Egalet (EGLT) Tops Q2 EPS by 6c, Revenues Miss

Egalet (NASDAQ: EGLT) reported Q2 EPS of ($0.22), $0.06 better than the analyst estimate of ($0.28). Revenue for the quarter came in at $7.4 million versus the consensus estimate of $7.99 million.

"In the second quarter, we continued to grow our commercial products and improve our payer coverage," said Bob Radie, president and chief executive officer of Egalet. "Since the beginning of the year, we have had five commercial market access wins which we believe should improve patient access to both SPRIX Nasal Spray and ARYMO ER."

• Cash Position: As of June 30, 2018, Egalet had cash, marketable securities and restricted cash totaling $70.4 million.
• Net Product Sales: There were net product sales of $7.4 million for the three months ended June 30, 2018 compared to $6.3 million for the same period in 2017. Net product sales for the three months ended June 30, 2018 consisted of $5.4 million for SPRIX Nasal Spray, $1.7 million for OXAYDO and $351,000 for ARYMO ER. Net product sales for the three months ended June 30, 2017 consisted of $4.9 million for SPRIX Nasal Spray, $1.3 million for OXAYDO and $31,000 for ARYMO ER. Net product sales in the three months ended June 30, 2017 reflected prescriptions dispensed to patients. Due to the adoption of the ASC 606 on January 1, 2018, net product sales in the three months ended June 30, 2018 reflected shipments to customers.
• Cost of Sales (excluding product rights amortization): Cost of sales was $1.6 million for the three months ended June 30, 2018 and $1.1 million for the same period in 2017. Cost of sales for SPRIX Nasal Spray, OXAYDO and ARYMO ER for the three months ended June 30, 2018 reflects the average cost of inventory shipped to wholesalers and specialty pharmaceutical companies during the period. Cost of sales for SPRIX Nasal Spray and OXAYDO for the three months ended June 30, 2017 reflects the average cost of inventory produced and dispensed to patients in the period. Cost of sales for ARYMO ER for the three months ended June 30, 2017 includes the portion of inventory produced after the FDA approval of ARYMO ER in January 2017. The portion of inventory produced before the FDA approval of ARYMO ER was recorded in research and development expense in prior periods.
• G&A Expenses: General and administrative expenses were $6.7 million for the three months ended June 30, 2018 compared to $12.5 million for the same period in 2017. The decrease in the period is due to $4.5 million related to ARYMO ER post-marketing study fees incurred in the three months ended June 30, 2017 and a decrease in salary and stock-based compensation expense of $1.1 million for the three months ended June 30, 2018 due to reduced headcount.
• S&M Expenses: Sales and marketing expenses were $9.0 million for the three months ended June 30, 2018 compared to $9.3 million for the same period in 2017.
• R&D Expenses: Research and development expenses were $1.0 million for the three months ended June 30, 2018 compared to $4.6 million for the same period in 2017. The decrease in the period was driven primarily by a decrease in compensation-related expenses of $1.1 million and a decrease in development costs for Egalet-002 of $3.1 million in the three months ended June 30, 2018.
• Change in Fair Value of Warrant Liability and Derivative Liability: During the three months ended June 30, 2018, Egalet recognized a change in the fair value of its derivative liabilities of $3.2 million. The change in fair value of the derivative liability is due primarily to the changes in the value of Egalet\'s common stock during the three months ended June 30, 2018.
• Interest Expense: Interest expense for the three months ended June 30, 2018 was $3.8 million compared to interest expense of $4.7 million for the same period in 2017. The decrease was driven primarily by the decrease in interest expense of $1.2 million related to the extinguishment of $36.4 million of the 5.50% Notes in December 2017, offset by an increase of $451,000 related to the issuance of $23.9 million of 6.50% Notes. The interest expense of $3.8 million for the three months ended June 30, 2018 includes non-cash interest and amortization of debt discount totaling $697,000. The interest expense of $4.7 million for the three months ended June 30, 2017 includes non-cash interest and amortization of debt discount totaling $1.6 million.
• Net Loss: Net loss for the three months ended June 30, 2018 was ($12.0 million), or ($0.22) per share, compared to a net loss of ($26.5 million), or ($1.04) per share for the same period in 2017.

For earnings history and earnings-related data on Egalet (EGLT) click here.

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