the financial results and business highlights, dial-in details
are included below.

Financial highlights for the quarter ended September 30, 20161

Research and Development Expenses for the third quarter of 2016 were $7.0
million, an increase of $3.1 million, compared to $3.9 million in the third
quarter of 2015 and an increase of $1.0 million, compared to $6.0 million in
the second quarter of 2016. Research and Development Expenses for the nine
months ended September 30, 2016 were $17.7 million, an increase of $4.9
million, compared to $12.8 million in the comparable period of 2015. The
increase in 2016 resulted primarily from the ongoing Phase III MAP US study
with RHB-104 (Crohn's disease), the ongoing Phase II and Phase III studies with
BEKINDA® (IBS-D and gastroenteritis, respectively) and from preparations for
several Phase I/II studies with YELIVA™ for multiple indications.

General, Administrative and Business Development Expenses in the third quarter
of 2016 were $1.4 million, an increase of $0.7 million, compared to $0.7
million in the third quarter of 2015 and an increase of $0.2 million, compared
to $1.2 million in the second quarter of 2016. General, Administrative and
Business Development Expenses for the nine months ended September 30, 2016 were
$3.8 million, an increase of $1.4 million, compared to $2.4 million in the
comparable period of 2015. The increase was mainly due to enhanced business
development and investor relations activities.

Operating Loss in the third quarter of 2016 was $8.5 million, an increase of
$3.9 million, compared to $4.6 million in the third quarter of 2015 and an
increase of $1.3 million, compared to $7.2 million in the second quarter of
2016. Operating Loss for the nine months ended September 30, 2016 were $21.6
million, an increase of $6.4 million, compared to $15.2 million in the
comparable period of 2015. The increase was mainly due to increases in Research
and Development Expenses, as detailed above.

Net Cash Used in Operating Activities in the third quarter of 2016 was $7.4
million, an increase of $3.7 million, compared to $3.7 million in the third
quarter of 2015 and an increase of $1.7 million, compared to $5.7 million in
the second quarter of 2016. Net Cash Used in Operating Activities for the nine
months ended September 30, 2016 was $18.1 million, an increase of $6.3 million,
compared to $11.8 million in the comparable period of 2015. The increase mainly
reflects the increase in Operating Loss, as detailed above.

Net Cash Used in Investment Activities in the third quarter of 2016 was $10.7
million, compared to Net Cash Used in Investment Activities of $2.4 million in
the third quarter of 2015. Net Cash Used in Investment Activities for the nine
months ended September 30, 2016 was $3.2 million, an increase of $4.3 million,
compared to Net Cash Provided by Investment Activities of $1.1 million in the
comparable period of 2015. The increase in Net Cash Used in Investment
Activities was due to an increase in bank deposits and marketable securities in
2016.

Cash Balance2 as of September 30, 2016 was $40.5 million, a decrease of $17.6
million, compared to $58.1 million as of December 31, 2015. The decrease was a
result of the ongoing operations, mainly related to research and development
activities.

“We are very pleased with the important operational milestones achieved during
this quarter, including the significant enhancements to the RHB-104 Phase III
development program for Crohn’s disease and the initiation of several clinical
studies with our novel Phase II oncology drug YELIVA™” said Mr. Micha Ben
Chorin, RedHill’s CFO. “We maintained a debt-free balance sheet and a cash
position of $40.5 million at the end of the third quarter of 2016 as we
continue to advance several Phase III and Phase II gastrointestinal programs
toward important data points in the coming months. We also continue to advance
our strategic plan to build a U.S. specialty GI pharmaceutical company.”

Conference Call and Webcast Information:

The Company will host a conference call on Monday, November 14, 2016, at 9:00
am EST to review the financial results and business highlights.

To participate in the conference call, please dial the following numbers 5-10
minutes prior to the start of the call: United States: +1-877-280-2342;
International: +1-646-254-3367; and Israel: +972-3-721-9510. The access code
for the call is 2341628.

The conference call will be broadcasted live and available for replay on the
Company's website, http://ir.redhillbio.com/events.cfm, for 30 days. Please
access the Company's website at least 15 minutes ahead of the conference to
register, download, and install any necessary audio software.

Recent operational highlights:

1. On July 5, 2016, RedHill and its co-development partner, IntelGenx Corp.
(IntelGenx), announced the signing of an exclusive license agreement with
Grupo JUSTE S.A.Q.F (Grupo JUSTE), for the commercialization of RIZAPORT®
oral thin-film for acute migraines. Under the terms of the agreement,
RedHill granted Grupo JUSTE the exclusive rights to register and
commercialize RIZAPORT® in Spain and a right of first refusal for a
predefined term for additional territories. RedHill and IntelGenx received
an upfront payment and are entitled to receive additional milestone
payments upon the achievement of certain predefined regulatory and
commercial targets, as well as tiered royalties. Further financial terms of
the agreement were not disclosed. Grupo JUSTE recently filed a national
Marketing Authorization Application for RIZAPORT® in Spain and commercial
launch in Spain is expected to take place in the second half of 2017.
2. On July 13, 2016, RedHill announced the signing of a research collaboration
agreement with the U.S. National Institute of Allergy and Infectious
Diseases (NIAID), part of the National Institutes of Health (NIH), intended
to evaluate RedHill’s proprietary experimental therapy for the treatment of
Ebola virus disease. The new research collaboration follows encouraging
results from preliminary non-clinical studies conducted in conjunction with
the NIAID using RedHill’s proprietary experimental therapy. If successful,
this study is intended to provide supportive data for discussions with the
FDA for potential use of the Animal Rule pathway for approval. Ebola virus
disease is a severe and often fatal illness, which can cause severe
hemorrhagic fever in humans and has a mortality rate ranging from 25% to
90%3. There is currently no FDA-approved treatment for Ebola virus disease.
3. On July 21, 2016, RedHill announced that it had received a Notice of
Allowance from the United States Patent and Trademark Office (USPTO) for a
new patent covering RHB-105. The patent application, entitled
“Pharmaceutical Compositions For The Treatment Of Helicobacter
Pylori”expands RedHill’s patent portfolio covering RHB-105 and is expected
to be valid until 2034, once granted.
4. On August 1, 2016, RedHill announced that the last patient completed the
final scheduled follow-up visit in the Phase IIa proof-of-concept clinical
study evaluating RHB-104 in patients treated for relapsing-remitting
multiple sclerosis (the CEASE-MS study). The analysis of the study is
ongoing, with top-line final results expected in Q4/2016. Previously
announced interim results after completion of the 24-week RHB-104 treatment
period of the study demonstrated positive safety and efficacy signals and
support further clinical development.
5. On August 29, 2016, RedHill announced that it had received from the
European Patent Office a Notice of Intention to Grant for a new patent
covering the use of RHB-104 in the treatment of multiple sclerosis. Upon
grant by the European Patent Office, the patent is expected to be valid
until 2032 and can be officially validated in up to 38 European countries.
6. On September 8, 2016, RedHill announced that a Phase Ib/II clinical study
evaluating YELIVA™ in patients with refractory or relapsed multiple myeloma
was initiated. The open-label, dose escal...

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