Insys Therapeutics Reports First Quarter 2013 Results

Marketwired

PHOENIX, AZ--(Marketwired - Jun 3, 2013) - Insys Therapeutics, Inc. (NASDAQ: INSY), a specialty pharmaceutical company that develops and commercializes innovative supportive care products, today announced its financial results for the three months ended March 31, 2013.

Financial highlights during the first quarter of 2013:

  • Total first quarter revenue increased to $11.1 million in 2013 versus $2.0 million in 2012
  • Sales of Subsys added $9.7 million in net revenue during the first three months of 2013
  • First quarter net income of $0.1 million and diluted earnings per share of $0.01 compared to a net loss of $6.7 million and diluted loss per share of $0.72 for the first quarter of 2012

"Growth in Subsys sales and a strengthened balance sheet from our May 2013 IPO have left us well-positioned to build upon our strong supportive care franchise and generate value for stockholders," said Michael L. Babich, President and Chief Executive Officer.

First Quarter 2013 Financial Results

Total net revenue increased by 446% to $11.1 million for the first quarter of 2013, compared with $2.0 million for the first quarter of 2012 as outlined below (in millions):

           
    Three Months Ended
March 31,
  Increase
(Decrease)
 
    2013   2012    
Product sales, net                    
  Subsys   $ 9.7   $ -   $ 9.7  
  Dronabinol SG Capsule     1.4     2.0     (0.6 )
Total net revenue   $ 11.1   $ 2.0   $ 9.1  
                     
                     

Net income for the first quarter of 2013 was $0.1 million and diluted earnings per share was $0.01 compared to a net loss of $6.7 million and diluted loss per share of $0.72 for the first quarter of 2012. Gross margin was 84% for the first quarter of 2013, compared with 37% for the first quarter of 2012, primarily a result of the increase in sales of Subsys, which has a higher gross margin than Dronabinol, during the first quarter of 2013.

Sales and marketing expense was $4.4 million during the first quarter of 2013 compared to $2.4 million for the first quarter of 2012. The increase was primarily due to variable sales compensation expenses associated with the increase in sales of Subys during the first three months of 2013.

Research and development expense decreased to $1.7 million for the first quarter of 2013 from $2.8 million for the first quarter of 2012, primarily due to the completion of development of Subsys during the three months ended March 31, 2012, combined with a decline in spending on the LEP-ETU and IL-13 programs during 2013.

General and administrative expense increased to $2.4 million for the first quarter of 2013 from $1.5 million for the first quarter of 2012, primarily due to costs incurred in connection with increases in administrative infrastructure to support the growth of Subsys sales combined with investments in public company infrastructure during 2013.

As of March 31, 2013, cash, cash equivalents and short-term investments were $0.7 million, compared with $0.4 million as of December 31, 2012. Subsequent to the end of the first quarter, Insys raised $31.0 million after underwriting discounts, commissions and estimated expenses in its initial public offering. 

About Insys Therapeutics, Inc.
 
Insys Therapeutics, Inc. is a commercial-stage specialty pharmaceutical company that develops and commercializes innovative supportive care products, with a focus on utilizing its proprietary formulation technologies to address the clinical shortcomings of existing commercial pharmaceutical products. The company has two marketed products including Subsys, a proprietary sublingual fentanyl spray for breakthrough pain in opioid-tolerant cancer patients. Insys markets Subsys through its incentive-based, cost-efficient commercial sales force. The company's lead product candidate is Dronabinol Oral Solution, a proprietary orally administered liquid formulation of dronabinol, which would be its second branded supportive care product, if approved.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the on-going commercialization of Insys' products and development of its product candidates and the company's positioning to build on its supportive care franchise and deliver value to stockholders. These forward-looking statements are based on management's expectations and assumptions as of the date of this press release, and actual results may differ materially from those in these forward-looking statements as a result of various factors. These factors include, but are not limited to risks regarding Insys' ability to commercialize products successfully, Insys' ability to successfully manage its commercial relationships and sales infrastructure, compliance with post-approval regulatory requirements and the company's need to potentially obtain additional financing to successfully commercialize or further develop its existing products and product candidates. For a further description of these and other risks facing Insys, please see the risk factors described in the company's filings with the United States Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in those filings. Forward-looking statements speak only as of the date of this press release and the company undertakes no obligation to update or revise these statements, except as may be required by law.

   
   
INSYS THERAPEUTICS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except share and per share amounts)  
             
             
    Three Months Ended March 31,  
    2013     2012  
Net revenue   $ 11,059     $ 2,026  
Cost of revenue     1,764       1,278  
Gross profit     9,295       748  
                 
Operating expenses:                
  Sales and marketing     4,423       2,404  
  Research and development     1,690       2,832  
  General and administrative     2,362       1,479  
Total operating expenses     8,475       6,715  
                 
Income (loss) from operations     820       (5,967 )
Interest and other expense, net     (677 )     (720 )
Income (loss) before income taxes     143       (6,687 )
Income tax benefit     -       -  
Net income (loss)   $ 143     $ (6,687 )
Net income (loss) allocable to preferred shareholders   $ 130     $ (6,123 )
Net income (loss) allocable to common shareholders   $ 13     $ (564 )
                 
Net income (loss) per common share:                
  Basic   $ 0.02     $ (0.72 )
  Diluted   $ 0.01     $ (0.72 )
                 
Shares used in computing net income (loss) per common share:                
  Basic     856,026       786,026  
  Diluted     1,937,891       786,026  
                 
                 
                 
INSYS THERAPEUTICS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands, except share amounts)  
             
             
    March 31,     December 31,  
    2013     2012  
ASSETS:                
Cash and cash equivalents   $ 686     $ 361  
Accounts receivable, net     5,817       3,089  
Inventories     8,178       7,095  
Prepaid expenses and other current assets     1,046       1,343  
Non-current assets     6,504       6,852  
Total assets   $ 22,231     $ 18,741  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
Accounts payable and accrued expenses   $ 11,714     $ 9,411  
Deferred revenue     3,614       3,767  
Line of credit (a)     11,358       11,858  
Notes payable to related party, including interest (a)     59,021       58,383  
Stockholders' deficit     (63,476 )     (64,678 )
Total liabilities and stockholders' deficit   $ 22,231     $ 18,741  
                 
(a) Converted to common stock or retired in May 2013.         
 
Contact:
Company
Darryl S. Baker
Chief Financial Officer
Insys Therapeutics, Inc.
(602) 910-2617

Investor
John Woolford
Managing Director
Westwicke Partners, LLC
(443) 213-0506
View Comments (0)