Aquestive(US:AQST)2020-08-04 20:49Revenue and Financial Performance - The company reported a significant revenue shift, with Indivior accounting for 48% of total revenues for the six-month period ended June 30, 2020, down from 86% in the same period of 2019[130]. - Revenues for the six-month period ended June 30, 2020, were $30,440, compared to $23,772 for the same period in 2019, reflecting a growth of approximately 28%[134]. - Total revenues increased 95% or $10,546 to $21,675 for the three-month period ended June 30, 2020, compared to $11,129 for the same period in 2019[169]. - License and royalty revenue increased $12,504 to $12,928 for the three-month period ended June 30, 2020, primarily due to a $4,000 milestone from FDA approval and $8,000 in royalty revenue from Kynmobi[172]. - Proprietary product sales increased $451 or 59% to $1,222 for the three-month period ended June 30, 2020, driven by increased prescriptions for Sympazan[174]. - Total revenues for the six-month period ended June 30, 2020, increased 28% or $6,668 to $30,440 compared to $23,772 for the same period in 2019[178]. - License and royalty revenue increased 165% or $8,308 to $13,354 for the six-month period ended June 30, 2020 compared to $5,046 in the prior year period[180]. - Proprietary product sales, net increased 76% or $1,029 to $2,382 for the six-month period ended June 30, 2020 compared to $1,353 in the prior year period[182]. Expenses and Losses - The company incurred net losses of $18,864 for the six-month period ended June 30, 2020, compared to $35,198 for the same period in 2019, indicating a reduction in losses by approximately 46%[134]. - The company expects to continue incurring net losses for at least the next few years as it develops and commercializes proprietary product candidates, with substantial expenses anticipated in 2020 and beyond[135]. - Research and development expenses decreased 53% or $4,304 to $3,847 for the three-month period ended June 30, 2020, primarily due to the timing of clinical trial activities[174]. - Selling, general and administrative expenses decreased 14% or $2,352 to $13,894 for the three-month period ended June 30, 2020, as a result of careful expense management[175]. - Research and development expenses decreased 34% or $4,253 to $8,201 for the six-month period ended June 30, 2020 compared to $12,454 in the prior year period[185]. - Selling, general and administrative expenses decreased 17% or $5,643 to $28,507 for the six-month period ended June 30, 2020 compared to $34,154 in the prior year period[186]. - Interest expense increased 42% or $810 to $2,747 for the three-month period ended June 30, 2020, due to additional outstanding debt and higher loan costs[176]. - Interest expense increased 43% or $1,655 to $5,518 for the six-month period ended June 30, 2020 compared to $3,863 in the prior year period[187]. - Interest income decreased 72% or $307 for the six-month period ended June 30, 2020 compared to the prior year period[188]. Product Development and Pipeline - The FDA has assigned a Prescription Drug User Fee Act (PDUFA) goal date of September 27, 2020, for the NDA filed for Libervant, which is a key product candidate[124]. - The company expects to initiate pharmacokinetic clinical trials for AQST-108 in the third quarter of 2020, subject to any delays from the COVID-19 pandemic[126]. - The company has a proprietary pipeline of complex molecule-based products, including AQST-305 for acromegaly, which is in early development stages[127]. - The company aims to demonstrate that Libervant will represent a "major contribution to patient care" if approved, as it is the first non-device delivered oral diazepam-based product for managing seizure clusters[124]. - The company plans to focus on the approval and commercialization of Libervant and the clinical development of AQST-108, with PK clinical trials expected to begin in Q3 2020[135]. - The company launched its first proprietary product, Sympazan, in late 2018, and expects to incur higher commercialization costs than net revenue throughout 2020[215]. Cash and Financing - As of June 30, 2020, the company had $25,422 in cash and cash equivalents and an accumulated deficit of $149,338, resulting in a net shareholders' deficit of $21,388[134]. - The company expects existing cash and cash equivalents, along with anticipated revenue from licensed product activities, to be adequate to fund expected cash requirements for the next 12 months[213]. - Key assumptions for funding expectations include current cash balances, continued revenue from proprietary and licensed products, and access to capital markets if needed[214]. - The company has no committed sources of additional capital and may need to raise significant funds through equity or debt issuances in the future[138]. - The company does not currently have any committed external sources of financing and may need to raise additional capital to advance product candidates[221]. - The company may seek additional funding through third-party arrangements, strategic alliances, or licensing arrangements[225]. - The company’s ability to secure additional financing could be impacted by various factors, including operating performance and market conditions[222]. Market and Competitive Landscape - The company retains approximately 40% of the film market share for Suboxone despite the entry of generic competitors[130]. - Revenue from Suboxone is declining, but this is partially offset by revenue from Sympazan, which is expected to grow as a precursor to Libervant's launch[136]. - Manufacture and supply revenue decreased approximately 19% or $1,656 to $7,259 for the three-month period ended June 30, 2020, due to lower volume and market share erosion from generic competition[171]. - Manufacture and supply revenue decreased approximately 9% or $1,409 to $14,175 for the six-month period ended June 30, 2020, attributed to lower volume partially offset by increased pricing[179]. - Accounts receivables are predominantly concentrated with Indivior and Sunovion as of June 30, 2020[231]. - The launch of Sympazan in 2018 has reduced concentration with three large national wholesalers of pharmaceutical products[231]. - Future sales increases of Sympazan and other pipeline products may lead to significant concentration with wholesalers[231]. - Non-performance or non-payment by Indivior or wholesalers could materially adversely impact financial condition, results of operations, or net cash flow[231]. Impact of COVID-19 - The COVID-19 pandemic has introduced uncertainties that may impact the company's operations, clinical trials, and financial condition, although manufacturing and supply have continued without significant interruption[141][142].