Amryt Pharma PLC Preliminary Results and Q1 Trading Update (4139W)

TIDMAMYT

RNS Number : 4139W

Amryt Pharma PLC

17 April 2019

17 April 2019

AIM: AMYT

Euronext Growth: AYP

Amryt Pharma plc

("Amryt" or the "Company")

PRELIMINARY FY 2018 RESULTS AND

Q1 2019 TRADING UPDATE

EASE study in EB making good progress; recent Lojuxta successes result in strong Q1 2019 growth with first orders received from France; early access program in EB initiated in Colombia

Amryt, a revenue-generating orphan drug company focused on acquiring, developing and commercialising products that help improve the lives of patients where there is a high unmet medical need, today announces its preliminary unaudited results for the year ended 31 December 2018. It also provides a trading update for Q1 2019. The 2018 Annual Report will be published in May 2019.

Revenues for 2018 amounted to EUR14.5m which represented a 13.3% increase on 2017 and this positive revenue momentum has continued into Q1 2019 with Lojuxta revenues growing by 28.1% compared to Q1 2018. This growth has been driven by the recent reimbursement decisions in the UK and France, with initial orders received from UK patients in Q4 2018 and from French patients in Q1 2019. Revenue growth has been further strengthened by a 118% increase in quarterly revenues from Saudi Arabia from Q4 2018 to Q1 2019.

The Company's lead development asset, AP101, continues to progress, having recently successfully completed an unblinded interim efficacy analysis by an Independent Data Monitoring Committee ("IDMC") of the Phase 3 EASE study in Epidermolysis Bullosa ("EB"). The Committee recommended that the trial continue with a modest increase in the number of patients in the study, to 230 evaluable patients, to maintain 80% statistical power. The IDMC has also recently expanded the eligible patient population to include infants and children with EB between the ages of 21 days to 4 years of age. The Company is also pleased to announce the commencement of its AP101 early access program for patients with EB in Colombia who are not eligible for the EASE study with the first shipments of product in late Q4 2018.

2018 Financial Highlights:

   --     Revenue growth of 13.3% to EUR14.5m (2017: EUR12.8m) 

-- Revenues from Lojuxta (lomitapide), which treats HoFH, a rare, genetic, life-threatening disorder that causes abnormally high levels of "bad" cholesterol, increased to EUR13.6m, which represents a growth rate of 14.2% year-on-year

   --     Gross profit margin increased to 63% (2017: 58%) 
   --     Cash balance at 31 December 2018 of EUR9.8m (2017: EUR20.5m) 
   --     Post period-end : additional EUR5m drawn down from the EIB debt facility in Q1 2019 

2018 Operational Highlights:

Lead Commercial Asset - Lojuxta

   --     Eight new distribution agreements signed in 2018, now covering 23 countries in total 

-- Reimbursement approval received in the UK and France resulting in first orders for the UK in late 2018

   --     Initial orders received for patients in Saudi Arabia in Q4 

-- Continued expansion in the licenced territories for Lojuxta, including Russia, the Commonwealth of Independent States ("CIS"), and the non-EU Balkan states

Lead Development Asset - AP101

-- Significant continued progress made in the development of AP101, a potential treatment for EB, a rare life limiting genetic skin condition

-- An Investigational New Drug ("IND") approval, recently obtained from the FDA, permits the Group to open clinical trial sites in the US, which is expected to help enrolment into the EASE Phase3 study in EB

-- A Paediatric Rare Disease designation was granted by the U.S. Food and Drug Administration ("FDA") which means if a New Drug Application ("NDA") for AP101 is approved, Amryt will be eligible to receive a priority review voucher that can be used, sold or transferred. Publicly disclosed sale prices for such vouchers have ranged from US$67.5m to US$350m

-- Early access programme in EB initiated in Colombia with first AP101 shipments in response to unsolicited requests for named patient access in Q4 2018

Gene Therapy Platform -AP103

-- Exclusive in-licence agreement signed in March 2018 with University College Dublin ('UCD') for a novel non-viral gene therapy platform technology, which offers a potential treatment for patients with both EB and beyond

-- Preliminary data suggests that the treatment could be disease-modifying for patients with Recessive Dystrophic Epidermolysis Bullosa ("RDEB"), a major subset of EB

-- Significant grant funding totalling EUR8.4m awarded by the Irish Government to develop the AP103 gene therapy platform over the next three years

Post Period-End - Q1 2019 Highlights

Lead Commercial Asset - Lojuxta

-- Lojuxta unaudited revenues for Q1 2019 of EUR3.9m, which represents an increase of 28.1% on the same period in 2018, continuing the momentum generated in 2018

-- Significant expansion in patient numbers in the UK in Q1 2019 following the launch in this new market in Q4 2018

   --     First patient order received from France in Q1 2019 
   --     Sales to Saudi Arabia in Q1 2019 increased by 118% compared to Q4 2018 

Lead Development Asset - AP101

-- Following an assessment of the results of an unblinded interim efficacy analysis of its pivotal Phase 3 EASE trial for AP101 as a potential treatment for EB, the IDMC recommended that the trial should continue with an increase of 48 patients in the study to a total of 230 evaluable patients, in order to maintain 80% statistical power

-- Following an assessment in February by the EASE trial's IDMC of pharmacokinetic ("PK") data received from patients already enrolled in the trial (aged four years and older), Amryt can now enrol infants and children with EB between the ages of 21 days to 4 years of age into the trial

-- The EASE study is progressing well and it is expected that the final patient will be enrolled in H2 2019

Gene Therapy Platform - AP103

-- Two pre-clinical studies showed that topical application of AP103 restored production of collagen VII in pre-clinical models of EB to levels exceeding those produced by healthy human keratinocytes and to levels similar to those observed following delivery with a viral vector

   --     In addition, AP103 exhibited no evidence of cellular toxicity after repeated administration 

Dr Joe Wiley, CEO of Amryt Pharma, commented: "2018 was another strong year for Amryt as we continued to expand our business and make progress towards our goal of becoming a global leader in rare and orphan diseases. We continued to grow Lojuxta sales and we believe that we now have in place the commercial platform and critical infrastructure to make this a significant business and cash generator for Amryt in the future. During the year, we expanded our Lojuxta licenced territories to 23 countries, and importantly we were granted approval for funding both as an NHS treatment in England, and for patients in France. We also received our first prescriptions for patients in Saudi Arabia in Q4. These very significant achievements are already having a significant positive impact on our financial & operational performance in 2019. Lojuxta revenues for Q1 2019 are already 28.1% higher than the same period in 2018, and we are now able to reach more people living with the ultra-rare and life-threatening condition HoFH than ever before. Amryt will continue to actively review further growth opportunities that could expand the Group's commercial product portfolio.

"Our lead development asset, AP101, achieved a significant milestone with the completion of an unblinded interim efficacy analysis of our EASE Phase 3 trial. This resulted in the IDMC recommendation that we continue with the trial with only a modest increase in patient numbers. We are now expanding EASE recruitment with the opening of a number of new trial sites in the US. The IDMC has also allowed us to open our study to children with EB between the ages of 21 days to four years of age.

"In addition, we continued our strategy to acquire new products with the in-licencing of AP103 in 2018. We are excited by the potential for this novel gene therapy in EB and beyond. We continue to evaluate new opportunities and expect to further deliver on our strategy to acquire, develop and commercialise orphan drugs as we move through 2019. We expect that this continued progress will bring us closer to realising our vision of becoming a global leader in rare and orphan diseases."

Enquiries:

 
 Amryt Pharma plc                       [phone] 
 Joe Wiley, CEO 
  Rory Nealon, CFO/COO 
 
   Shore Capital                        [phone] 
 NOMAD and Joint Broker 
 Edward Mansfield, Mark Percy, 
  Daniel Bush 
 Stifel                                 [phone] 
 Joint Broker 
 Jonathan Senior, Ben Maddison 
 
   Davy                                 [phone] 
 ESM Adviser and Joint Broker 
 John Frain, Anthony Farrell 
 Consilium Strategic Communications     [phone] 
 Matthew Neal, David Daley, Nicholas 
  Brown 
 

About Amryt

Amryt is a biopharmaceutical company focused on developing and delivering innovative new treatments to help improve the lives of patients with rare or orphan diseases.

Lojuxta is an approved treatment for adult patients with the rare cholesterol disorder - Homozygous Familial Hypercholesterolaemia ("HoFH"). This disorder impairs the body's ability to remove low density lipoprotein ("LDL") cholesterol ("bad" cholesterol) from the blood, typically leading to abnormally high blood LDL cholesterol levels in the body from before birth - often ten times more than people without HoFH - and subsequent aggressive and premature narrowing and blocking of blood vessels, heart attacks and strokes, even at a very young age if not properly diagnosed or receiving adequate treatment. Lojuxta is indicated as an adjunct to a low-fat diet and other lipid-lowering medicinal products with or without LDL apheresis in adult patients with HoFH.

Amryt is the marketing authorisation holder and has an exclusive licence to sell Lojuxta (lomitapide) across the European Economic Area, Middle East and North Africa, Switzerland, Turkey, Israel, Russia, the Commonwealth of Independent States and the non-EU Balkan states.

Amryt's lead drug candidate, AP101, is a potential treatment for Epidermolysis Bullosa ("EB"), a rare and distressing genetic skin disorder affecting young children and adults for which there is currently no treatment. It is currently in Phase 3 clinical trials. The European and US market opportunity for EB is estimated to be in excess of EUR1 billion.

In March 2018, Amryt in-licenced a pre-clinical gene-therapy platform technology, AP103, which offers a potential treatment for patients with Recessive Dystrophic Epidermolysis Bullosa, a subset of EB, and is also potentially relevant to other genetic disorders.

For more information on Amryt, please visit amrytpharma.com.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014

Unaudited Consolidated Statement of Comprehensive Income

For the year ended 31 December 2018

 
                                                   Unaudited          Audited 
                                                 31 December      31 December 
                                                        2018             2017 
---------------------------------------------  -------------  --------------- 
                                                     EUR'000        EUR'000 
---------------------------------------------  -------------  ------------- 
 Revenue                                              14,454         12,778 
 Cost of sales                                       (5,298)        (5,373) 
---------------------------------------------  -------------  ------------- 
 Gross profit                                          9,156          7,405 
---------------------------------------------  -------------  ------------- 
 Administrative, selling and marketing 
  expenses                                          (14,663)       (10,483) 
 Share based payment expenses                          (694)          (565) 
---------------------------------------------  -------------  ------------- 
 Total administrative, selling and marketing 
  expenses                                          (15,357)       (11,048) 
 Research and development expenses                   (9,049)       (10,564) 
---------------------------------------------  -------------  ------------- 
 Operating loss before finance expense              (15,250)       (14,207) 
---------------------------------------------  -------------  ------------- 
 Non-cash change in fair value of contingent 
  consideration                                      (8,934)       (11,104) 
 Finance expense                                     (1,557)          (825) 
---------------------------------------------  -------------  ------------- 
 Loss on ordinary activities before 
  taxation                                          (25,741)       (26,136) 
---------------------------------------------  -------------  ------------- 
 Tax on loss on ordinary activities                     (36)              - 
---------------------------------------------  -------------  ------------- 
 Loss for the year attributable to the 
  equity holders of the Company                     (25,777)       (26,136) 
---------------------------------------------  -------------  ------------- 
 
 Exchange translation differences which 
  may be reclassified through the profit 
  or loss                                               (12)             22 
---------------------------------------------  -------------  ------------- 
 Total other comprehensive (loss)/ profit               (12)             22 
---------------------------------------------  -------------  ------------- 
 Total comprehensive loss for the year 
  attributable to the equity holders 
  of the Company                                    (25,789)       (26,114) 
---------------------------------------------  -------------  ------------- 
 
   Loss per share: 
 Loss per share - basic and diluted, 
  attributable to ordinary equity holders 
  of the parent (cent)                                (9.38)        (11.72) 
 

Unaudited Consolidated Statement of Financial Position

As at 31 December 2018

 
                                            Unaudited        Audited 
                                          31 December    31 December 
                                                 2018           2017 
--------------------------------------  -------------  ------------- 
                                              EUR'000        EUR'000 
--------------------------------------  -------------  ------------- 
 Assets 
 Non-current assets 
 Intangible assets                             52,695         52,606 
 Property, plant and equipment                    960          1,160 
 Other non-current assets                         130              - 
 Total non-current assets                      53,785         53,766 
--------------------------------------  -------------  ------------- 
 Current assets 
 Trade and other receivables                    5,179          4,729 
 Inventories                                    1,868          1,083 
 Cash and cash equivalents                      9,811         20,512 
 Total current assets                          16,858         26,324 
--------------------------------------  -------------  ------------- 
 
 Total assets                                  70,643         80,090 
--------------------------------------  -------------  ------------- 
 
 Equity and liabilities 
 Equity attributable to owners of the 
  parent 
 Share capital                                 21,173         21,173 
 Share premium                                 57,334         57,334 
 Other reserves                              (20,858)       (21,512) 
 Accumulated deficit                         (60,880)       (35,109) 
--------------------------------------  -------------  ------------- 
 Total equity                                 (3,231)         21,886 
--------------------------------------  -------------  ------------- 
 
 Non-current liabilities 
 Contingent consideration                      41,351         32,418 
 Deferred tax liability                         5,384          5,384 
 Long term loan                                16,614         10,603 
 Total non-current liabilities                 63,349         48,405 
 
 Current liabilities 
 Trade and other payables                      10,525          9,799 
--------------------------------------  -------------  ------------- 
 Total current liabilities                     10,525          9,799 
--------------------------------------  -------------  ------------- 
 Total liabilities                             73,874         58,204 
--------------------------------------  -------------  ------------- 
 
 Total equity and liabilities                  70,643         80,090 
--------------------------------------  -------------  ------------- 
 

Unaudited Consolidated Statement of Cash Flows

For the year ended 31 December 2018

 
                                                    Unaudited        Audited 
                                                  31 December    31 December 
                                                         2018           2017 
---------------------------------------------  --------------  ------------- 
                                                      EUR'000        EUR'000 
---------------------------------------------  --------------  ------------- 
 Cash flows from operating activities 
 Loss on ordinary activities after taxation          (25,777)       (26,136) 
 Finance expense                                        1,557            825 
 Depreciation and amortisation                            310            259 
 Share based payment expenses                             694            565 
 Non-cash change in fair value of contingent 
  consideration                                         8,934         11,104 
 Movements in working capital and other 
  adjustments: 
    Change in trade and other receivables               (450)        (2,189) 
    Change in trade and other payables                  2,580          6,022 
    Change in contingent consideration                      -        (2,000) 
    Change in inventories                               (785)          (313) 
   Change in non-current assets                         (130)              - 
 Net cash flow used in operating activities          (13,067)       (11,863) 
---------------------------------------------  --------------  ------------- 
 
 Cash flow from investing activities 
 Payments for property, plant and equipment              (69)          (243) 
 Payments for intangible assets                         (131)           (87) 
 Cash inflow on sale of property, plant 
  and equipment                                             -              9 
 Bank interest and fees paid                             (17)              - 
 Deposit interest received                                  5              5 
 Net cash flow used in investing activities             (212)          (316) 
---------------------------------------------  --------------  ------------- 
 
 Cash flow from financing activities 
 Proceeds from issue of equity instruments 
  - net of expenses                                         -         14,393 
 Increase in long term debt                             5,000         10,000 
 Interest paid on long term debt                        (221)              - 
 Payment of deferred consideration                    (2,000)              - 
 Repayment of short-term loans                              -           (47) 
 Net cash flow from financing activities                2,779         24,346 
---------------------------------------------  --------------  ------------- 
 

 Exchange and other movements                           (201)             74 
---------------------------------------------  --------------  ------------- 
 
 Net change in cash and cash equivalents             (10,701)         12,241 
 Cash and cash equivalents at beginning 
  of year                                              20,512          8,271 
---------------------------------------------  --------------  ------------- 
 Restricted cash at end of year                         1,191            537 
---------------------------------------------  --------------  ------------- 
 Cash at bank available on demand at 
  end of year                                           8,620         19,975 
---------------------------------------------  --------------  ------------- 
 Total cash and cash equivalents at end 
  of year                                               9,811         20,512 
---------------------------------------------  --------------  ------------- 
 

Unaudited Consolidated Statement of Changes in Equity

For the year ended 31 December 2018

 
 
                                             Share                    Reverse       Exchange 
                     Share       Share       based      Merger    acquisition    translation    Accumulated 
                   capital     premium     payment     reserve        reserve        reserve        deficit      Total 
                                           reserve 
                   EUR'000     EUR'000     EUR'000     EUR'000        EUR'000        EUR'000        EUR'000    EUR'000 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 Balance at 1 
  January 2017      20,419      43,695       4,215      35,818       (62,107)            (5)        (8,998)     33,037 
 Loss for the 
  year                   -           -           -           -              -              -       (26,136)   (26,136) 
 Foreign 
  exchange 
  translation 
  reserve                -           -           -           -              -             27              -         27 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 Total 
  comprehensive 
  income                 -           -           -           -              -             27       (26,136)   (26,109) 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 Issue of 
  placing 
  shares - 
  Gross                754      14,329           -           -              -              -              -     15,083 
 Issue of 
  placing 
  shares - 
  Expenses               -       (690)           -           -              -              -              -      (690) 
 Share based 
  payment 
  expense                -           -         565           -              -              -              -        565 
 Share based 
  payment 
  expense 
  - Lapsed               -           -        (25)           -              -              -             25          - 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 Balance at 31 
  December 2017 
  - Audited         21,173      57,334       4,755      35,818       (62,107)             22       (35,109)     21,886 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 
 Balance at 1 
  January 2018      21,173      57,334       4,755      35,818       (62,107)             22       (35,109)     21,886 
 Loss for the 
  year                   -           -           -           -              -              -       (25,777)   (25,777) 
 Foreign 
  exchange 
  translation 
  reserve                -           -           -           -              -           (34)              -       (34) 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 Total 
  comprehensive 
  income                 -           -           -           -              -           (34)       (25,777)   (25,811) 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 Share based 
  payments               -           -         694           -              -              -              -        694 
 Share based 
  payments - 
  lapsed                 -           -         (6)           -              -              -              6          - 
 Balance at 31 
  December 2018 
  - Unaudited       21,173      57,334       5,443      35,818       (62,107)           (12)       (60,880)    (3,231) 
---------------  ---------  ----------  ----------  ----------  -------------  -------------  -------------  --------- 
 

Notes

1. General information

Amryt Pharma plc (the "Company") is a company incorporated in England and Wales. The Company is listed on the AIM market of the London Stock Exchange (ticker: AMYT.L) and the Euronext market of the Irish Stock Exchange (ticker: AYP). Amryt is a development and commercial stage pharmaceutical Company focused on acquiring, developing and delivering innovative new treatments to help improve the lives of patients with rare and orphan diseases.

2. Basis of preparation

The consolidated Financial Statements of the Group and the individual Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The condensed unaudited financial statements above have been prepared on a historical cost basis, except for contingent consideration that have been measured at fair value.

The condensed unaudited financial information in this announcement for the year ended 31 December 2018 does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. The financial information in respect of the year to 31 December 2017, has been extracted from the consolidated statutory financial statements for that year which have been delivered to the registrar of companies. The auditors have reported on those accounts. Their report was unqualified and did not contain statements under Section 498 (2) of (3) of the Companies Act 2006. The statutory accounts for 2018 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course.

3. Summary of Significant Accounting policies

The principal accounting policies are summarised below. They have been consistently applied throughout the period covered by the Financial Statements.

Research and development expenses

Development costs are capitalised as an intangible asset if all of the following criteria are met:

1. The technical feasibility of completing the asset so that it will be available for use or sale;

   2.    The intention to complete the asset and use or sell it; 
   3.    The ability to use or sell the asset; 

4. The asset will generate probable future economic benefits and demonstrate the existence of a market or the usefulness of the asset if it is to be used internally;

5. The availability of adequate technical, financial and other resources to complete the development and to use or sell it; and

   6.    The ability to measure reliably the expenditure attributable to the intangible asset. 

In process R&D acquired as part of a business combination is capitalised at the date of acquisition.

Research costs are expensed when they are incurred.

Factors which impact our judgement to capitalise certain research and development expenditure include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. We review these factors each year to determine whether our previous estimates as to feasibility, viability and recovery should be changed.

The assessment whether development costs can be capitalized requires management to make significant judgements. Management has reviewed the facts and circumstances of each project in relation to the above criteria and in management's opinion, the criteria prescribed for capitalising development costs as assets have not yet been met by the Group in relation to AP101 or AP102. Accordingly, all of the Group's costs related to research and development projects are recognised as expenses in the Consolidated Statement of Comprehensive Income in the period in which they are incurred. Management expects that the above criteria will be met on filing of a submission to the regulatory authority for final drug approval or potentially in advance of that on the receipt of information that strongly indicates that the development will be successful.

Revenue recognition

Revenue arises from the sale of Lojuxta and Imlan. The Group sells direct to customers and also uses third parties in the distribution of the product to customers.

To determine whether to recognise revenue, the company follows a 5-step process, as required by IFRS 15:

   1.    Identifying the contract with a customer 
   2.    Identifying the performance obligations 
   3.    Determining the transaction price 
   4.    Allocating the transaction price to the performance obligations 
   5.    Recognising revenue when/as performance obligation(s) are satisfied. 

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled to in exchange for those goods. The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.

Contingent consideration

Contingent consideration arising as a result of business combinations is initially recognised at fair value using a probability adjusted present value model. Key inputs in the model include the probability of success and the expected timing of potential revenues. The fair value of the contingent consideration will be updated at each reporting date. Adjustments to contingent consideration are recognised in the Consolidated Statement of Comprehensive Income.

Acquired intangible assets

Acquired intangible assets outside business combinations are stated at the lower of cost less provision for amortisation and impairment or the recoverable amount. Acquired intangibles assets are amortised over their expected useful economic life on a straight line basis. In determining the useful economic life each acquisition is reviewed separately and consideration given to the period over which the Group expects to derive economic benefit.

Intangible assets acquired in 2016 as part of the acquisitions of Amryt AG and SomPharmaceuticals are currently not being amortised as the assets are still under development.

- Ends

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