RedHill Biopharma(RDHL) - 2021 Q1 - Quarterly Report

Financial Performance - Net revenues for the three months ended March 31, 2021, were $20.575 million, a significant increase from $1.056 million in the same period of 2020, representing a growth of approximately 1,846%[6] - Gross profit for the same period was $10.322 million, compared to a gross loss of $0.659 million in Q1 2020, indicating a turnaround in profitability[6] - The company reported a comprehensive loss of $22.863 million for the three months ended March 31, 2021, compared to a loss of $17.157 million in the same period of 2020, reflecting ongoing investment in growth despite increased revenues[6] - Movantik® revenues for the three months ended March 31, 2021, were $18.898 million, with other products contributing $1.677 million[33] - The operating loss for the Commercial Operations segment was $8.515 million, while the Research and Development segment incurred an operating loss of $9.637 million, leading to a consolidated operating loss of $18.152 million for the three months ended March 31, 2021[36] Expenses and Investments - Research and development expenses increased to $7.484 million from $2.765 million year-over-year, reflecting a rise of approximately 171% as the company continues to invest in its therapeutic candidates[6] - Selling and marketing expenses rose to $13.895 million from $9.006 million, an increase of about 54% year-over-year, indicating a focus on expanding market presence[6] Assets and Cash Position - The total assets as of March 31, 2021, were $220.123 million, up from $180.241 million at the end of 2020, marking an increase of approximately 22%[10] - Cash and cash equivalents increased to $75.972 million from $29.295 million year-over-year, representing a growth of approximately 159%[10] - The accumulated deficit as of March 31, 2021, was $302.325 million, up from $280.334 million at the end of 2020, indicating ongoing financial challenges despite revenue growth[10] Future Plans and Financing - The company plans to fund future operations through commercialization and out-licensing of therapeutic candidates, as well as raising additional capital through equity or debt financing[17] - The company issued 7,836,209 ADSs for net proceeds of approximately $58 million and 428,421 ADSs from options exercises for about $3 million during the reporting period[29] Legal and Regulatory Matters - The company plans to vigorously defend itself against a patent infringement complaint filed by Aether Therapeutics Inc. regarding the Movantik® product[29] - RedHill Biopharma amended its License Agreement with AstraZeneca, adjusting a payment of $15.5 million due in December 2021 to gradual payments totaling $16 million from March 2021 to December 2022[29] COVID-19 Impact - The company continues to assess the impact of the COVID-19 pandemic on its operations, with some commercial activities affected, particularly sales of Aemcolo® for travelers' diarrhea[22] Fair Value Measurements - The fair value of the borrowing as of March 31, 2021, was approximately $103 million, while the payable in respect of intangible assets purchase was about $27 million[34] - The company’s financial assets as of December 31, 2020, were measured at fair value at level 1, with no liabilities measured at fair value during the reported periods[34] - The estimated fair value of options granted on April 28, 2021, was approximately $8.5 million, with a total of 2,121,296 ADSs granted to employees and consultants[37] Revenue Allowance - The allowance for deductions from revenue increased to $22.677 million as of March 31, 2021, up from $18.343 million at the beginning of the year, reflecting a rise of approximately 23%[30]