AMRYT REPORTS RECORD Q3 2020
RESULTS
19% YoY revenue growth in the quarter to
$49.3M
Raising full year revenue guidance to
$180M - $182M
Both metreleptin and lomitapide driving
revenue performance and growth
Strong cash generation with cash of
$75.4M at September 30
Positive results reported from EASE
pivotal Phase 3 study in Epidermolysis Bullosa
Conference call and webcast today at 0930
EST / 1430 GMT
DUBLIN, Ireland, and Boston MA, November
5, 2020, Amryt (Nasdaq: AMYT, AIM: AMYT), a global,
commercial-stage biopharmaceutical company dedicated to developing
and commercializing novel therapeutics to treat patients suffering
from serious and life-threatening rare diseases, today announces
unaudited financial results and provides a business update for the
third quarter ended September 30, 2020.
- 19% YoY growth in unaudited Q3 revenues to $49.3M (Q3 20191
unaudited combined revenues: $41.4M)
- 23% YoY growth in unaudited cumulative YTD revenues to $140.1M
(Nine months 20191 unaudited combined revenues: $113.6M)
- 7% QoQ revenue growth in Q3 versus Q2 ($46.2M)
- Raising FY 2020 revenue guidance from $170M - $175M to $180M -
$182M (20191: $154.1m)
- $3.6M operating loss before finance expense in Q3.
Excluding non-cash items and share based compensation expenses,
this resulted in EBITDA3 of $13.5M in Q3 representing 96% QoQ
growth
- Strong cash generation during the nine months to September 2020
with $21.1M of cash generated from operating activities YTD and
$11.4M during the quarter
- Increase in cash from $67.1M at June 30, 2020 to $75.4M at
September 30, 2020
- Amryt announced positive results from EASE pivotal Phase 3
trial in EB. The primary endpoint of the trial was achieved and
demonstrated a statistically significant acceleration of target
wound healing by day 45 in patients treated with FILSUVEZ®2 vs
control gel (p-value = 0.013) representing a 44% increase in target
wound closure with FILSUVEZ® vs the control gel. EASE is the
largest ever Phase 3 randomized controlled study conducted in
EB.
- The RDEB sub-group was observed to experience a greater benefit
when treated with FILSUVEZ® than the overall population (nominal
p=0.008) representing a 72% increase in target wound closure with
FILSUVEZ® vs the control gel
- Favourable trends were evident among secondary endpoints
including change in procedural pain, EBDASI score and BSAP
- FILSUVEZ® had an acceptable safety profile and was well
tolerated when compared with control gel
- On July 8, Amryt listed on the Nasdaq Global Select Market
(“Nasdaq”)
Joe Wiley, CEO of Amryt Pharma,
commented:
“I am very pleased with today’s record results
which demonstrate the positive performance and growth that our
commercial products are delivering alongside the significant
progress we are achieving in our exciting development pipeline of
new therapeutic drug candidates. The positive momentum we
experienced during the first half of the year has continued through
Q3 and I am very pleased with both our revenue growth and positive
cash momentum. Furthermore, given the strong performance of the
business year to date we are now increasing our revenue guidance
for 2020 from $170-$175 million to $180-$182 million.
We are also very pleased with the positive
results for FILSUVEZ® from our EASE Phase 3 trial in EB. EASE
is the first ever Phase 3 study to demonstrate positive data in
this devastating disease and we look forward to submitting this
data to regulatory authorities in both the US and Europe in early
2021. If approved, we intend to launch FILSUVEZ® in the US in
Q4 2021 and in Europe in Q1 2022.
Our two commercial products, metreleptin and
lomitapide continue to deliver growth across a host of metrics
including revenue and EBITDA growth, cash generation and market
expansion. We have the management team, systems and
infrastructure in place to continue to grow our existing commercial
products and also to launch FILSUVEZ® if approved next year”.
Q3 and Recent Business
Highlights:
- In July, Amryt listed on Nasdaq
- In September, Amryt announced positive top line data from the
pivotal EASE Global Phase 3 trial in EB. The primary endpoint was
achieved with statistical significance (p-value=0.013) representing
a 44% increase in target wound closure with FILSUVEZ® vs the
control gel. EASE is the largest ever Phase 3 study conducted
in EB.
- The RDEB sub-group was observed to experience a greater benefit
when treated with FILSUVEZ® than the overall population (nominal
p-value=0.008) representing a 72% increase in target wound closure
with FILSUVEZ® vs the control gel
- In September, the European Medicines Agency (“EMA”) Committee
for Orphan Medicinal Products (“COMP”) adopted a positive opinion
for orphan designation for the use of AP103 in EB
- In October, Amryt signed a distribution agreement for Lojuxta®
(lomitapide) with Swixx BioPharma AG (“Swixx”) across 17
jurisdictions in Central and Eastern Europe. This follows on
from Amryt’s appointment in June 2020 of Swixx as exclusive
distributor of Myalepta® (metreleptin) across the CEE
territories.
Q3 2020 Financial
Highlights:
·$49.3M unaudited Q3 revenues representing a 19%
increase on unaudited combined revenues of $41.4M in Q3 20191
·7% QoQ unaudited revenue growth in Q3 versus Q2
($46.2M)
·31% growth in Myalept® / Myalepta®
(metreleptin) revenues to $29.9M in the quarter (Q3 2019:
unaudited combined revenues1 $22.9M). Metreleptin
revenues were bolstered by a $6.9M order in LATAM during Q3
2020. Unlike in other regions, ordering patterns in LATAM can
be sporadic in nature and therefore we do not expect this revenue
to recur in Q4.
·4% increase in Juxtapid®/Lojuxta® (lomitapide)
revenues to $19.1M in the quarter (Q3 2019: unaudited combined
revenues1 $18.3M)
·US accounted for 51% of global revenues and
EMEA accounted for 28% of global revenues in Q3
1 Unaudited
combined revenues for 2019 represent the combined unaudited
revenues of the Company assuming the acquisition by Amryt of
Aegerion happened on 1 January 2019. It also (i) excludes
revenues from sales to end-users in Japan following the
out-licencing of Juxtapid to Recordati in February 2019, (ii)
excludes up-front payments from Recordati in 2019, and (iii)
includes a 22.5% royalty on Japanese sales of Juxtapid from 1
January 2019 as if the Recordati agreement was in place from that
date.2 For the purposes of this
announcement, we use the name FILSUVEZ® which has been selected as
the brand name for the product but please note, Amryt does not, as
yet, have regulatory approval for FILSUVEZ® to treat EB
IFRS and non-GAAP adjusted Q3
results:
|
US$M |
Q3 2019(unaudited) |
Q3 2020(unaudited) |
Q3 2020 Non-cash Items4 |
Q3 2020 Non-GAAP Adjusted |
|
Revenue |
8.6 |
49.3 |
- |
49.3 |
|
Gross profit |
5.5 |
22.3 |
15.1 |
37.4 |
|
R&D |
(2.4) |
(7.4) |
- |
(7.4) |
|
SG&A |
(6.0) |
(16.9) |
0.5 |
(16.4) |
|
Acquisition & severance related costs |
(8.7) |
(0.1) |
- |
(0.1) |
|
Share based compensation expenses |
(0.1) |
(1.5) |
1.5 |
- |
|
Operating (loss) / profit before finance
expense |
(11.7) |
(3.6) |
17.1 |
13.53 |
The Q3 operating loss of $3.6M includes the
impact of non-cash items including amortisation, depreciation and
the impact of share-based compensation expenses. Adjusting
for these non-cash items, the Company delivered $13.5M of
EBITDA3 for the quarter. R&D expenses
increased to $7.4M in Q3 (Q2: $6.2M). SG&A expenses
decreased in Q3 to $16.9M (Q2: $21.6M).
3 EBITDA is
earnings before interest, tax, depreciation, amortisation and share
based compensation expenses. To supplement Amryt's financial
results presented in accordance with IFRS generally accepted
accounting principles, the Company uses EBITDA as a key measure of
company performance as the Company believes that this measure is
most reflective of the operational profitability or loss of the
Company and provides management and investors with useful
supplementary information which can enhance their ability to
evaluate the operating performance of the business. EBITDA,
as measured by the Company, is not meant to be considered in
isolation or as a substitute to operating profit / loss
attributable to Amryt and should be read in conjunction with the
Company's condensed consolidated financial statements prepared in
accordance with IFRS.
4 Non-cash
items include amortisation of the acquired metreleptin and
lomitapide intangible assets ($10.0M), amortisation of the
inventory fair value step-up that was acquired at the acquisition
date ($5.1M), depreciation ($0.5M) and share based compensation
expenses ($1.5M).
Financial Position:
Cash generated from operating activities in Q3
was $11.4M. During the quarter, the Company paid $1.5M in net
finance payments, $4.2M in residual payments related to legacy
fines levied on Aegerion and $0.4M in capital expenditure.
The legacy fines will be fully discharged by the end of Q1 2021. At
September 30, 2020, the Company had cash of $75.4M (unaudited),
compared to cash at June 30, 2020 of $67.1M (unaudited).
Raising FY 2020 Financial
Guidance:
Revenues for the FY 2020 are expected to be in
the range of $180M-$182M compared to prior guidance of $170M
-$175M.
Webcast and Conference
Call:
Management will host a webcast for analysts and
investors today at 0930 EST / 1430
GMT.
Webcast Player URL:
https://edge.media-server.com/mmc/p/dor9m4ay
Telephone Dial in details:
|
Standard International Number |
+44 (0) 203 009 5709 |
|
United States |
+1 646 787 1226 |
|
United Kingdom (Local) |
+44 (0) 844 493 6766 |
|
Ireland |
+ 353 (1) 506 0626 |
|
|
|
|
Confirmation Code |
2865629 |
A playback facility will be available from
November 5, 2020 at 1930 GMT – November 12, 2020 at 1930 GMT.
Access details as follows: Confirmation Code: 2865629 ; US: +1 917
677 7532 ; UK/International: +44 (0) 3333 00 9785 ; Ireland: +353
(1) 553 8777.
Enquiries:
| Amryt
Pharma plc |
+353 (1) 518
0200 |
| Joe Wiley, CEO
Rory Nealon, CFO/COO |
|
|
LifeSci Advisors, LLC |
+1 (212) 915
2564 |
| Tim
McCarthy |
|
|
Consilium Strategic Communications |
+44 (0)
20 3709 5700 |
| Amber Fennell,
Matthew Neal, Ashley Tapp |
|
About Amryt
Amryt is a biopharmaceutical company focused on
developing and delivering innovative new treatments to help improve
the lives of patients with rare and orphan diseases. Amryt
comprises a strong and growing portfolio of commercial and
development assets.
Amryt’s commercial business comprises two orphan
disease products.
Amryt's lead development candidate, FILSUVEZ® is
a potential treatment for the cutaneous manifestations of EB, a
rare and distressing genetic skin disorder affecting young children
and adults for which there is currently no approved
treatment. In September and October 2020, Amryt reported
positive results from its pivotal global phase 3 trial of FILSUVEZ®
in EB. FILSUVEZ® has been granted Rare Pediatric Disease
Designation and has also received a Fast Track Designation from the
U.S. Food and Drug Administration.
Myalept® / Myalepta® (metreleptin) is approved
in the US (under the trade name Myalept®) as an adjunct to diet as
replacement therapy to treat the complications of leptin deficiency
in patients with congenital or acquired generalized lipodystrophy
(GL) and in the EU (under the trade name Myalepta®) for the
treatment of leptin deficiency in patients with congenital or
acquired GL in adults and children two years of age and above and
familial or acquired partial lipodystrophy (PL) in adults and
children 12 years of age and above for whom standard treatments
have failed to achieve adequate metabolic control. Metreleptin is
also approved for lipodystrophy in Japan. Generalised and partial
lipodystrophy are rare disorders characterised by loss or lack of
adipose tissue resulting in the deficiency of the hormone leptin,
produced by fat cells and are associated with severe metabolic
abnormalities including severe insulin resistance, diabetes,
hypertriglyceridemia and fatty liver disease.
Juxtapid®/ Lojuxta® (lomitapide) is approved as
an adjunct to a low-fat diet and other lipid-lowering medicinal
products for adults with the rare cholesterol disorder, Homozygous
Familial Hypercholesterolaemia ("HoFH") in the US, Canada,
Columbia, Argentina and Japan (under the trade name Juxtapid®) and
in the EU (under the trade name Lojuxta®). HoFH is a rare genetic
disorder which 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
cardiovascular disease.
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, including
products, please visit www.amrytpharma.com.
This announcement contains inside information
for the purposes of article 7 of the Market Abuse Regulation (EU)
596/2014. The person making this notification on behalf of
Amryt is Rory Nealon, CFO/COO and Company Secretary.
Financial Advisors
Shore Capital (Edward Mansfield, Daniel
Bush, John More) are NOMAD and Joint Broker to Amryt in the UK.
Stifel (Ben Maddison) are Joint Broker to the company in the
UK. Davy (John Frain, Daragh O’Reilly) act as Joint Broker to
the company.
Forward-Looking Statements
Statements in this announcement with respect to
Amryt's business, strategies, timing for completion of and
announcing results from the EASE trial, the potential impact of
closing enrollment in the EASE trial, as well as other statements
that are not historical facts are forward-looking statements
involving risks and uncertainties which could cause the actual
results to differ materially from such statements. Statements
containing the words "expect", "anticipate", "intends", "plan",
"estimate", "aim", "forecast", "project" and similar expressions
(or their negative) identify certain of these forward-looking
statements. The forward-looking statements in this announcement are
based on numerous assumptions and Amryt's present and future
business strategies and the environment in which Amryt expects to
operate in the future. Forward-looking statements involve inherent
known and unknown risks, uncertainties and contingencies because
they relate to events and depend on circumstances that may or may
not occur in the future and may cause the actual results,
performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. These
statements are not guarantees of future performance or the ability
to identify and consummate investments. Many of these risks and
uncertainties relate to factors that are beyond each of Amryt's
ability to control or estimate precisely, such as future market
conditions, the course of the COVID-19 pandemic, currency
fluctuations, the behaviour of other market participants, the
outcome of clinical trials, the actions of regulators and other
factors such as Amryt's ability to obtain financing, changes in the
political, social and regulatory framework in which Amryt operates
or in economic, technological or consumer trends or conditions.
Past performance should not be taken as an indication or guarantee
of future results, and no representation or warranty, express or
implied, is made regarding future performance. No person is under
any obligation to update or keep current the information contained
in this announcement or to provide the recipient of it with access
to any additional relevant information that may arise in connection
with it. Such forward-looking statements reflect the Company’s
current beliefs and assumptions and are based on information
currently available to management.
|
Amryt Pharma plc Condensed Consolidated Statement of
Comprehensive Loss |
| |
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
| |
|
2020 (unaudited) |
|
2019 (unaudited) |
|
2020 (unaudited) |
|
2019 (unaudited) |
| |
Note |
US$’000 |
|
US$’000 |
| Revenue |
3 |
49,326 |
|
|
8,637 |
|
|
140,085 |
|
|
17,828 |
|
| Cost of
sales |
|
(27,057 |
) |
|
(3,127 |
) |
|
(89,148 |
) |
|
(6,831 |
) |
| Gross
profit |
|
22,269 |
|
|
5,510 |
|
|
50,937 |
|
|
10,997 |
|
| Research and
development expenses |
|
(7,350 |
) |
|
(2,414 |
) |
|
(22,481 |
) |
|
(7,632 |
) |
| Selling,
general and administrative expenses |
|
(16,889 |
) |
|
(5,999 |
) |
|
(56,883 |
) |
|
(15,946 |
) |
| Acquisition
and severance related costs |
|
(105 |
) |
|
(8,743 |
) |
|
(1,005 |
) |
|
(11,362 |
) |
| Share based
payment expenses |
4 |
(1,533 |
) |
|
(97 |
) |
|
(3,136 |
) |
|
(319 |
) |
|
Operating loss before finance expense |
|
(3,608 |
) |
|
(11,743 |
) |
|
(32,568 |
) |
|
(24,262 |
) |
| Non-cash
change in fair value of contingent consideration |
5 |
(2,126 |
) |
|
(1,448 |
) |
|
(8,150 |
) |
|
(5,299 |
) |
| Non-cash
contingent value rights finance expense |
5 |
(1,557 |
) |
|
— |
|
|
(4,498 |
) |
|
— |
|
| Net finance
expense - other |
|
(1,359 |
) |
|
(2,291 |
) |
|
(15,492 |
) |
|
(3,623 |
) |
| Loss
on ordinary activities before taxation |
|
(8,650 |
) |
|
(15,482 |
) |
|
(60,708 |
) |
|
(33,184 |
) |
| Tax
(charge)/credit on loss on ordinary activities |
|
(1,821 |
) |
|
(77 |
) |
|
3,171 |
|
|
(93 |
) |
| Loss for
the period attributable to the equity holders of the
Company |
|
(10,471 |
) |
|
(15,559 |
) |
|
(57,537 |
) |
|
(33,277 |
) |
| Exchange
translation differences which may be reclassified through profit or
loss |
|
(1,921 |
) |
|
59 |
|
|
(2,850 |
) |
|
59 |
|
| Total other
comprehensive loss |
|
(1,921 |
) |
|
59 |
|
|
(2,850 |
) |
|
59 |
|
| Total
comprehensive loss for the period attributable to the equity
holders of the Company |
|
(12,392 |
) |
|
(15,500 |
) |
|
(60,387 |
) |
|
(33,218 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Loss
per share |
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per share
- basic and diluted, attributable to ordinary equity holders of the
parent (US$) |
6 |
(0.07 |
) |
|
(0.28 |
) |
|
(0.37 |
) |
|
(0.69 |
) |
|
Amryt Pharma plc Condensed Consolidated Statement of
Financial Position |
| |
|
As at, |
|
| |
|
September 30,
2020(unaudited) |
December 31,2019
restated(see note 15) |
|
| |
Note |
US$’000 |
|
| |
|
|
|
|
|
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
| Goodwill |
7 |
|
24,086 |
|
24,086 |
|
|
| Intangible
assets |
7 |
|
312,704 |
|
342,327 |
|
|
| Property,
plant and equipment |
|
|
6,859 |
|
3,036 |
|
|
| Other
non-current assets |
|
|
1,277 |
|
1,873 |
|
|
| Total
non-current assets |
|
344,926 |
|
371,322 |
|
|
|
Current assets |
|
|
|
|
| Trade and
other receivables |
8 |
|
42,195 |
|
35,500 |
|
|
|
Inventories |
|
|
44,932 |
|
58,000 |
|
|
| Cash and cash
equivalents, including restricted cash |
9 |
|
75,382 |
|
67,229 |
|
|
| Total
current assets |
|
162,509 |
|
160,729 |
|
|
| Total
assets |
|
507,435 |
|
532,051 |
|
|
| |
|
|
|
|
| Equity
and liabilities |
|
|
|
|
| Equity
attributable to owners of the parent |
|
|
|
|
| Share
capital |
10 |
|
12,548 |
|
11,918 |
|
|
| Share
premium |
10 |
|
16,553 |
|
2,422 |
|
|
| Other
reserves |
|
|
234,099 |
|
248,630 |
|
|
| Accumulated
deficit |
|
|
(188,618 |
) |
(131,137 |
) |
|
| Total
equity |
|
74,582 |
|
131,833 |
|
|
|
Non-current liabilities |
|
|
|
|
| Contingent
consideration and contingent value rights |
5 |
|
117,791 |
|
102,461 |
|
|
| Deferred tax
liability |
|
|
9,649 |
|
12,102 |
|
|
| Long term
loan |
11 |
|
85,835 |
|
81,610 |
|
|
| Convertible
notes |
12 |
|
99,986 |
|
96,856 |
|
|
| Provisions and
other liabilities |
13 |
|
4,657 |
|
4,963 |
|
|
| Total
non-current liabilities |
|
317,918 |
|
297,992 |
|
|
|
Current liabilities |
|
|
|
|
| Trade and
other payables |
|
|
100,226 |
|
78,351 |
|
|
| Provisions and
other liabilities |
13 |
|
14,709 |
|
23,875 |
|
|
| Total
current liabilities |
|
114,935 |
|
102,226 |
|
|
| Total
liabilities |
|
432,853 |
|
400,218 |
|
|
| Total
equity and liabilities |
|
507,435 |
|
532,051 |
|
|
|
Amryt Pharma plc Condensed Consolidated Statement of
Cash Flows |
| |
|
Nine Months Ended September 30, |
| |
|
2020(unaudited) |
2019(unaudited) |
| |
Note |
US$’000 |
| Cash
flows from operating activities |
|
|
|
| Loss on
ordinary activities after taxation |
|
(57,537 |
) |
(33,277 |
) |
| Net finance
expense - other |
|
|
15,492 |
|
3,623 |
|
| Depreciation and
amortization |
|
33,313 |
|
447 |
|
| Amortization of
inventory fair value step-up |
|
21,015 |
|
— |
|
| Share based
payment expenses |
4 |
|
3,136 |
|
319 |
|
| Non-cash change
in fair value of contingent consideration |
5 |
|
8,150 |
|
5,299 |
|
| Non-cash
contingent value rights finance expense |
5 |
|
4,498 |
|
— |
|
| Deferred taxation
credit |
|
(2,452 |
) |
— |
|
| Movements in
working capital and other adjustments: |
|
|
|
|
Change in trade and other receivables |
8 |
|
(6,695 |
) |
(1,575 |
) |
|
Change in trade and other payables |
|
|
21,875 |
|
3,951 |
|
|
Change in provision and other liabilities |
13 |
|
(12,328 |
) |
— |
|
|
Change in inventories |
|
|
(7,948) |
|
(1,078 |
) |
|
Change in non-current assets |
|
596 |
|
72 |
|
| Net cash
flow from (used in) operating activities |
|
21,115 |
|
(22,219 |
) |
| |
|
|
|
| Cash flow
from investing activities |
|
|
|
| Net cash received
on acquisition of subsidiary |
|
|
— |
|
24,985 |
|
| Payments for
property, plant and equipment |
|
|
(147 |
) |
(465 |
) |
| Payments for
intangible assets |
|
|
(298 |
) |
— |
|
| Deposit interest
received |
|
86 |
|
2 |
|
| Net cash
flow (used in) from investing activities |
|
(359 |
) |
24,522 |
|
| |
|
|
|
| Cash flow
from financing activities |
|
|
|
| Proceeds from
issue of equity instruments |
|
|
— |
|
45,162 |
|
| Proceeds from
long term debt borrowings net of debt issue costs |
|
|
— |
|
27,551 |
|
| Repayment of long
term debt |
|
|
— |
|
(21,990 |
) |
| Payment of
leases |
|
|
(846 |
) |
(239 |
) |
| Interest
paid |
|
(6,190 |
) |
(2,019 |
) |
| Net cash
flow (used in) from financing activities |
|
(7,036 |
) |
48,465 |
|
| |
|
|
|
| Exchange
and other movements |
|
(5,567 |
) |
(354 |
) |
| Net
change in cash and cash equivalents |
|
8,153 |
|
50,414 |
|
| Cash and cash
equivalents at beginning of the period |
|
67,229 |
|
11,226 |
|
|
Restricted cash at end of the period |
|
|
792 |
|
16,051 |
|
| Cash at
bank available on demand at end of the period |
|
|
74,590 |
|
45,589 |
|
| Total
cash and cash equivalents at end of the period |
|
|
75,382 |
|
61,640 |
|
|
Amryt Pharma plc Condensed Consolidated Statement of
Changes in EquityFor the period ended September
30, 2020 |
| |
|
Share capital |
Share premium |
Warrant reserve |
Treasury shares |
Share based payment reserve |
Merger reserve |
Reverse acquisition reserve |
Equity component of convertible notes |
Other distributable reserves |
Currency translation reserve |
Accumulated deficit |
Total |
| |
Note |
US$’000 |
| Balance at
January 1, 2020 restated (see note 15) |
|
11,918 |
|
2,422 |
|
29,523 |
|
(7,534 |
) |
3,190 |
|
42,627 |
|
(73,914 |
) |
29,210 |
|
217,634 |
|
7,894 |
|
(131,137 |
) |
131,833 |
|
| Loss for the
period |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(57,537 |
) |
(57,537 |
) |
| Foreign
exchange translation reserve |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,850 |
) |
— |
|
(2,850 |
) |
| Total
comprehensive loss for the period |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,850 |
) |
(57,537 |
) |
(60,387 |
) |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issue of
shares in exchange for warrants |
10 |
|
630 |
|
14,131 |
|
(14,761 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
| Share based
payment expense |
4 |
|
— |
|
— |
|
— |
|
— |
|
3,136 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3,136 |
|
| Share based
payment expense – lapsed |
|
— |
|
— |
|
— |
|
— |
|
(56 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
56 |
|
— |
|
| Total
transactions with owners |
|
630 |
|
14,131 |
|
(14,761 |
) |
— |
|
3,080 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
56 |
|
3,136 |
|
|
Balance at September 30, 2020 (unaudited) |
|
12,548 |
|
16,553 |
|
14,762 |
|
(7,534 |
) |
6,270 |
|
42,627 |
|
(73,914 |
) |
29,210 |
|
217,634 |
|
5,044 |
|
(188,618 |
) |
74,582 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amryt Pharma plc Condensed Consolidated Statement of
Changes in EquityFor the period ended September
30, 2019 |
| |
|
Share capital |
Share premium |
Warrant reserve |
Treasury shares |
Share based payment reserve |
Merger reserve |
Reverse acquisition reserve |
Equity component of convertible notes |
Other distributable reserves |
Currency translation reserve |
Accumulated deficit |
Total |
| |
Note |
US$’000 |
| Balance at
January 1, 2019 (audited) |
|
25,198 |
|
68,233 |
|
— |
|
— |
|
6,473 |
|
42,627 |
|
(73,914 |
) |
— |
|
— |
|
(51 |
) |
(72,263 |
) |
(3,697 |
) |
| Loss for the
period |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(33,277 |
) |
(33,277 |
) |
| Foreign
exchange translation reserve |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
59 |
|
— |
|
59 |
|
| Total
comprehensive loss for the period |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
59 |
|
(33,277 |
) |
(33,218 |
) |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share
consolidation |
10 |
(21,262 |
) |
21,262 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
| Issue of
shares in August 2019 equity fund raise |
10 |
533 |
|
7,467 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
8,000 |
|
| Issue costs
associated with August 2019 equity fund raise |
10 |
— |
|
(1,886 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,886 |
) |
| Acquisition of
subsidiary without a change of control |
10 |
(495 |
) |
(3,726 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,969 |
) |
7,190 |
|
— |
|
— |
|
| Issue of
shares and warrants in consideration of Aegerion Acquisition |
10 |
5,759 |
|
132,392 |
|
14,464 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
152,615 |
|
| Issue of
shares and warrants in equity fund raise |
10 |
2,059 |
|
47,338 |
|
10,603 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
60,000 |
|
| Issue costs
associated with September 2019 equity fund raise |
10 |
— |
|
(2,575 |
) |
(530 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(3,105 |
) |
| Issue of
convertible notes |
12 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
29,210 |
|
— |
|
— |
|
— |
|
29,210 |
|
| Issue of
contingent value rights |
5 |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(47,902 |
) |
— |
|
— |
|
(47,902 |
) |
| Share based
payment expense |
4 |
|
— |
|
— |
|
— |
|
— |
|
319 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
319 |
|
| Total
transactions with owners |
|
(13,406 |
) |
200,272 |
|
24,537 |
|
— |
|
319 |
|
— |
|
— |
|
29,210 |
|
(50,871 |
) |
7,190 |
|
— |
|
197,251 |
|
|
Balance at September 30, 2019 (unaudited) |
|
11,792 |
|
268,505 |
|
24,537 |
|
— |
|
6,792 |
|
42,627 |
|
(73,914 |
) |
29,210 |
|
(50,871 |
) |
7,198 |
|
(105,540 |
) |
160,336 |
|
1. General information
We are a global, commercial-stage biopharmaceutical company
dedicated to commercializing and developing novel therapeutics to
treat patients suffering from serious and life-threatening rare
diseases.
As used herein, references to ‘‘we,’’ ‘‘us,’’ ‘‘Amryt’’ or the
‘‘Group’’ in these condensed consolidated interim financial
statements shall mean Amryt Pharma plc and its global subsidiaries,
collectively. References to the ‘‘Company’’ in these condensed
consolidated interim financial statements shall mean Amryt Pharma
plc.
Amryt Pharma plc is a company incorporated in England and Wales.
The Company is listed on Nasdaq (ticker:AMYT) and the AIM market of
the London Stock Exchange (ticker: AMYT).
Aegerion Pharmaceuticals, Inc. (‘‘Aegerion’’), a former
subsidiary of Novelion Therapeutics Inc. (‘‘Novelion’’), is a rare
and orphan disease company with a diversified offering of multiple
commercial and development stage assets. The acquisition of
Aegerion by Amryt in September 2019 has given Amryt an expanded
commercial footprint to market two U.S. and EU approved products,
lomitapide (JUXTAPID (U.S.) / LOJUXTA (EU)) and metreleptin
(MYALEPT (U.S.) / MYALEPTA (EU)).
On July 10, 2019, the shareholders of the Company approved a
resolution to give authority to the Company to undertake a
consolidation of the existing ordinary shares in the capital of the
Company under which every six existing ordinary shares were
consolidated into one ordinary share. The number of shares in issue
at September 30, 2019 has been adjusted to reflect this share
consolidation on July 10, 2019 for the purposes of the loss per
share calculation. The number of share options outstanding at
January 1, 2019 and the share options granted and lapsing during
the nine months ended September 30, 2019 have been restated to
reflect the 2019 share consolidation.
On September 20, 2019, Amryt registered FILSUVEZ® as the
trademark name for the Group’s lead development asset, AP101, in
the European Union. On February 18, 2020, Amryt also registered
this trademark name in the United States and is in the process of
registering the FILSUVEZ® trademark in other key jurisdictions.
On July 8, 2020, Amryt listed on the NASDAQ Global Select Market
under the symbol AMYT. The Company has not issued any new
securities in connection with this filing. The Ordinary
Shares will continue to trade on the AIM market of the London Stock
Exchange.
On August 11, 2020 announced that the Company gave Euronext
Dublin (“Euronext”) notice of its intention to cancel the admission
of the Company’s Ordinary Shares (‘Ordinary Shares”) to trading on
the Euronext Growth Market ("Cancellation"). The last day of
trading in Ordinary Shares on the Euronext Growth Market was
September 8, 2020. The Cancellation applies only to the Euronext
Growth Market and will have no effect on the Company’s American
Depositary Shares (“ADSs”) which trade on the NASDAQ Global Select
Market under the symbol AMYT or on Amryt’s Ordinary Shares trading
on the AIM market of the London Stock Exchange.
2. Accounting policies
Basis of preparation
The condensed consolidated interim financial statements of the
Group have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all of the information
required in annual financial statements in accordance with
International Financial Reporting Standards (‘‘IFRS’’) and should
be read in conjunction with the annual consolidated financial
statements for the year ended December 31, 2019. Selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the Group’s financial
position and performance since the last annual financial
statements. The accounting policies used in the preparation of the
interim financial information are the same as those used in the
Group’s audited financial statements for the year ended December
31, 2019 and those which are expected to be used in the financial
statements for the year ending December 31, 2020.
Results for the nine-month period ended September 30, 2020 are
not necessarily indicative of the results that may be expected for
the financial year ending December 31, 2020.
Basis of going concern
Having considered the Group’s current financial position and
cash flow projections, the Board of Directors believes that the
Group will be able to continue in operational existence for at
least the next 12 months from the date of approval of these
condensed consolidated interim financial statements and that it is
appropriate to continue to prepare the condensed consolidated
interim financial statements on a going concern basis.
A key consideration for the impact on going concern is the
acquisition of Aegerion, which was completed in September 2019.
This acquisition represents a significant step forward for Amryt
and has created value for Amryt with immediate effect post-deal
close through enhanced scale of the combined Group, which Amryt
believes has the potential to drive revenues and deliver
operational synergies through a combination of medical, commercial,
clinical, development and regulatory infrastructure. Additionally,
Amryt completed a US$60,000,000 fundraising as part of the
acquisition of Aegerion.
Since a novel strain of coronavirus (SARS-CoV-2) causing a
disease referred to as COVID-19 was first reported in December
2019, the disease has spread across the world, including countries
in which we have patients and in which we have planned or active
clinical trial sites. The outbreak and government measures
taken in response have had a significant impact, both direct and
indirect, on all businesses and commerce as supply chains have been
disrupted, facilities and production have been suspended and demand
for certain goods and services has spiked while demand for other
goods and services has fallen. As COVID-19 continues to
spread around the globe, Amryt may experience disruptions that
could affect its business, preclinical studies and clinical
trials.
Amryt provides therapeutic products to Homozygous Familial
Hypercholesterolemia (‘‘HoFH’’) and lipodystrophy patients globally
on a recurring basis. Once lomitapide (for the treatment of HoFH)
or metreleptin (for the treatment of lipodystrophy) is prescribed
by physicians, patients are typically on treatment over a long
period of time with repeat prescriptions for each patient. To date
the Group has seen minimal impact of the COVID-19 pandemic on the
business given the majority of revenues are recurring in nature and
the Group has a strong cash position and resources to support the
Group’s ability to continue as a going concern.
Basis of consolidation
The condensed consolidated interim financial statements comprise
the financial statements of the Group for the nine months ended
September 30, 2020. Subsidiaries are entities controlled by the
Company. Where the Company has control over an investee, it is
classified as a subsidiary. The Company controls an investee if all
three of the following elements are present: power over an
investee, exposure or rights to variable returns from its
involvement with the investee and the ability to use its power to
affect those variable returns. Control is reassessed whenever facts
and circumstances indicate that there may be a change in any of
these elements of control.
Subsidiaries are fully consolidated from the date that control
commences until the date that control ceases. Accounting policies
of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group. Intergroup
balances and any unrealized gains or losses, income or expenses
arising from intergroup transactions are eliminated in preparing
the consolidated financial statements.
Presentation of balances
The condensed consolidated interim financial statements are
presented in U.S. dollars (‘‘US$’’) which is the functional
currency of the Company and presentation currency of the Group.
The following table discloses the major exchange rates of those
currencies other than the functional currency of US$ that are
utilized by the Group:
|
Foreign currency units to 1 US$ |
|
€ |
|
£ |
|
CHF |
|
SEK |
|
NOK |
|
DKK |
| Average
three-month period to September 30, 2019 (unaudited) |
|
0.8898 |
|
|
0.7857 |
|
|
0.9950 |
|
|
9.3993 |
|
|
8.6944 |
|
|
6.6422 |
|
| Average
nine-month period to September 30, 2019 (unaudited) |
|
0.8992 |
|
|
0.8110 |
|
|
0.9855 |
|
|
9.5838 |
|
|
8.8586 |
|
|
6.7109 |
|
| At September
30, 2019 (unaudited) |
|
0.9140 |
|
|
0.8137 |
|
|
0.9910 |
|
|
9.7939 |
|
|
9.0757 |
|
|
6.8240 |
|
|
Foreign currency units to 1 US$ |
|
€ |
|
£ |
|
CHF |
|
SEK |
|
NOK |
|
DKK |
| Average period
to December 31, 2019 (audited) |
|
0.8932 |
|
|
0.7836 |
|
|
0.9938 |
|
|
9.4533 |
|
|
8.7976 |
|
|
6.6690 |
|
| At December
31, 2019 (audited) |
|
0.8929 |
|
|
0.7624 |
|
|
0.971 |
|
|
9.3282 |
|
|
8.8046 |
|
|
6.6698 |
|
|
Foreign currency units to 1 US$ |
|
€ |
|
£ |
|
CHF |
|
SEK |
|
NOK |
|
DKK |
| Average
three-month period to September 30, 2020 (unaudited) |
|
0.8905 |
|
|
0.7873 |
|
|
0.9508 |
|
|
9.4111 |
|
|
9.5480 |
|
|
6.6422 |
|
| Average
nine-month period to September 30, 2020 (unaudited) |
|
0.8562 |
|
|
0.7749 |
|
|
0.9203 |
|
|
8.8756 |
|
|
9.1384 |
|
|
6.3740 |
|
| At September
30, 2020 (unaudited) |
|
0.8543 |
|
|
0.7777 |
|
|
0.9220 |
|
|
9.0060 |
|
|
9.4528 |
|
|
6.3604 |
|
(€ = Euro; £ = Pounds Sterling, CHF = Swiss Franc, SEK = Swedish
Kroner, NOK = Norwegian Kroner, DKK = Danish Kroner)
Changes in accounting policies and
disclosures
In the current year, the Group has applied the amendments to
IFRS related to IFRS 3 and the definition of a business. These
amendments and interpretations do not have significant impact on
the disclosures or the amounts reported in these condensed
consolidated interim financial statements.
Critical accounting judgements and key sources of
estimation uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and amounts reported in the
financial statements and accompanying notes. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The significant estimates, assumptions or judgements, applied in
the condensed consolidated interim financial statements were the
same as those applied in the Group’s audited financial statements
for the year ended December 31, 2019 other than for those applied
in finalizing the acquisition accounting for the Aegerion
acquisition (see Note 5, Business combinations and asset
acquisitions).
Principal accounting policies
The condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies adopted in
the Group’s audited financial statements for the year ended
December 31, 2019.
3. Segment information
The Group is a global, commercial-stage biopharmaceutical
company dedicated to commercializing and developing novel
therapeutics to treat patients suffering from serious and
life-threatening rare diseases.
The Group currently operates as one business segment,
pharmaceuticals, and is focused on the development and
commercialization of two commercial products and two development
products. The Group derives its revenues primarily from one source,
the pharmaceutical sector with high unmet medical need.
The Group’s Chief Executive Officer, Joseph Wiley, is currently
the Group’s chief operating decision maker (‘‘CODM’’). The Group
does not operate any separate lines of business or separate
business entities with respect to its products. Accordingly, the
Group does not accumulate discrete financial information with
respect to separate service lines and does not have separate
reportable segments.
The following table summarizes total revenues from external
customers by product and by geographic region, based on the
location of the customer. Revenues represent the revenue from the
Group for the three and nine months ended September 30, 2020 and
2019. Revenue in the three and nine months ended September 30, 2020
include revenues from the acquired Aegerion Group and associated
products and regions following the acquisition of the Aegerion
Group that was completed on September 24, 2019.
| |
Three months ended September 30, 2020
(unaudited) |
| |
U.S. |
EMEA |
Other |
Total |
| |
US$’000 |
|
Metreleptin |
15,877 |
|
6,423 |
|
7,578 |
|
29,878 |
|
|
Lomitapide |
9,233 |
|
7,109 |
|
2,771 |
|
19,113 |
|
|
Other |
— |
|
201 |
|
134 |
|
335 |
|
| Total
revenue |
25,110 |
|
13,733 |
|
10,483 |
|
49,326 |
|
| |
Three months ended September 30, 2019
(unaudited) |
| |
U.S. |
EMEA |
Other |
Total |
| |
US$’000 |
|
Metreleptin |
1,036 |
|
694 |
|
35 |
|
1,765 |
|
|
Lomitapide |
1,319 |
|
5,143 |
|
243 |
|
6,705 |
|
|
Other |
— |
|
167 |
|
— |
|
167 |
|
| Total
revenue |
2,355 |
|
6,004 |
|
278 |
|
8,637 |
|
| |
Nine months ended September 30, 2020
(unaudited) |
| |
U.S. |
EMEA |
Other |
Total |
| |
US$’000 |
|
Metreleptin |
45,457 |
|
26,233 |
|
13,014 |
|
84,704 |
|
|
Lomitapide |
28,047 |
|
18,683 |
|
7,856 |
|
54,586 |
|
|
Other |
— |
|
573 |
|
222 |
|
795 |
|
| Total
revenue |
73,504 |
|
45,489 |
|
21,092 |
|
140,085 |
|
| |
Nine months ended September 30, 2019
(unaudited) |
| |
U.S. |
EMEA |
Other |
Total |
| |
US$’000 |
|
Metreleptin |
1,036 |
|
694 |
|
35 |
|
1,765 |
|
|
Lomitapide |
1,319 |
|
14,036 |
|
243 |
|
15,598 |
|
|
Other |
— |
|
465 |
|
— |
|
465 |
|
| Total
revenue |
2,355 |
|
15,195 |
|
278 |
|
17,828 |
|
Major Customers
For the three and nine months ended September 30, 2020, one
customer accounted for 51% and 52%, respectively, of the Group’s
net revenues and accounted for 37% of the Group’s September 30,
2020 accounts receivable balance. For the three and nine months
ended September 30, 2019, the Group generated over 51% and 61%,
respectively, of its lomitapide revenue in Italy, the Netherlands
and Greece. The largest lomitapide customer in the three and nine
months ended September 30, 2019 was a distributor in Italy.
4. Share based payments
Share Options and WarrantsOn July 10, 2019, the
shareholders of the Company approved a resolution to give authority
to the Company to undertake a consolidation of the existing
ordinary shares in the capital of the Company under which every 6
existing ordinary shares were consolidated into one ordinary
share.
Under the terms of the Company’s Employee Share Option Plan,
options to purchase 18,753,648 shares were outstanding at September
30, 2020. Under the terms of this plan, options are granted to
officers, consultants and employees of the Group at the discretion
of the Remuneration Committee. A total of 4,432,000 share options
were granted to non-executive directors and employees in the
nine-month period ended September 30, 2020. For the year ended
December 31, 2019, a total of 11,330,641 share options were granted
to directors and employees.
Outstanding warrants at September 30, 2020 consisted of
8,966,520 zero cost warrants (December 31, 2019: 17,196,273) with
no expiration date that were issued to Aegerion creditors in
connection with the acquisition of Aegerion. The remaining warrants
consisting of 345,542 warrants (December 31, 2019: 345,542) were
issued in connection with the admission to the AIM in 2016.
The number and weighted average exercise price (in Sterling
pence) of share options and warrants per ordinary share is as
follows:
| |
Share Options |
|
Warrants |
| |
Units |
|
Weighted average exercise price (Sterling
pence) |
|
Units |
|
Weighted average exercise price (Sterling
pence) |
|
Balance at January 1, 2019 (restated for 6:1 share
consolidation) |
3,250,855 |
|
|
115.20p |
|
3,818,325 |
|
|
144.00p |
| Granted |
11,330,641 |
|
|
117.01p |
|
18,841,378 |
|
|
— |
| Lapsed |
(99,776 |
) |
|
197.66p |
|
(3,472,783 |
) |
|
144.00p |
|
Exercised |
— |
|
|
— |
|
(1,645,105 |
) |
|
— |
|
Outstanding at December 31, 2019 (audited) |
14,481,720 |
|
|
116.00p |
|
17,541,815 |
|
|
0.03p |
|
Exercisable at December 31, 2019 (audited) |
2,468,310 |
|
|
109.08p |
|
17,541,815 |
|
|
0.03p |
| |
|
|
|
|
|
|
|
| Balance at
January 1, 2020 |
14,481,720 |
|
|
116.00p |
|
17,541,815 |
|
|
0.03p |
| Granted |
4,432,000 |
|
|
144.76p |
|
— |
|
|
— |
|
| Lapsed |
(87,119 |
) |
|
113.42p |
|
— |
|
|
— |
|
| Exercised |
(72,953 |
) |
|
120.72p |
|
(8,229,753 |
) |
|
— |
|
|
Outstanding at September 30, 2020 (unaudited) |
18,753,648 |
|
|
122.79p |
|
9,312,062 |
|
|
0.05p |
|
Exercisable at September 30, 2020 (unaudited) |
3,025,547 |
|
|
107.49p |
|
9,312,062 |
|
|
0.05p |
Fair value is estimated at the date of grant using the
Black-Scholes pricing model, taking into account the terms and
conditions attached to the grant. The following are the inputs to
the model for the equity instruments granted during the period:
| |
September 30, 2020 Options
Inputs(unaudited) |
|
September 30, 2020 Warrant
Inputs(unaudited) |
|
December 31, 2019 Options
Inputs(audited) |
|
December 31, 2019 Warrant
Inputs(audited) |
| Days to
Expiration |
2,555 |
|
|
— |
|
|
2,555 |
|
|
— |
|
|
Volatility |
33% - 37% |
|
— |
|
|
27% - 48% |
|
|
— |
|
| Risk free
interest rate |
0.35% - 0.46% |
|
— |
|
|
0.38% - 0.83% |
|
|
— |
|
| Share price at
grant |
123.5p – 178.94p |
|
— |
|
|
75.84p – 121.5p |
|
|
— |
|
In the nine months ended September 30, 2020, a total of
4,432,000 share options exercisable at a weighted average price of
£1.4476 were granted. The fair value of share options granted in
the nine months ended September 30, 2020 was
£6,415,586/US$8,230,000. The share options outstanding as at
September 30, 2020 have a weighted remaining contractual life of
5.71 years with exercise prices ranging from £0.76 to £1.79.
The 2016 warrants outstanding as at September 30, 2020 have a
weighted remaining contractual life of 0.55 years with an exercise
price of £1.44.
Restricted Share UnitsUnder the terms of the
Company’s Employee Share Option Plan, restricted share units
(“RSUs”) to purchase 1,556,960 shares were outstanding at September
30, 2020. Under the terms of this plan, RSUs are granted to
officers, consultants and employees of the Group at the discretion
of the Remuneration Committee. A total of 1,556,960 RSUs were
granted to employees in the nine-month period ended September 30,
2020. For the year ended December 31, 2019, no RSUs were granted to
employees. The fair value of the RSUs is based on the share price
at the date of grant, with the expense spread over the vesting
period. The fair value of RSUs granted in the nine months ended
September 30, 2020 was US$2,742,000 and have a weighted remaining
contractual life of 2.86 years. The following table summarises the
RSU activity for the period:
| |
RSUs |
| |
Units |
|
Weighted average fair value (US$) |
|
Balance at January 1, 2020 |
— |
|
|
— |
| Granted |
1,556,960 |
|
|
$2.27 |
| Lapsed |
— |
|
|
— |
|
Exercised |
— |
|
|
— |
|
Outstanding at September 30, 2020 |
1,556,960 |
|
|
$2.27 |
The total share based payment expense charged to the
Consolidated Statement of Comprehensive Loss during the three and
nine-month periods are as follows:
| |
Three months ended September
30, |
Nine months ended September
30, |
| |
2020 (unaudited) |
2019 (unaudited) |
2020 (unaudited) |
2019 (unaudited) |
| |
US$’000 |
| Share option
expense |
1,307 |
|
97 |
|
2,910 |
|
319 |
|
| RSU
expense |
226 |
|
— |
|
226 |
|
— |
|
| Total
share option expense |
1,533 |
|
97 |
|
3,136 |
|
319 |
|
5. Business combinations and asset
acquisitions
Acquisition of Aegerion Pharmaceuticals (“Aegerion
acquisition”)
On May 20, 2019, Amryt entered into a Restructuring Support
Agreement (as subsequently amended on June 12, 2019) and Plan
Funding Agreement pursuant to which, among other matters, Amryt
agreed to the acquisition of Aegerion, a former wholly-owned
subsidiary of Novelion. On May 20, 2019, Aegerion and its U.S.
subsidiary, Aegerion Pharmaceuticals Holdings, Inc., filed
voluntary petitions under Chapter 11 of Title 11 of the U.S. Code
in the Bankruptcy Court. On September 24, 2019, Amryt completed the
acquisition of Aegerion. Amryt acquired Aegerion upon its emergence
from bankruptcy in an exchange for ordinary shares and zero cost
warrants in Amryt. Amryt issued 85,092,423 effective shares at
US$1.793 per share, which is made up of 77,027,423 ordinary shares
and 8,065,000 zero cost warrants, to acquire Aegerion for a value
of US$152,615,000.
The acquired goodwill is attributable principally to the profit
generating potential of the businesses, the assembled workforce and
benefits arising from embedded infrastructure, that are expected to
be achieved from integrating the acquired businesses into the
Group’s existing business. No amount of goodwill is expected to be
deductible for tax purposes.
IFRS 3 Business combinations requires the assignment of fair
values to identifiable assets and liabilities acquired to be
completed within 12 months of the acquisition date. The initial
assignment of fair values was included in the consolidated
financial statement for the year ending December 31, 2019 and
subsequent consolidated interim financial statements. The Group
finalised the fair values of the assets and liabilities of Aegerion
in September 2020. The adjustments made in finalising fair values
primarily relate to the measurement of intangible assets separately
from goodwill, valuation of inventory and associated deferred tax
liabilities. The acquired goodwill is attributable principally to
the profit generating potential of the businesses, the assembled
workforce and benefits arising from embedded infrastructure that
are expected to be achieved from integrating the acquired
businesses into the Group’s existing business. No amount of
goodwill is expected to be deductible for tax purposes.
| |
As at September 24, 2019 |
| |
As previously reported in Dec 31, 2019 financial
statements |
|
Adjustments* |
|
|
Fair value |
| |
US$’000 |
|
Assets |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
| Property, plant
and equipment |
276 |
|
— |
|
|
276 |
| Right of use
assets |
924 |
|
— |
|
|
924 |
| Intangible
Assets |
308,374 |
|
(9,000 |
) |
|
299,374 |
| Other
assets |
2,334 |
|
(433 |
) |
|
1,901 |
| Total
non-current assets |
311,908 |
|
(9,433 |
) |
|
302,475 |
| |
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
|
| Cash and cash
equivalents |
24,985 |
|
— |
|
|
24,985 |
| Trade and other
receivables |
23,259 |
|
— |
|
|
23,259 |
| Inventory |
45,959 |
|
11,482 |
|
|
57,441 |
| Prepaid
expenses and other assets |
2,469 |
|
(881 |
) |
|
1,588 |
| Total
current assets |
96,672 |
|
10,601 |
|
|
107,273 |
| Total
assets |
408,580 |
|
1,168 |
|
|
409,748 |
| |
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
|
| Accounts
payable |
5,137 |
|
(1,186 |
) |
|
3,951 |
| Accrued
liabilities |
64,088 |
|
2,922 |
|
|
67,010 |
| Lease
liabilities – current |
384 |
|
— |
|
|
384 |
| Provision for
legal settlements – current |
14,916 |
|
257 |
|
|
15,173 |
| Total
current liabilities |
84,525 |
|
1,993 |
|
|
86,518 |
| |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
| Lease
liabilities - long term |
538 |
|
— |
|
|
538 |
| Long term
debt |
54,469 |
|
— |
|
|
54,469 |
| Convertible
notes debt and equity components - long term |
125,000 |
|
— |
|
|
125,000 |
| Provision for
legal settlements - long term |
7,821 |
|
— |
|
|
7,821 |
| Deferred tax
liability |
14,425 |
|
(7,552 |
) |
|
6,873 |
| Total
non-current liabilities |
202,253 |
|
(7,552 |
) |
|
194,701 |
| Total
liabilities |
286,778 |
|
(5,559 |
) |
|
281,219 |
| Total
identifiable net assets at fair value |
121,802 |
|
6,727 |
|
|
128,529 |
| Goodwill
arising on acquisition |
30,813 |
|
(6,727 |
) |
|
24,086 |
|
Consideration |
152,615 |
|
— |
|
|
152,615 |
| |
|
|
|
|
|
|
|
Consideration |
|
|
|
|
|
|
| Issue of fully
paid up ordinary shares and zero cost warrants |
152,615 |
|
— |
|
|
152,615 |
| Total
consideration |
152,615 |
|
— |
|
|
152,615 |
*Adjustments relate to finalization of fair values following
completion of the fair value assignment to identifiable assets and
liabilities acquired. See Note 15, Restatement of prior year
comparatives, for more details on the adjustments.
Contingent Value Rights
Related to the transaction, Amryt issued Contingent Value Rights
(‘‘CVRs’’) pursuant to which up to US$85,000,000 may become payable
to Amryt’s shareholders and option holders, who were on the
register prior to the completion of the acquisition on September
20, 2019, if certain approval and revenue milestones are met in
relation FILSUVEZ®, Amryt’s lead product candidate. If any such
milestone is achieved, Amryt may elect to pay the holders of CVRs
by the issue of Amryt shares or loan notes. If Amryt elects to
issue Loan Notes to holders of CVRs, it will settle such loan notes
in cash 120 days after their issue. If none of the milestones are
achieved, scheme shareholders and option holders will not receive
any additional consideration under the terms of the CVRs. In these
circumstances, the value of each CVR would be zero.
The terms of the CVRs are as follows:
- The total CVR
payable is up to US$85,000,000
- This is divided into
three milestones which are related to the success of FILSUVEZ® (the
Group’s lead development asset, currently in Phase 3 clinical
trials)
- FDA approval
- US$35,000,000 upon
FDA approval
- 100% of the amount
due if approval is obtained before December 31, 2021, with a
sliding scale on a linear basis to zero if before July 1, 2022
- EMA approval
- US$15,000,000 upon
EMA approval
- 100% of the amount
due if approval is obtained before December 31, 2021, with a
sliding scale on a linear basis to zero if before July 1, 2022
- Revenue targets
- US$35,000,000 upon
FILSUVEZ® revenues exceeding US$75,000,000 in any 12-month period
prior to June 30, 2024
- Payment can, at the
Board’s discretion, be in the form of either:
- 120-day loan notes (effectively cash), or
- Shares valued using the 30 day / 45-day VWAP.
The CVRs were contingent on the successful completion of the
acquisition and, accordingly, have been based on fair value as at
September 24, 2019. On consolidation, given that CVRs were issued
to legacy Amryt shareholders in their capacity as owners of the
identified acquirer as opposed to the seller in the transaction,
management concluded that the most appropriate classification would
be to recognize the CVR as a distribution on consolidation instead
of goodwill.
Measurement of CVRs
As at September 30, 2020, the carrying value of the CVRs was
US$53,911,000 (December 31, 2019: US$49,413,000). The value of the
potential payout was calculated using the probability-weighted
expected returns method. Using this method, the potential payment
amounts were multiplied by the probability of achievement and
discounted to present value. The probability adjusted present
values took into account published orphan drug research data and
statistics which were adjusted by management to reflect the
specific circumstances applicable to the type of product acquired
in the Amryt GmbH transaction. Discount rates of 10% and 16.5%
(December 31, 2019: 10% and 16.5%), as applicable, were used in the
calculation of the present value of the estimated contractual cash
flows for the nine months ended September 30, 2020. Management was
required to make certain estimates and assumptions in relation to
revenue forecasts, timing of revenues and probability of
achievement of commercialization of FILSUVEZ®. However, management
notes that, due to issues outside their control (i.e. regulatory
requirements and the commercial success of the product), the timing
of when such revenue targets may occur may change. Such changes may
have a material impact on the expected cash flows of the CVRs.
Amryt reviews the expected cash flows on a regular basis as the
discount on initial recognition is being unwound as financing
expenses in the Consolidated Statement of Comprehensive Loss over
the life of the obligation. It is reviewed on a quarterly basis and
the appropriate finance charge is booked on a quarterly basis. The
Group received positive top-line data from the Phase 3 trial of
FILSUVEZ® in Epidermolysis Bullosa (‘‘EB’’) in September, 2020. The
Group expects this to be followed by applications for approval from
the FDA and the EMA.
The total non-cash finance charge recognized in the Condensed
Consolidated Statement of Comprehensive Loss for the three and nine
months ended September 30, 2020 is US$1,557,000 and US$4,498,000 ,
respectively (September 30, 2019: US$nil and US$nil,
respectively).
Acquisition of Amryt AG (previously
‘‘Birken’’)
Amryt DAC signed a conditional share purchase agreement to
acquire Amryt AG on October 16, 2015 (‘‘Amryt AG SPA’’). The Amryt
AG SPA was completed on April 18, 2016 with Amryt DAC acquiring the
entire issued share capital of Amryt GmbH. The consideration
included contingent consideration comprising milestone payments and
sales royalties as follows:
- Milestone payments of:
- €10,000,000 on receipt of first marketing approval by the EMA
of Episalvan, paid on the completion date (April 18, 2016);
- Either (i) €5,000,000 once net ex-factory sales of Episalvan
have been at least €100,000 or (ii) if no commercial sales are made
within 24 months of EMA first marketing approval (being January 14,
2016), €2,000,000 24 months after receipt of such approval, which
was paid in January 2018, and €3,000,000 following the first
commercial sale;
- €10,000,000 on receipt of marketing approval by the EMA or FDA
of a pharmaceutical product containing Betulin as its API for the
treatment of EB;
- €10,000,000 once net ex-factory sales/net revenue in any
calendar year exceed €50,000,000;
- €15,000,000 once net ex-factory sales/ net revenue in any
calendar year exceed €100,000,000;
- Cash consideration of €150,000, due and paid on the completion
date (April 18, 2016); and
- Royalties of 9% on sales of Episalvan products for 10 years
from first commercial sale;
Fair Value Measurement of Contingent
Consideration
As of September 30, 2020, the fair value of the contingent
consideration was estimated to be US$63,880,000 (December 31, 2019:
US$53,048,000). The fair value of the royalty payments was
determined using probability weighted revenue forecasts and the
fair value of the milestone payments was determined using
probability adjusted present values (see Note 14, Fair value
measurement and financial risk management, for fair value hierarchy
applied). The probability adjusted present values took into account
published orphan drug research data and statistics which were
adjusted by management to reflect the specific circumstances
applicable to the type of product acquired in the Amryt GmbH
transaction. A discount rate of 24.4% (December 31, 2019: 24.4%)
was used in the calculation of the fair value of the contingent
consideration for the nine months ended September 30, 2020.
Management was required to make certain estimates and assumptions
in relation to revenue forecasts, timing of revenues and
probability of achievement of commercialization of FILSUVEZ®.
However, management noted that due to issues outside their control,
the timing of when such revenue targets may occur may change. Such
changes may have a material impact on the assessment of the fair
value of the contingent consideration.
In January 2019, the Group received the results of an unblinded
interim efficacy analysis for the Phase 3 trial of FILSUVEZ® in EB.
This analysis was conducted by an independent data safety
monitoring committee and 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 be able to achieve 80% statistical
power. In April 2020, given that the EASE study was already close
to full enrollment, the Group announced that it had taken advice
from an independent expert and concluded that the statistical
impact of further patient recruitment would most likely be
negligible. Amryt therefore decided to close the EASE study
to further enrollment. The Group received positive top line results
from this trial in September, 2020, and the Group expects this to
be followed by applications for approval from the FDA and the EMA.
These factors have resulted in a change to the probability weighted
revenue forecasts and the probability of the adjusted present
values which are used in the calculation of the contingent
consideration balance and impact the amount being unwound to the
consolidated statement of comprehensive loss.
Amryt reviews the contingent consideration on a regular basis as
the probability adjusted fair values are being unwound as financing
expenses in the Consolidated Statement of Comprehensive Loss over
the life of the obligation. The finance charge is being unwound as
a financing expense in the Consolidated Statement of Comprehensive
Loss on a quarterly basis.
The total non-cash finance charge recognized in the Consolidated
Statement of Comprehensive Loss for the three and nine months ended
September 30, 2020 is US$2,126,000 and US$8,150,000, respectively
(September 30, 2019: US$1,448,000 and US$5,299,000,
respectively).
6. Loss per share - basic and diluted
The weighted average number of shares in the loss per share
(‘‘LPS’’) calculation, reflects the weighted average total actual
shares of Amryt Pharma plc in issue at September 30, 2020, as
adjusted (see below).
Issued share capital - ordinary shares of £0.06
each
| |
Number of shares |
|
Weighted average shares |
| September 30,
2020 (unaudited) |
162,728,640 |
|
|
155,776,507 |
|
| September 30,
2019 (unaudited) |
157,718,438 |
|
|
48,126,074 |
|
The calculation of loss per share is based on the following:
| |
Three months ended September
30, |
Nine months ended September
30, |
| |
2020 (unaudited) |
2019 (unaudited) |
2020 (unaudited) |
2019 (unaudited) |
| Loss after tax
attributable to equity holders of the Company (US$’000) |
(10,471 |
) |
(15,559 |
) |
(57,537 |
) |
(33,277 |
) |
| Weighted average
number of ordinary shares in issue |
158,303,972 |
|
55,683,096 |
|
155,776,507 |
|
48,126,074 |
|
| Fully diluted
average number of ordinary shares in issue |
158,303,972 |
|
55,683,096 |
|
155,776,507 |
|
48,126,074 |
|
| Basic and diluted
loss per share (US$) |
(0.07 |
) |
(0.28 |
) |
(0.37 |
) |
(0.69 |
) |
The basic and diluted loss per share for the three and
nine-month period ended September 30, 2020 of US$0.07 and US$0.37,
respectively (September 30, 2019: US$0.28 and US$0.69,
respectively) was calculated using the post consolidation number of
ordinary shares in issue.
Where a loss has occurred, basic and diluted LPS
are the same because the outstanding share options and warrants are
anti-dilutive. Accordingly, diluted LPS equals the basic LPS. The
share options and warrants outstanding as at September 30, 2020
totalled 28,065,710 (September 30, 2019: 16,444,054) and are
potentially dilutive.
7. Intangible assets and goodwill
The following table summarizes the Group’s intangible assets and
goodwill:
| |
Developed technology - metreleptin |
|
Developed technology - lomitapide |
|
In process R&D |
|
Other intangible assets |
|
Total intangible assets |
|
Goodwill |
| |
US$’000 |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
| At January 1,
2019(audited) |
— |
|
|
— |
|
|
60,091 |
|
|
258 |
|
|
60,349 |
|
|
— |
|
| Additions |
— |
|
|
— |
|
|
— |
|
|
74 |
|
|
74 |
|
|
— |
|
| Acquired
assets as restated (see note 15) |
176,000 |
|
|
123,000 |
|
|
— |
|
|
374 |
|
|
299,374 |
|
|
24,086 |
|
| Impairment
charge |
— |
|
|
— |
|
|
(4,670 |
) |
|
— |
|
|
(4,670 |
) |
|
— |
|
| Foreign
exchange movement |
— |
|
|
— |
|
|
(1,160 |
) |
|
(5 |
) |
|
(1,165 |
) |
|
— |
|
| At December
31, 2019 as restated (see note 15) |
176,000 |
|
|
123,000 |
|
|
54,261 |
|
|
701 |
|
|
353,962 |
|
|
24,086 |
|
| Additions |
— |
|
|
— |
|
|
— |
|
|
298 |
|
|
298 |
|
|
— |
|
| Disposals |
— |
|
|
— |
|
|
— |
|
|
(246 |
) |
|
(246 |
) |
|
— |
|
| Foreign
exchange movement |
— |
|
|
— |
|
|
2,456 |
|
|
36 |
|
|
2,492 |
|
|
— |
|
| At September
30, 2020 (unaudited) |
176,000 |
|
|
123,000 |
|
|
56,717 |
|
|
789 |
|
|
356,506 |
|
|
24,086 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization |
|
|
|
|
|
|
|
|
|
|
| At January 1,
2019(audited) |
— |
|
|
— |
|
|
— |
|
|
52 |
|
|
52 |
|
|
— |
|
| Amortization
charge as restated (see note 15) |
7,314 |
|
|
4,143 |
|
|
— |
|
|
126 |
|
|
11,583 |
|
|
— |
|
| Foreign
exchange movement |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| At December
31, 2019 as restated (see note 15) |
7,314 |
|
|
4,143 |
|
|
— |
|
|
178 |
|
|
11,635 |
|
|
— |
|
| Amortization
charge |
20,571 |
|
|
11,653 |
|
|
— |
|
|
176 |
|
|
32,400 |
|
|
— |
|
| Amortization
charge on disposals |
— |
|
|
— |
|
|
— |
|
|
(246 |
) |
|
(246 |
) |
|
|
|
| Foreign
exchange movement |
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
|
— |
|
| At September
30, 2020 (unaudited) |
27,885 |
|
|
15,796 |
|
|
— |
|
|
121 |
|
|
43,802 |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net
book value |
|
|
|
|
|
|
|
|
|
|
|
| At December
31, 2019 as restated (see note 15) |
168,686 |
|
|
118,857 |
|
|
54,261 |
|
|
523 |
|
|
342,327 |
|
|
24,086 |
|
| At September
30, 2020 (unaudited) |
148,115 |
|
|
107,204 |
|
|
56,717 |
|
|
668 |
|
|
312,704 |
|
|
24,086 |
|
Developed technology on commercially
marketed products
In connection with the acquisition of Aegerion
in September 2019, the Group acquired developed technology,
metreleptin and lomitapide. These intangible assets are amortized
over their estimated useful lives and the remaining useful lives
for metreleptin and lomitapide are approximately 5.4 and 6.9 years,
respectively, as of September 30, 2020.
In-process R&D
As a result of the acquisition of Amryt GmbH, in
2016, the Group recognized in-process R&D costs of
US$54,268,000 which is related to the Group’s lead development
asset, FILSUVEZ®.
Goodwill
During 2019, the Group completed the acquisition of Aegerion.
The acquisition resulted in aggregate goodwill of US$24,086,000, as
restated.
The Group reviews events or changes in circumstances that may
indicate a triggering event for impairment. As of September 30,
2020 the Group didn’t identify any events or changes in
circumstances causing any impairment triggers. In applying its
judgement in reviewing potential events or changes in circumstances
resulting in impairment triggers, amongst other considerations,
Management considered the impact of COVID-19 and noted that the
Group has seen little impact on the business to date. As such there
was no impairment charge recorded during the three and nine months
ended September 30, 2020.
8. Trade and other receivables
| |
As at |
| |
September 30,
2020(unaudited) |
|
December 31,
2019restated(see note
15) |
| |
US$’000 |
| Trade
receivables |
32,403 |
|
|
28,607 |
|
| Accrued income
and other debtors |
8,988 |
|
|
5,493 |
|
| VAT
recoverable |
804 |
|
|
1,400 |
|
| Trade
and other receivables |
42,195 |
|
|
35,500 |
|
9. Cash and cash equivalents
| |
As at |
| |
September 30,
2020(unaudited) |
|
December 31, 2019(audited) |
| |
US$’000 |
| Cash at bank
available on demand |
74,590 |
|
|
65,197 |
|
| Restricted
cash |
792 |
|
|
2,032 |
|
| Total
cash and cash equivalents |
75,382 |
|
|
67,229 |
|
Cash and cash equivalents include cash at bank available on
demand and restricted cash.
At September 30, 2020 and December 31, 2019, there was
US$792,000 and US$2,032,000 of restricted cash, respectively. The
balance at September 30, 2020 includes a deposit on a company
credit card facility for an amount of US$151,000. Of the
US$2,032,000 held in restricted cash at December 31, 2019,
$1,219,000 was in an escrow account, which was set-up in accordance
with Aegerion’s bankruptcy plan as approved by the U.S. Bankruptcy
Court, and it was fully utilized to pay the costs associated with
the bankruptcy process. Additionally, there was US$641,000
held by a third-party distributor at September 30, 2020 (December
31, 2019: US$813,000).
10. Share capital and reserves
Details of issued ordinary shares with a nominal value of
Sterling 6 pence (2019: 1 pence) each are in the table below.
|
Date |
Number of ordinary shares |
Total Share Capital US$’000 |
Total Share Premium US$’000 |
| At
September 30, 2020 (unaudited) |
167,593,296 |
|
12,548 |
|
16,553 |
|
| At
December 31, 2019 (audited) |
159,363,543 |
|
11,918 |
|
2,422 |
|
The number of ordinary shares issued at September 30, 2020 and
December 31, 2019 includes treasury shares of 4,864,656.
Share CapitalShare capital represents the
cumulative par value arising upon issue of ordinary shares of
Sterling 6 pence each.The ordinary shares have the right to receive
notice of, attend and vote at general meetings and participate in
the profits of the Company.
Share PremiumShare premium represents the
consideration that has been received in excess of the nominal value
on issue of share capital net of issue costs and transfers to
distributable reserves.
Warrant reserveThe warrant reserve represents
zero cost warrants issued as part of the equity raise on September
24, 2019 net of issue costs apportioned to warrants issued and zero
cost additional warrants issued to certain shareholders on November
14, 2019. Each warrant entitles the holder to subscribe for one
ordinary share at zero cost. On July 15, 2020 and September 22,
2020, the Company issued 4,000,000 and 4,229,753 ordinary shares in
consideration for certain warrants.
Treasury SharesOn November 14, 2019, the
Company repurchased a combined 4,864,656 ordinary shares from
certain shareholders. In exchange for the ordinary shares, these
shareholders were issued an equivalent number of zero cost
warrants. These ordinary shares are now held as treasury
shares.
Share based payment reserveShare based payment
reserve relates to the charge for share based payments in
accordance with IFRS 2.
Merger reserve
The merger reserve was created on the
acquisition of Amryt DAC by Amryt Pharma plc in April 2016.
Ordinary shares in Amryt Pharma plc were issued to acquire the
entire issued share capital of Amryt DAC. Under section 612 of the
UK Companies Act 2006, the premium on these shares has been
included in a merger reserve.
Reverse acquisition reserveThe reverse
acquisition reserve arose during the period ended December 31, 2016
in respect of the reverse acquisition of Amryt Pharma plc by Amryt
DAC. Since the shareholders of Amryt DAC became the majority
shareholders of the enlarged Group, the acquisition is accounted
for as though there is a continuation of Amryt DAC’s financial
statements. The reverse acquisition reserve is created to maintain
the equity structure of Amryt Pharma plc in compliance with UK
company law.
Equity component of convertible notesThe equity
component of convertible notes represents the equity component of
the US$125,000,000 convertible debt, that was issued on September
24, 2019, and is measured by determining the residual of the fair
value of the instrument less the estimated fair value of the
liability component. The equity component is recognized in equity
and is not subsequently remeasured.
Other distributable reservesOther distributable
reserves comprise the following:
- Distribution of the share premium amount on November 6, 2019 of
US$268,505,000.
- A deemed distribution of US$47,902,000 arising from the
issuance of CVRs.
- A deemed distribution of US$2,969,000 arising from the scheme
of arrangement in September 2019 whereby Amryt Pharma plc, which
was incorporated in July 2019, became a 100% shareholder of Amryt
Pharma Holdings Limited (formerly named Amryt Pharma plc) (the
‘‘Acquisition of subsidiary without a change of control’’).
Currency translation reserveThe currency
translation reserve arises on the retranslation of non-U.S, dollar
denominated foreign subsidiaries.
Accumulated deficitAccumulated deficit
represents losses accumulated in previous periods and the current
year.
11. Long term loan
| |
As at |
|
|
September 30,
2020(unaudited) |
|
December 31, 2019(audited) |
|
|
US$’000 |
| Long
term loan |
86,603 |
|
|
82,456 |
|
|
Unamortized debt issuance costs |
(768 |
) |
|
(846 |
) |
|
Long term loan |
85,835 |
|
|
81,610 |
|
As part of the acquisition of Aegerion on September 24, 2019,
Aegerion entered into a new U.S. dollar denominated US$81,021,000
secured term loan debt facility (‘‘Term Loan’’) with various
lenders. The Term Loan is made up of a US$54,469,000 loan that was
in place prior to the acquisition which was refinanced as part of
the acquisition and a US$26,552,000 additional loan that was drawn
down on September 24, 2019. The Term Loan has a five-year term from
the date of the draw down, September 24, 2019 and matures on
September 24, 2024. Under the Term Loan, interest will be payable
at the option of the Group at the rate of 11% per annum paid in
cash on a quarterly basis or at a rate of 6.5% paid in cash plus
6.5% paid in kind that will be paid when the principal is repaid,
which rolls up and is included in the principal balance
outstanding, on a quarterly basis. The Term Loan may be prepaid, in
whole or in part, by Aegerion at any time subject to payment of an
exit fee, which depending on the stage of the loan term, ranges
from 5.00% to 0.00% of the principal then outstanding on the Term
Loan.
The Term Loan is guaranteed by Amryt and certain subsidiaries of
the Group. In connection with the loan agreement, fixed and
floating charges have been placed on property and undertakings of
Amryt and certain subsidiaries of the Group.
The Term Loan agreement includes affirmative and negative
covenants, including prohibitions on the incurrence of additional
indebtedness, granting of liens, certain asset dispositions,
investments and restricted payments, in each case, subject to
certain exceptions set forth in the Loan Agreement. The Term Loan
agreement also includes customary events of default for a
transaction of this type, and includes (i) a cross-default to the
occurrence of any event of default under material indebtedness of
Aegerion and certain subsidiaries of the Group and Amryt, including
the convertible notes, and (ii) Amryt or any of its subsidiaries
being subject to bankruptcy or other insolvency proceedings. Upon
the occurrence of an event of default, the lenders may declare all
of the outstanding Term Loan and other obligations under the Term
Loan agreement to be immediately due and payable and exercise all
rights and remedies available to the lenders under the Term Loan
agreement and related documentation. There have been no events of
default or breaches of the covenants occurring for the nine months
ended September 30, 2020 and for year ended December 31, 2019.
12. Convertible notes
| |
As at |
| |
September 30,
2020(unaudited) |
|
December 31, 2019(audited) |
| |
US$’000 |
| Issuance of
convertible notes |
125,000 |
|
|
125,000 |
|
| Amount classified
as equity |
(29,210 |
) |
|
(29,210 |
) |
| Accreted
interest |
4,196 |
|
|
1,066 |
|
| Total
convertible notes |
99,986 |
|
|
96,856 |
|
As part of the acquisition, Aegerion issued convertible notes
with an aggregate principal amount of US$125,000,000 to Aegerion
creditors.
The convertible notes are senior unsecured obligations and bear
interest at a rate of 5.0% per year, payable semi-annually in
arrears on April 1 and October 1 of each year, beginning on April
1, 2020. The convertible notes will mature on April 1, 2025, unless
earlier repurchased or converted.
The convertible notes are convertible into Amryt’s ordinary
shares at a conversion rate of 386.75 ordinary shares per US$1,000
principal amount of the convertible notes. If the holders elect to
convert the convertible notes, Aegerion can settle the conversion
of the convertible notes through payment or delivery of cash,
common shares, or a combination of cash and common shares, at its
discretion. As a result of the conversion feature in the
convertible notes, the convertible notes were assessed to have both
a debt and an equity component. The two components were assessed
separately and classified as a financial liability and equity
instrument. The financial liability component was measured at fair
value based on the discounted cash flows expected over the expected
term of the notes using a discount rate based on a market interest
rate that a similar debt instrument without a conversion feature
would be subject to. Refer to Note 10, Share capital and reserves,
for further details on the equity component of the convertible
notes.
From September 24, 2019 until the close of business on the
second scheduled trading day immediately preceding the maturity
date, holders may convert all or any portion of their convertible
notes, in multiples of US$1,000 principal amount, at the option of
the holder.
The indenture does not contain any financial covenants and does
not restrict the Group’s ability to repurchase securities, pay
dividends or make restricted payments in the event of a transaction
that substantially increases the Group’s level of indebtedness in
certain circumstances.
The indenture contains customary terms and covenants and events
of default. If an event of default (other than certain events of
bankruptcy, insolvency or reorganization involving Aegerion, Amryt
and certain subsidiaries of the Group) occurs and is continuing,
the trustee by notice to Aegerion, or the holders of at least 25%
in principal amount of the outstanding convertible notes by written
notice to Aegerion and the trustee, may declare 100% of the
principal of and accrued and unpaid interest, if any, on all of the
convertible notes to be due and payable. Upon such a declaration of
acceleration, such principal and accrued and unpaid interest, if
any, will be due and payable immediately. Upon the occurrence of
certain events of bankruptcy, insolvency or reorganization
involving Aegerion, 100% of the principal and accrued and unpaid
interest, if any, on the convertible notes will become due and
payable automatically. Notwithstanding the foregoing, the indenture
provides that, upon Aegerion’s election, and for up to 180 days,
the sole remedy for an event of default relating to certain
failures by Aegerion to comply with certain reporting covenants in
the indenture consists exclusively of the right to receive
additional interest on the convertible notes. There have been no
events of default or breaches of the covenants occurring for the
nine months ended September 30, 2020 and for year ended December
31, 2019.
13. Provisions and other liabilities
| |
As at |
| |
September 30,
2020(unaudited) |
|
December 31,
2019restated(see note
15) |
| |
US$’000 |
|
Non-current liabilities |
|
|
|
|
|
| Provisions and
other liabilities |
— |
|
|
3,910 |
|
| Leases due
greater than 1 year |
4,657 |
|
|
1,053 |
|
| |
4,657 |
|
|
4,963 |
|
| Current
liabilities |
|
|
|
|
|
| Provisions and
other liabilities |
13,887 |
|
|
23,304 |
|
| Leases due less
than 1 year |
822 |
|
|
571 |
|
| |
14,709 |
|
|
23,875 |
|
| Total
provisions and other liabilities |
19,366 |
|
|
28,838 |
|
Legal matters
Prior to the acquisition of Aegerion by Amryt, Aegerion entered
into settlement agreements with governmental entities including the
Department of Justice (‘‘DOJ’’) and the FDA in connection with
JUXTAPID investigations. The settlement agreements require Aegerion
to pay specified fines and engage in regulatory compliance efforts.
The settlements that remain due as a current liability and a
non-current liability is US$7,887,000 and US$nil, respectively, as
of September 30, 2020 (December 31, 2019: US$15,547,000 and
US$3,910,000, respectively).
Other legal matters
The Group recognizes a liability for legal contingencies when it
believes that it is both probable that a liability has been
incurred and that it can reasonably estimate the amount of the
loss. The Group reviews these accruals and adjusts them to reflect
ongoing negotiations, settlements, rulings, advice of legal counsel
and other relevant information. To the extent new information is
obtained and the Group’s views on the probable outcomes of claims,
suits, assessments, investigations or legal proceedings change,
changes in the Group’s liability accrual would be recorded in the
period in which such determination is made. At September 30, 2020
and December 31, 2019, the Group had recognized liabilities of
US$6,000,000 and US$7,757,000, respectively, in relation to ongoing
legal matters.
14. Fair value measurement and financial risk
management
Categories of financial instruments
| |
As at |
| |
September 30,
2020(unaudited) |
|
December 31,
2019restated(see note
15) |
| |
US$’000 |
|
Financial assets (all at amortized cost): |
|
|
|
| Cash and cash
equivalents |
75,382 |
|
|
67,229 |
|
| Trade
receivables |
32,403 |
|
|
28,607 |
|
| Total financial
assets |
107,785 |
|
|
95,836 |
|
| |
|
|
|
|
Financial liabilities: |
|
|
|
| At
amortized cost |
|
|
|
| Trade payables
and accrued expenses |
99,483 |
|
|
77,556 |
|
| Lease
liabilities |
5,479 |
|
|
1,624 |
|
| Other
liabilities |
7,887 |
|
|
19,457 |
|
| Convertible
notes |
99,986 |
|
|
96,856 |
|
| Long term
loan |
85,835 |
|
|
81,610 |
|
| Contingent
value rights |
53,911 |
|
|
49,413 |
|
| At fair
value |
|
|
|
| Contingent
consideration |
63,880 |
|
|
53,048 |
|
| Total financial
liabilities |
416,461 |
|
|
379,564 |
|
|
Net |
(308,676 |
) |
|
(283,728 |
) |
Financial instruments evaluated at fair value can be classified
according to the following valuation hierarchy, which reflects the
extent to which the fair value is observable:
• Level
1: fair value evaluations using prices listed on active markets
(not adjusted) of identical assets or liabilities.
• Level
2: fair value evaluations using input data for the asset or
liability that are either directly observable (as prices) or
indirectly observable (derived from prices), but which do not
constitute listed prices pursuant to Level 1.
• Level
3: fair value evaluations using input data for the asset or
liability that are not based on observable market data
(unobservable input data).
The contingent consideration has been valued using Level 3. The
contingent consideration comprises:
·Contingent consideration relating to the acquisition of Amryt
GmbH (see Note 5, Business combinations and asset acquisitions)
that was measured at US$63,880,000 as at September 30, 2020
(December 31, 2019: US$53,048,000). The fair value comprises
royalty payments which was determined using probability weighted
revenue forecasts and the fair value of the milestones payments
which was determined using probability adjusted present values.
Impact of key unobservable input data:•
An increase
of 10% in estimated revenue forecasts would result in an increase
to the fair value of US$4,484,000. A decrease would have the
opposite effect.
• A 5%
increase in the discount factor used would result in a decrease to
the fair value of US$ 10,434,000. A decrease of 5% would result in
an increase to the fair value of US$13,935,000.
• A
six-month delay in the launch date for FILSUVEZ® for EB would
result in a decrease to the fair value of US$5,783,000.
15. Restatement of prior year comparatives
As described in Note 5, Business combinations and asset
acquisitions, the fair values of the assets and liabilities of the
Aegerion Group were finalized in September 2020. IFRS 3 requires
fair value adjustments to be recorded with effect from the date of
acquisition and consequently result in the restatement of
previously reported financial results. The impact on the statement
of financial position as at December 31, 2019 is shown below:
| |
|
As previously reported |
|
Adjustments |
Note |
As restated |
|
| |
|
US$’000 |
|
|
Assets |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
| Goodwill |
|
|
30,813 |
|
|
(6,727 |
) |
15a |
24,086 |
|
| Intangible
assets - net |
|
|
350,953 |
|
|
(8,626 |
) |
15b |
342,327 |
|
| Property,
plant and equipment |
|
|
3,036 |
|
|
— |
|
|
3,036 |
|
| Other
non-current assets |
|
2,306 |
|
|
(433 |
) |
15c |
1,873 |
|
| Total
non-current assets |
|
387,108 |
|
|
(15,786 |
) |
|
371,322 |
|
|
Current assets |
|
|
|
|
|
|
|
| Trade and
other receivables |
|
|
36,387 |
|
|
(887 |
) |
15c |
35,500 |
|
|
Inventories |
|
|
43,623 |
|
|
14,377 |
|
15d |
58,000 |
|
| Cash and cash
equivalents, including restricted cash |
|
|
67,229 |
|
|
— |
|
|
67,229 |
|
| Total
current assets |
|
147,239 |
|
|
13,490 |
|
|
160,729 |
|
| Total
assets |
|
534,347 |
|
|
(2,296 |
) |
|
532,051 |
|
| |
|
|
|
|
|
|
|
| Equity
and liabilities |
|
|
|
|
|
|
|
| Equity
attributable to owners of the parent |
|
|
|
|
|
|
|
| Share
capital |
|
|
11,918 |
|
|
— |
|
|
11,918 |
|
| Share
premium |
|
|
2,422 |
|
|
— |
|
|
2,422 |
|
| Other
reserves |
|
248,656 |
|
|
(26 |
) |
|
248,630 |
|
| Accumulated
deficit |
|
(133,674 |
) |
|
2,537 |
|
|
(131,137 |
) |
| Total
equity |
|
129,322 |
|
|
2,511 |
|
|
131,833 |
|
|
Non-current liabilities |
|
|
|
|
|
|
|
| Contingent
consideration and contingent value rights |
|
|
102,461 |
|
|
— |
|
|
102,461 |
|
| Deferred tax
liability |
|
|
18,921 |
|
|
(6,819 |
) |
15e |
12,102 |
|
| Long term
loan |
|
|
81,610 |
|
|
— |
|
|
81,610 |
|
| Convertible
notes |
|
|
96,856 |
|
|
— |
|
|
96,856 |
|
| Provisions and
other liabilities |
|
|
4,963 |
|
|
— |
|
|
4,963 |
|
| Total
non-current liabilities |
|
304,811 |
|
|
(6,819 |
) |
|
297,992 |
|
|
Current liabilities |
|
|
|
|
|
|
|
| Trade and
other payables |
|
|
76,596 |
|
|
1,755 |
|
15c |
78,351 |
|
| Provisions and
other liabilities |
|
|
23,618 |
|
|
257 |
|
15c |
23,875 |
|
| Total
current liabilities |
|
100,214 |
|
|
2,012 |
|
|
102,226 |
|
| Total
liabilities |
|
405,025 |
|
|
(4,807 |
) |
|
400,218 |
|
| Total
equity and liabilities |
|
534,347 |
|
|
(2,296 |
) |
|
532,051 |
|
The above adjustments to the statement of financial position
relate to the completion of the fair value assignment to
identifiable assets and liabilities acquired as part of the
Aegerion acquisition, the following adjustments have been reflected
in the condensed consolidated financial statements:
- The adjustments to goodwill are a consequence of the fair value
adjustments described in more detail below, which primarily relate
to the measurement of intangible assets, valuation of inventory and
associated deferred tax liabilities.
- The fair value of intangible assets acquired, consisting of
developed technology for metreleptin and lomitapide, was adjusted
as a consequence of the detailed review and update to the expected
future usage of inventory, the valuation of which was a factor in
determining the fair value of acquired developed technology. See
more detail on the update to the inventory valuation below.
- Accruals, provisions, and prepayments as at the acquisition
date were reviewed during the twelve months following the
acquisition and the fair values as at the acquisition date were
updated based on the results of a review of the conditions that
existed at this date.
- Fair value of inventory recognized at the date of acquisition
was updated to reflect the results of detailed reviews of both raw
material and finished good acquired. This involved a review the
expected timing of transition from usage of acquired finished goods
to usage of new inventory, including the review of expected timing
of manufacture runs and the review of expected inventory usage.
Additionally, a review was conducted on the demand and production
that would be saleable in the future. The review resulted in a
change in the assumptions and estimates regarding the usage of
acquired inventory, leading to an increase in the estimated usage
of acquired inventory and consequently resulting in an increase in
the fair value of acquired inventory.
- Deferred tax was updated to reflect the above changes to the
fair value of the inventory and of intangible assets. In addition,
deferred tax was updated to reflect the results of a review of the
historic tax basis of US intangible assets included in the Aegerion
acquisition. This review identified that the tax basis of the asset
in question was understated at the time of the acquisition. The
closing deferred tax liability as of December 31, 2019 was adjusted
for the correct tax basis.
As
noted above, IFRS 3 requires fair value adjustments to be recorded
as if the accounting for the business combination had been
completed at the acquisition date. Consequently, the comparative
information for prior periods presented in financial statements
were revised, including changes in inventory fair value step-up
amortization, intangible amortization and deferred tax effects
recognized in completing the acquisition accounting. The impact on
the income statement of the fair value adjustments for the year
ended December 31, 2019 is shown below:
| |
|
Year ended December 31, 2019 |
|
| |
|
As previously reported |
|
Adjustments* |
Note |
As restated |
|
|
| |
|
US$’000 |
|
| Revenue |
|
58,124 |
|
|
|
|
|
58,124 |
|
| Cost of
sales |
|
(42,001 |
) |
|
3,268 |
|
15f |
(38,733 |
) |
| Gross
profit |
|
16,123 |
|
|
3,268 |
|
|
19,391 |
|
| Research and
development expenses |
|
(15,827 |
) |
|
|
|
|
(15,827 |
) |
| Selling,
general and administrative expenses |
|
(35,498 |
) |
|
|
|
|
(35,498 |
) |
| Restructuring
and acquisition costs |
|
(13,038 |
) |
|
|
|
|
(13,038 |
) |
| Share based
payment expenses |
|
(841 |
) |
|
|
|
|
(841 |
) |
| Impairment
charge |
|
(4,670 |
) |
|
|
|
|
(4,670 |
) |
|
Operating loss before finance expense |
|
(53,751 |
) |
|
3,268 |
|
|
(50,483 |
) |
| Non-cash
change in fair value of contingent consideration |
|
(6,740 |
) |
|
|
|
|
(6,740 |
) |
| Non-cash
contingent value rights finance expense |
|
(1,511 |
) |
|
|
|
|
(1,511 |
) |
| Net finance
expense – other |
|
(4,759 |
) |
|
|
|
|
(4,759 |
) |
| Loss
on ordinary activities before taxation |
|
(66,761 |
) |
|
3,268 |
|
|
(63,493 |
) |
| Tax
credit/(charge) on loss on ordinary activities |
|
1,226 |
|
|
(731 |
) |
15g |
495 |
|
| Loss
for the year attributable to the equity holders of the
Company |
|
(65,535 |
) |
|
2,537 |
|
|
(62,998 |
) |
| Exchange
translation differences which may be reclassified through profit or
loss |
|
781 |
|
|
(26 |
) |
|
755 |
|
| Total other
comprehensive profit/(loss) |
|
781 |
|
|
(26 |
) |
|
755 |
|
| Total
comprehensive loss for the year attributable to the equity holders
of the Company |
|
(64,754 |
) |
|
2,511 |
|
|
(62,243 |
) |
| |
|
|
|
|
|
|
|
|
| Loss
per share |
|
|
|
|
|
|
|
|
| Loss per share
- basic and diluted, attributable to ordinary equity holders of the
parent (US$) |
|
|
(0.86 |
) |
|
|
|
|
|
(0.83 |
) |
The above adjustments relate to the impact on the statement of
comprehensive loss as result of the fair value adjustments
following the completion of the fair value assignment to
identifiable assets and liabilities acquired as part of the
Aegerion acquisition.
Non-cash adjustments to the statement of comprehensive
loss:
- Cost of sales has been adjusted for the impact on the non-cash
amortization of inventory fair value step-up and acquired
intangibles, for the period from the date of acquisition to the
year end, as a result of the update to acquired inventory and
intangible fair values following the finalization of acquisition
accounting for the Aegerion acquisition. See Note 15b and 15d,
above, for further detail on the fair value adjustments to acquired
inventory and intangible.
- As a result of a change in the measurement of the deferred tax
liability at the acquisition date, there was a non-cash adjustment
to the tax charge for the period from the date of acquisition to
the year end.
16. Events after the reporting period
COVID-19
Since a novel strain of coronavirus (SARS-CoV-2) causing a
disease referred to as COVID-19 was first reported in December
2019, the disease has spread across the world, including countries
in which we have patients and in which we have planned or active
clinical trial sites. The outbreak and government measures
taken in response have had a significant impact, both direct and
indirect, on all businesses and commerce as supply chains have been
disrupted, facilities and production have been suspended and demand
for certain goods and services has spiked while demand for other
goods and services has fallen. As COVID-19 continues to
spread around the globe, Amryt may experience disruptions that
could affect its business, preclinical studies and clinical
trials.
In response to the spread of COVID-19, Amryt has closed its
executive offices with its administrative employees continuing
their work outside of our offices and limited the number of staff
in Amryt’s manufacturing facility in Germany. Amryt provides
therapeutic products to HoFH and lipodystrophy patients globally on
a recurring basis. Once lomitapide (for the treatment of HoFH) or
metreleptin (for the treatment of lipodystrophy) is prescribed by
physicians, patients are typically on treatment over a long period
of time with repeat prescriptions for each patient.
Exercise of share optionsOn October 1, 2020,
the Company announced that the Company has issued 72,953 ordinary
shares of £0.06 each (“Ordinary Shares”) from treasury following
the exercise of options by a former employee.
Amryt Pharma (NASDAQ:AMYT)
Historical Stock Chart
From Jan 2025 to Feb 2025
Amryt Pharma (NASDAQ:AMYT)
Historical Stock Chart
From Feb 2024 to Feb 2025
