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COPENHAGEN, Denmark, April 24, 2020 (GLOBE NEWSWIRE) -- Forward Pharma A/S (FWP) (“We,” “Forward” or the “Company” and, together with its subsidiaries, the “Group”), today reported consolidated financial and operating results for the year ended December 31, 2019. Our net loss for the year ended December 31, 2019 was $(4.2) million, or $(0.04) per share, versus a net loss of $(8.7) million, or $(0.09) per share for the year ended December 31, 2018. Our research and development and general and administrative costs decreased from $12.3 million for the year ended December 31, 2018 to $5.3 million for the year ended December 31, 2019.
“The operating results reported today favorably reflect our persistent efforts to reduce costs and streamline our operations. We are well positioned financially to the start of the new year with significant cash reserves and working capital in excess of $77 million. Our primary focus remains on our intellectual property and we are working diligently to prepare for the oral hearing before the Technical Board of Appeal on the European EP2801355 patent to be held on June 18, 2020,” said Dr. Claus Bo Svendsen, Chief Executive Officer of Forward.
Operating Results for the Year Ended December 31, 2019
Research and development costs for the years ended December 31, 2019 and 2018 were $1.0 million and $2.7 million, respectively. The decrease in research and development costs for the year ended December 31, 2019 of $1.7 million is the result of lower costs incurred in connection with the EP2801355 patent (“‘355 Patent”) opposition in Europe (“Opposition Proceeding”), lower share-based compensation and the wind-down of our development efforts of FP187®.
General and administrative costs for the years ended December 31, 2019 and 2018 were $4.2 million and $9.5 million, respectively. The decrease in general and administrative costs in the year ended December 31, 2019 of $5.3 million resulted primarily from a decrease in legal and accounting costs, lower patent advisory fees, lower share-based compensation and an overall reduction in overhead costs.
During each of the years ended December 31, 2019 and 2018, the Group recognized foreign exchange gains of $759,000 and $2.7 million, respectively. The foreign exchange gains resulted from the strengthening of the United States Dollar compared to the Danish Kroner.
Other income for the years ended December 31, 2019 and 2018 were $303,000 and $644,000, respectively. Other income primarily includes interest income from United States Dollar cash deposits, net of bank fees.
Financial Position as of December 31, 2019
As of December 31, 2019, we have $77.6 million in cash and cash equivalents and our working capital is $77.6 million. We believe we have sufficient liquidity to allow us to meet our planned operating activities in the normal course of business beyond the year ending December 31, 2020. Unforeseen events could, however, negatively affect our ability to fund planned operations in the future.
Update on Intellectual Property Proceedings
On January 29, 2018, the Opposition Division of the European Patent Office (“EPO”) concluded the oral proceedings concerning the ‘355 Patent. The Opposition Division revoked the ‘355 Patent after considering third-party oppositions from several opponents. On March 22, 2018, the Opposition Division issued its detailed reasons for the decision. On May 7, 2018, the Company appealed the Opposition Division’s decision to the Technical Board of Appeal of the EPO (“TBA”) and filed its detailed grounds of appeal on August 1, 2018. On July 8, 2019, the Company received notice from the EPO that the appeal will be heard by the TBA on June 18, 2020. However, the hearing may be delayed as a result of the ongoing novel coronavirus 2019 (“COVID-19”) pandemic and, if the hearing is delayed, a new hearing date is currently unknown. Management expects the TBA to issue a ruling on the same day as the hearing with a fully-argued decision approximately two months following the hearing.
If the Company receives a favorable ruling following the hearing, it is expected that the TBA will remit the case to the Opposition Division, in order for the Opposition Division to resolve the remaining elements of the original opposition. Management estimates that this process would take approximately two to three years. However, delays can occur that would extend the time needed for the Opposition Division to reach a conclusion on the remaining elements of the original opposition. The Company is not entitled to any royalty payments from the Settlement and License Agreement by and among the Company and two wholly owned subsidiaries of Biogen, Inc. (“License Agreement”) until and unless all remaining elements of the original opposition are resolved in the Company’s favor. As such, the earliest time the Company may expect to receive any revenues from the License Agreement, if at all, is 2023.
If the Company receives an unfavorable ruling following the hearing, it would, for all practical purposes, represent an unsuccessful outcome of the Opposition Proceeding, resulting in no royalties being due to the Company from Biogen based on Biogen’s future net sales outside the United States, as defined in the License Agreement. The Company may request a rehearing of the June 18, 2020 hearing with the Enlarged Board of Appeal of the EPO in an effort to overturn the unfavorable outcome, but the likelihood of getting a rehearing is low. The denial of a request to rehear would end the Opposition Proceeding in favor of the opponents.
Annual Report on Form 20-F
Investors are encouraged to read Forward’s Annual Report on Form 20-F that was filed today with the U.S. Securities and Exchange Commission. Forward’s Annual Report includes important information about the Group that is not disclosed herein including, but not limited to, risk factors and our audited financial statements as of December 31, 2019 and 2018 and for each of the years ended December 31, 2019, 2018 and 2017.
Forward Pharma A/S
Condensed Consolidated Statement of Profit or Loss
(USD in thousands, except per share amounts)
Research and development costs
General and administrative costs
Operating (loss) (1)
Exchange rate gain, net
Other finance income
(Loss) before taxes
Income tax benefit
Net (loss) per share, basic and diluted (2)
Weighted average number of shares used to compute net (loss) per share basic and diluted (2)
(1) Non-cash share-based compensation included in operating expenses totaled $2.1 million for the year ended December 31, 2019 and $6.2 million for the year ended December 31, 2018.
(2) Each American Depositary Share (“ADS”) represented 2 ordinary shares until December 6, 2019 when the ADS ratio was changed to 14 ordinary shares per each ADS. Per share information included herein is computed based on one ordinary share.
Forward Pharma A/S
Condensed Consolidated Statement of Financial Position
(USD in thousands)
Cash and cash equivalents
Equity and Liabilities:
Total equity and liabilities
About Forward Pharma:
Forward Pharma A/S is a Danish biopharmaceutical company that commenced development in 2005 of a proprietary formulation of DMF for the treatment of inflammatory and neurological indications. The Company granted to Biogen an irrevocable license to all of its IP through the License Agreement and received from Biogen a non-refundable cash fee of $1.25 billion in February 2017, with the return of EUR 917.7 million to shareholders through a capital reduction in September 2017. The Company has the opportunity to receive royalties from Biogen on Biogen’s net sales of Tecfidera® or other DMF products for multiple sclerosis outside the U.S., dependent on, among other things, a favorable outcome in Europe with respect to the Opposition Proceeding, including any appeal thereto.
Our principal executive offices are located at Østergade 24A, 1st floor, 1100 Copenhagen K, Denmark and our American Depositary Shares are publicly traded on the Nasdaq Capital Market (FWP). For more information about the Company, please visit our website at http://www.forward-pharma.com.
Forward Pharma A/S Investor Relations Contact:
Forward Pharma A/S
Claus Bo Svendsen, MD, PhD
Chief Executive Officer
+1 (646) 378 2942
Forward Pharma A/S
Forward Looking Statements:
Certain statements in this press release may constitute “forward-looking statements” of Forward Pharma A/S within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements which contain language such as “believe,” “expect,” “anticipate,” “estimate,” “would,” “may,” “plan,” and “potential.” Forward-looking statements are predictions only, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, risks related to the following: the satisfaction of certain conditions, and the accuracy of certain representations of the Company, in the License Agreement entered into with subsidiaries of Biogen Inc. and certain other parties thereto; our ability to obtain, maintain, enforce and defend issued patents with royalty-bearing claims; our ability to prevail in or obtain a favorable decision in the Opposition Proceeding, after all appeals; the expected timing for key activities and an ultimate ruling in such legal proceedings; the issuance and term of our patents; future sales of Tecfidera®, including impact on such sales from competition, generic challenges, regulatory involvement and pricing pressures; the scope, validity and enforceability of our intellectual property rights in general and the impact on us of patents and other intellectual property rights of third parties; our ability to defend our tax filing positions; and the sufficiency of the Company's cash resources. Certain of these and other risk factors are identified and described in detail in certain of our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 20-F for the year ended December 31, 2019. We are providing this information as of the date of this release and do not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.