Strongbridge Biopharma plc, (Nasdaq: SBBP) (“Strongbridge” or the
“Company”), a global commercial-stage biopharmaceutical company
focused on the development and commercialization of therapies for
rare diseases with significant unmet needs, today reported
financial results for the second quarter of 2021 and provided a
corporate update.
“Strongbridge had an exceptional second quarter,
with KEVEYIS® (dichlorphenamide) delivering the highest net revenue
for a quarter since its launch by the Company in 2017. Given our
strong first half performance, we expect to meet, or potentially
exceed, the higher end of our full-year 2021 KEVEYIS revenue
guidance of $34 million to $36 million,” said John
H. Johnson, chief executive officer of Strongbridge Biopharma.
“Additionally, against the backdrop of the recent announcement of
the proposed acquisition of Strongbridge by Xeris, we remain
focused on delivering strong revenue growth for KEVEYIS, on the
continued review of RECORLEV® (levoketoconazole) by the FDA,
and on flawlessly executing the myriad of RECORLEV pre-launch
activities. Strongbridge and Xeris are working closely on all of
the required steps toward the expected close of the transaction
early in the fourth quarter of this year. Upon transaction close,
we look forward to unlocking the value of our combined assets and
providing shareholders with the opportunity to participate in the
success of the Company.”
Corporate & Financial
Highlights
Rare Neuromuscular Franchise:
KEVEYIS® (dichlorphenamide)
- The Company achieved KEVEYIS net
product sales of $10.0 million for the second quarter
ended June 30, 2021, representing a 28 percent increase over
second quarter 2020 revenue of $7.8 million.
- Second quarter record sales
performance is primarily attributable to the growth in total
patients on drug, resulting from new patient starts combined with
reduced discontinuation rates for existing patients on
therapy.
- The Company maintains KEVEYIS
full-year revenue guidance for 2021 of $34 million to $36 million,
but currently expects to meet, or potentially exceed, the higher
end of the range.
- In July, the Company announced post
hoc analyses from a one year open-label study evaluating daily use
of KEVEYIS for the treatment of Primary Periodic Paralysis (PPP).
The analyses were published in the peer-reviewed
journal, Muscle & Nerve, and confirmed that long-term
treatment with KEVEYIS is safe and effective for chronic use.
Rare Endocrine Franchise: RECORLEV®
(levoketoconazole)
- In May, the Company announced that
the U.S. Food and Drug Administration (FDA) had accepted for review
the Company’s New Drug Application (NDA) for RECORLEV for the
treatment of endogenous Cushing’s syndrome. Within the Day 74
letter, the FDA set a Prescription Drug User Fee Act (PDUFA) target
action date of January 1, 2022, which reflects a projected 10-month
standard review period.
- In June, the United States Patent
and Trademark Office (USPTO) issued U.S. Patent No. 11,020,393
entitled, “Methods of Treating Disease with Levoketoconazole” which
covers a method of treating Cushing’s syndrome patients with
RECORLEV® (levoketoconazole) who also take metformin for Type 2
diabetes. The term of the U.S. patent will expire on March 2,
2040.
- Strongbridge continues to prepare
for the potential commercial launch of RECORLEV in the first
quarter of 2022.
Corporate Updates
- As previously announced on May 24,
2021, Strongbridge and Xeris Pharmaceuticals, Inc. (“Xeris”)
entered into an agreement under which Xeris will acquire
Strongbridge in a stock and CVR transaction for a transaction
equity value of approximately $267 million, based on the closing
price of Xeris’ common stock of $3.47 on May 21, 2021 and
Strongbridge’s fully diluted share capital. The proposed
acquisition will be effected by means of a “scheme of arrangement”
under Chapter 1 of Part 9 of the Irish Companies Act of 2014.
- Also as previously announced on
July 26, 2021, special shareholder meetings of Strongbridge are
scheduled for Wednesday, September 8, 2021, to seek approval of the
acquisition of Strongbridge by Xeris. In accordance with Irish law,
the definitive Joint Proxy Statement of Strongbridge and Xeris for
such meetings was filed on July 29, 2021.
- On July 23, 2021, Strongbridge and
its existing lender, Avenue Venture Opportunities Fund, LP
(“Avenue”) entered into an amendment to its existing term loan
agreement dated May 19, 2020 (the “Term Loan Agreement”). Under the
Term Loan Agreement, Strongbridge initially granted to Avenue an
option to convert up to $3 million of the aggregate principal
amount of any loans outstanding under the Term Loan Agreement into
Strongbridge ordinary shares (the “Conversion Option”).
The loan amendment amends the Conversion Option such that
$10.0 million of the aggregate principal amount of any loans
outstanding under the Term Loan Agreement will automatically
convert into Strongbridge ordinary shares immediately prior to the
completion of the acquisition of Strongbridge by Xeris. The
conversion price remains unchanged at $2.24 per share.
- Strongbridge reports approximately
$63.8 million of cash and cash equivalents as of June 30,
2021.
Second Quarter 2021 Financial Results
The Company’s net revenues from sales of KEVEYIS
increased $2.2 million, or 28 percent, to $10.0 million for the
three months ended June 30, 2021, compared to $7.8 million for the
three months ended June 30, 2020. The Company recorded cost of
sales of $0.5 million for the three months ended June 30, 2021,
compared to cost of sales of $0.4 million for the same period in
2020. Cost of sales increased due to increased sales volume for the
current period. Gross margins were 95 percent for the three months
ended June 30, 2021, and for the same period in 2020.
Selling, general and administrative expenses
were $16.0 million for the three months ended June 30, 2021,
compared to $9.6 million for the same period in 2020. The increase
is due to an increase in compensation costs and an increase in our
outside professional fees, mostly due to investment banking fees
and legal expenses related to our business combination transaction
with Xeris.
Research and development expenses were $5.4
million for the three months ended June 30, 2021, compared to $6.2
million for the same period in 2020. The decrease was primarily due
to decreases in costs associated with our LOGICS and OPTICS
trials.
For the three months ended June 30, 2021, basic
net loss attributable to ordinary shareholders on a GAAP basis was
($13.2 million), or ($0.20) per share, compared to a basic net loss
attributable to ordinary shareholders of ($17.3) million, or
($0.32) per share, for the same period in 2020. Net loss for the
three months ended June 30, 2021, was lower than the same period in
2020 due to the increase in KEVEYIS revenue of $2.2 million, the
reduction in research and development expenses and an $8.0 million
change in the revaluation of the fair value of our liability
classified warrants due to changes in the Company’s volatility and
stock price in 2021 compared to 2020. Those decreases were offset
by $6.4 million increase in our selling, general and administrative
expenses.
For the three months ended June 30, 2021,
non-GAAP basic net loss attributable to ordinary shareholders was
($4.5 million), or ($0.07) per share, compared to a non-GAAP basic
net loss attributable to ordinary shareholders of ($6.7 million),
or ($0.12) per share, for the same period in 2020. The decrease in
non-GAAP net loss during the three months ended June 30, 2021, was
primarily due to the increase in KEVEYIS revenue of $2.2 million
and a decrease in our research and development expenses during the
three months ended June 30, 2021, compared to the same period in
2020.
Year-to-Date 2021 Financial Results
The Company’s net revenues from sales of KEVEYIS
increased $4.0 million, or 28 percent, to $18.4 million for the six
months ended June 30, 2021, compared to $14.4 million for the six
months ended June 30, 2020. The Company recorded cost of sales
of $0.9 million for the six months ended June 30, 2021, compared to
cost of sales of $1.4 million for the same period in 2020. Cost of
sales decreased due to changes in the assumptions underlying the
allocation between the purchase price of our inventory and our
supply agreement. Gross margins were 95 percent for three months
ended June 30, 2021, compared to gross margins of 91 percent for
the same period in 2020.
Selling, general and administrative expenses
were $26.9 million for the six months ended June 30, 2021, compared
to $20.0 million for the same period in 2020. The increase is
primarily due to an increase in compensation costs and an increase
in our outside professional fees, mostly due to investment banking
fees and legal expenses related to our business combination
transaction with Xeris Pharmaceuticals, Inc.
Research and development expenses were $11.2
million for the six months ended June 30, 2021, compared to $13.7
million for the same period in 2020. The decrease was primarily due
to decreases in costs associated with our LOGICS and OPTICS trials,
offset by increases in regulatory costs associated with our NDA
submission.
For the six months ended June 30, 2021, basic
net loss attributable to ordinary shareholders on a GAAP basis was
($25.1 million), or ($0.37) per share, compared to a basic net loss
attributable to ordinary shareholders of ($30.0) million, or
($0.55) per share, for the same period in 2020. Net loss for the
six months ended June 30, 2021, was lower than the same period in
2020 due to the increase in KEVEYIS revenue of $4.0 million, the
reduction in research and development expenses of $2.5 million and
a $6.7 million change in the revaluation of the fair value of our
liability classified warrants due to changes in the Company’s
volatility and stock price in 2021 compared to 2020. Those
decreases were offset by $6.8 million increase in our selling,
general and administrative expenses.
For the six months ended June 30, 2021, non-GAAP
basic net loss attributable to ordinary shareholders was ($11.7
million), or ($0.17) per share, compared to a non-GAAP basic net
loss attributable to ordinary shareholders of ($17.0 million), or
($0.31) per share, for the same period in 2020. The decrease in
non-GAAP net loss during the six months ended June 30, 2021, was
primarily due to the increase in KEVEYIS revenue of $4.0 million
and a decrease in our research and development expenses of $2.5
million offset by an increase in cash interest expense during the
six months ended June 30, 2021, compared to the same period in
2020.
STRONGBRIDGE BIOPHARMA plc |
Select Consolidated Balance Sheet Information
(unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
2021 |
|
|
2020 |
Consolidated Balance
Sheet Data: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
63,774 |
|
$ |
87,522 |
Total assets |
|
|
96,820 |
|
|
121,100 |
Long-term debt, net |
|
|
17,710 |
|
|
17,114 |
Total liabilities |
|
|
52,429 |
|
|
55,495 |
Total stockholders’
equity |
|
|
44,391 |
|
|
65,605 |
|
|
|
|
|
|
|
STRONGBRIDGE BIOPHARMA plc |
Consolidated Statements of Operations and Comprehensive
Loss (unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Total revenues |
$ |
10,042 |
|
|
$ |
7,760 |
|
|
$ |
18,424 |
|
|
$ |
14,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excluding amortization of intangible asset) |
$ |
467 |
|
|
$ |
393 |
|
|
$ |
878 |
|
|
$ |
1,362 |
|
Selling, general and administrative |
|
15,988 |
|
|
|
9,638 |
|
|
|
26,934 |
|
|
|
20,041 |
|
Research and development |
|
5,397 |
|
|
|
6,152 |
|
|
|
11,235 |
|
|
|
13,704 |
|
Amortization of intangible asset |
|
1,255 |
|
|
|
1,255 |
|
|
|
2,511 |
|
|
|
2,511 |
|
Total cost and expenses |
|
23,107 |
|
|
|
17,438 |
|
|
|
41,558 |
|
|
|
37,618 |
|
Operating loss |
|
(13,065 |
) |
|
|
(9,678 |
) |
|
|
(23,134 |
) |
|
|
(23,184 |
) |
Other expense, net: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(810 |
) |
|
|
(253 |
) |
|
|
(1,592 |
) |
|
|
(253 |
) |
Unrealized gain (loss) on fair value of warrants |
|
680 |
|
|
|
(7,367 |
) |
|
|
(95 |
) |
|
|
(6,787 |
) |
Other (expense) income, net |
|
(45 |
) |
|
|
26 |
|
|
|
(233 |
) |
|
|
254 |
|
Total other expense, net |
|
(175 |
) |
|
|
(7,594 |
) |
|
|
(1,920 |
) |
|
|
(6,786 |
) |
Loss before income taxes |
|
(13,240 |
) |
|
|
(17,272 |
) |
|
|
(25,054 |
) |
|
|
(29,970 |
) |
Income tax expense |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Net loss |
$ |
(13,241 |
) |
|
$ |
(17,272 |
) |
|
$ |
(25,055 |
) |
|
$ |
(29,970 |
) |
Other comprehensive
income |
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on marketable securities |
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(3 |
) |
Comprehensive loss |
$ |
(13,241 |
) |
|
$ |
(17,278 |
) |
|
$ |
(25,055 |
) |
|
$ |
(29,973 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
ordinary shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(13,241 |
) |
|
$ |
(17,272 |
) |
|
$ |
(25,055 |
) |
|
$ |
(29,970 |
) |
Diluted |
$ |
(13,921 |
) |
|
$ |
(17,272 |
) |
|
$ |
(25,055 |
) |
|
$ |
(29,970 |
) |
Net loss per share
attributable to ordinary shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.20 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.55 |
) |
Diluted |
$ |
(0.21 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.55 |
) |
Weighted-average shares used
in computing net loss per share attributable to ordinary
shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
67,653,659 |
|
|
|
54,302,235 |
|
|
|
67,569,136 |
|
|
|
54,266,675 |
|
Diluted |
|
67,921,260 |
|
|
|
54,302,325 |
|
|
|
67,569,136 |
|
|
|
54,266,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
STRONGBRIDGE BIOPHARMA plc |
Reconciliation of Non-GAAP Financial Measures
(unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2021 |
|
|
|
|
|
|
|
Operating loss |
|
|
Loss beforeincome taxes |
|
|
Net lossattributable toordinaryshareholders |
|
|
Net loss pershareattributable toordinaryshareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
$ |
(13,065 |
) |
|
$ |
(13,240 |
) |
|
$ |
(13,241 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business combination transaction expenses (a) |
|
|
|
|
$ |
5,812 |
|
|
|
5,812 |
|
|
|
5,812 |
|
|
|
|
Amortization of intangible asset (b) |
|
|
|
|
$ |
1,255 |
|
|
$ |
1,255 |
|
|
$ |
1,255 |
|
|
|
|
Stock-based compensation - Selling, General & Admin. (c) |
|
|
|
|
$ |
1,586 |
|
|
$ |
1,586 |
|
|
$ |
1,586 |
|
|
|
|
Stock-based compensation - Research & Development (c) |
|
|
|
|
$ |
496 |
|
|
$ |
496 |
|
|
$ |
496 |
|
|
|
|
Unrealized gain on fair value of warrants (d) |
|
|
|
|
|
- |
|
|
$ |
(680 |
) |
|
$ |
(680 |
) |
|
|
|
Non-cash interest expense (e) |
|
|
|
|
|
- |
|
|
$ |
311 |
|
|
$ |
311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
$ |
(3,916 |
) |
|
$ |
(4,460 |
) |
|
$ |
(4,461 |
) |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
|
|
|
|
|
|
|
Operating loss |
|
|
Loss beforeincome taxes |
|
|
Net lossattributable toordinaryshareholders |
|
|
Net loss pershareattributable toordinaryshareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
$ |
(9,678 |
) |
|
$ |
(17,272 |
) |
|
$ |
(17,272 |
) |
|
$ |
(0.32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible asset (b) |
|
$ |
1,255 |
|
|
$ |
1,255 |
|
|
$ |
1,255 |
|
|
|
|
Stock-based compensation - Selling, General & Admin. (c) |
$ |
1,280 |
|
|
$ |
1,280 |
|
|
$ |
1,280 |
|
|
|
|
Stock-based compensation - Research & Development (c) |
$ |
493 |
|
|
$ |
493 |
|
|
$ |
493 |
|
|
|
|
Unrealized loss on fair value of warrants (d) |
|
- |
|
|
$ |
7,367 |
|
|
$ |
7,367 |
|
|
|
|
Non-cash interest expense (e) |
|
|
|
- |
|
|
$ |
135 |
|
|
$ |
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
$ |
(6,650 |
) |
|
$ |
(6,742 |
) |
|
$ |
(6,742 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
The business combination transaction expenses are excluded
due to the non-recurring nature of these expenses. We believe such
exclusion facilitates investors’ ability to more accurately compare
our operating results to those of our peer companies and is
reflective of how management internally manages the business. |
(b)
The effects of amortization of the intangible asset are
excluded because these charges are non-cash, and we believe such
exclusion facilitates investors’ ability to more accurately compare
our operating results to those of our peer companies. |
(c)
The effects of non-cash employee stock-based compensation are
excluded because of varying available valuation methodologies and
subjective assumptions. We believe this is a useful measure
for investors because such exclusion facilitates comparison to peer
companies who also provide similar non-GAAP disclosures and is
reflective of how management internally manages the business. |
(d)
The unrealized gain (loss) on fair value of warrants are excluded
due to the nature of this charge, which is non-cash and related
primarily to the effect of changes in the company’s stock price at
a point in time. We believe such exclusion facilitates investors’
ability to more accurately compare our operating results to those
of our peer companies. |
(e)
The effects of non-cash interest charges are excluded. We
believe such exclusion facilitates an understanding of the effects
of the debt service obligations on the Company’s liquidity and
comparisons to peer group companies and is reflective of how
management internally manages the business. |
|
STRONGBRIDGE BIOPHARMA plc |
Reconciliation of Non-GAAP Financial Measures
(unaudited) |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
|
|
|
|
|
|
|
Operating loss |
|
|
Loss beforeincome taxes |
|
|
Net lossattributable toordinaryshareholders |
|
|
Net loss pershareattributable toordinaryshareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
$ |
(23,134 |
) |
|
$ |
(25,054 |
) |
|
$ |
(25,055 |
) |
|
$ |
(0.37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business combination transaction expenses (a) |
$ |
5,812 |
|
|
$ |
5,812 |
|
|
$ |
5,812 |
|
|
|
|
Amortization of intangible asset (b) |
|
$ |
2,511 |
|
|
$ |
2,511 |
|
|
$ |
2,511 |
|
|
|
|
Stock-based compensation - Selling, General & Admin. (c) |
$ |
3,305 |
|
|
$ |
3,305 |
|
|
$ |
3,305 |
|
|
|
|
Stock-based compensation - Research & Development (c) |
$ |
1,054 |
|
|
$ |
1,054 |
|
|
$ |
1,054 |
|
|
|
|
Unrealized loss on fair value of warrants (d) |
|
- |
|
|
$ |
95 |
|
|
$ |
95 |
|
|
|
|
Non-cash interest expense (e) |
|
|
|
- |
|
|
$ |
597 |
|
|
$ |
597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
$ |
(10,452 |
) |
|
$ |
(11,680 |
) |
|
$ |
(11,681 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
|
|
|
|
|
|
|
Operating loss |
|
|
Loss beforeincome taxes |
|
|
Net lossattributable toordinaryshareholders |
|
|
Net loss pershareattributable toordinaryshareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
$ |
(23,184 |
) |
|
$ |
(29,970 |
) |
|
$ |
(29,970 |
) |
|
$ |
(0.55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible asset (b) |
|
$ |
2,511 |
|
|
$ |
2,511 |
|
|
$ |
2,511 |
|
|
|
|
Stock-based compensation - Selling, General & Admin. (c) |
$ |
2,550 |
|
|
$ |
2,550 |
|
|
$ |
2,550 |
|
|
|
|
Stock-based compensation - Research & Development (c) |
$ |
974 |
|
|
$ |
974 |
|
|
$ |
974 |
|
|
|
|
Unrealized loss on fair value of warrants (d) |
|
- |
|
|
$ |
6,787 |
|
|
$ |
6,787 |
|
|
|
|
Non-cash interest expense (e) |
|
|
|
- |
|
|
$ |
135 |
|
|
$ |
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted |
|
|
|
|
$ |
(17,149 |
) |
|
$ |
(17,013 |
) |
|
$ |
(17,013 |
) |
|
$ |
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
The business combination transaction expenses are excluded
due to the non-recurring nature of these expenses. We believe such
exclusion facilitates investors’ ability to more accurately compare
our operating results to those of our peer companies and is
reflective of how management internally manages the business. |
(b)
The effects of amortization of the intangible asset are
excluded because these charges are non-cash, and we believe such
exclusion facilitates investors’ ability to more accurately compare
our operating results to those of our peer companies. |
(c)
The effects of non-cash employee stock-based compensation are
excluded because of varying available valuation methodologies and
subjective assumptions. We believe this is a useful measure
for investors because such exclusion facilitates comparison to peer
companies who also provide similar non-GAAP disclosures and is
reflective of how management internally manages the business. |
(d)
The unrealized loss on fair value of warrants are excluded
due to the nature of this charge, which is non-cash and related
primarily to the effect of changes in the company’s stock price at
a point in time. We believe such exclusion facilitates investors’
ability to more accurately compare our operating results to those
of our peer companies. |
(e)
The effects of non-cash interest charges are excluded. We
believe such exclusion facilitates an understanding of the effects
of the debt service obligations on the Company’s liquidity and
comparisons to peer group companies and is reflective of how
management internally manages the business. |
|
About Strongbridge Biopharma
plc
Strongbridge Biopharma is a global
commercial-stage biopharmaceutical company focused on the
development and commercialization of therapies for rare diseases
with significant unmet needs. Strongbridge’s rare endocrine
franchise includes RECORLEV® (levoketoconazole), an adrenal
steroidogenesis inhibitor with a New Drug Application that is
currently under review by the FDA for the treatment of endogenous
Cushing’s syndrome, and veldoreotide extended release, a
pre-clinical next-generation somatostatin analog being investigated
for the treatment of acromegaly and potential additional
applications in other conditions amenable to somatostatin receptor
activation. Both RECORLEV and veldoreotide have received orphan
drug designation from the FDA and the European Medicines Agency.
The Company’s rare neuromuscular franchise includes
KEVEYIS® (dichlorphenamide), the first and only FDA-approved
treatment for hyperkalemic, hypokalemic, and related variants of
primary periodic paralysis. KEVEYIS has orphan drug exclusivity in
the United States.
No Offer or Solicitation
This communication is for information purposes
only and is not intended to and does not constitute an offer to
sell or the solicitation of an offer to subscribe for or buy or an
invitation to purchase or subscribe for any securities or the
solicitation of any vote or approval in any jurisdiction pursuant
to the acquisition (the “Acquisition”) of Strongbridge by Xeris by
means of a scheme of arrangement under Irish law (the “Scheme”) or
the other transactions contemplated by the Transaction Agreement,
dated May 24, 2021, among Strongbridge, Xeris, Xeris Biopharma
Holdings, Inc. (“HoldCo”) and Wells MergerSub, Inc. (collectively,
the “Transaction”), nor shall there be any sale, issuance or
transfer of securities in any jurisdiction in contravention of
applicable law. In particular, this communication is not an offer
of securities for sale into the United States. No offer of
securities shall be made in the United States absent registration
under the Securities Act of 1933, as amended, or pursuant to an
exemption from, or in a transaction not subject to, such
registration requirements. The Acquisition will be made solely by
means of the Scheme Document, which contains the full terms and
conditions of the Acquisition, including details of how
Strongbridge shareholders may vote in respect of the
Acquisition.
Important Additional Information and Where to Find
It
Strongbridge, Xeris and HoldCo have prepared and
filed with the SEC, and the SEC declared effective on July 29,
2021, a registration statement on Form S-4 (File No. 333-257642)
that includes the joint proxy statement by Xeris and Strongbridge
(the “Proxy Statement”) and also constitutes a prospectus with
respect to the HoldCo shares of common stock (“HoldCo Shares”) to
be issued pursuant to the Transaction. The Proxy Statement also
contains the Scheme Document and further information relating to
the implementation of the Transaction, the full terms and
conditions of the Transaction (including the Scheme), notices of
the Strongbridge Special Meetings and the Xeris Special Meeting
(each as defined in the Proxy Statement) and information on HoldCo
Shares. Strongbridge and Xeris may also file other documents with
the SEC regarding the Transaction. This communication is not a
substitute for the Proxy Statement or any other document which
Strongbridge, Xeris or HoldCo may file with the SEC.
The Proxy Statement, as well as Strongbridge’s
and Xeris’ other public filings with the SEC, may be obtained
without charge at the SEC’s website at www.sec.gov and, in the case
of Strongbridge’s filings, at Strongbridge’s website at
www.strongbridgebio.com and, in the case of Xeris’ filings, at
Xeris’ website at www.xerispharma.com.
INVESTORS, STRONGBRIDGE SHAREHOLDERS AND XERIS
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS
WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION.
Any vote in respect of resolutions to be
proposed at the Strongbridge Special Meetings to approve the
Acquisition, the Scheme or related matters, or other responses in
relation to the Acquisition, should be made only on the basis of
the information contained in the Proxy Statement (including the
Scheme Document). Similarly, any decision in respect of resolutions
to be proposed at the Xeris Special Meeting or any vote in respect
of, or other response to, the Transaction, should be made only on
the basis of the information contained in the Proxy Statement.
Participants in the Solicitation
Strongbridge, Xeris, HoldCo and their respective
directors, executive officers and employees may be deemed to be
participants in the solicitation of proxies from their respective
shareholders in there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
In particular, this communication is not an offer of securities for
sale into the United States. No offer of securities shall be made
in the United States absent registration under the Securities Act
of 1933, as amended, or pursuant to an exemption from, or in a
transaction not subject to, such registration requirements. The
Acquisition will be made solely by means of the Scheme Document,
which contains the full terms and conditions of the Acquisition,
including details of how Strongbridge shareholders may vote in
respect of the Acquisition.
Forward-Looking Statements
This communication contains certain
forward-looking statements with respect to a proposed transaction
involving Xeris and Strongbridge and Xeris’, Strongbridge’s and/or
the combined group’s estimated or anticipated future business,
performance and results of operations and financial condition,
including estimates, forecasts, targets and plans for Strongbridge
and, following the acquisition, if completed, the combined group.
The words “believe,” “expect,” “anticipate,” “project” and similar
expressions, among others, generally identify forward-looking
statements. All statements, other than statements of historical
facts, contained in this press release, are forward-looking
statements, including statements related to 2021 KEVEYIS revenue
guidance, expected cash balances and cash runway, potential
advantages of RECORLEV, the anticipated timing for the review of
the NDA for RECORLEV and the potential launch of RECORLEV (if
approved), Strongbridge’s strategy, plans, intellectual property
portfolio, outcomes of product development efforts and objectives
of management for future operations. These forward-looking
statements are subject to risks and uncertainties that may cause
actual results to differ materially from those indicated in the
forward-looking statements. Such risks and uncertainties include,
but are not limited to, risks and uncertainties associated with
clinical development and the regulatory approval process, the
reproducibility of any reported results showing the benefits of
RECORLEV, the adoption of RECORLEV by physicians, if approved, as
treatment for any disease, the emergence of unexpected adverse
events following regulatory approval and use of the product by
patients, the possibility that the Transaction will not be pursued,
failure to obtain necessary shareholder or regulatory approvals or
required financing or to satisfy any of the other conditions to
Transaction, the reaction of Xeris’ and Strongbridge’s shareholders
to Transaction, adverse effects on the market price of Xeris shares
of common stock or Strongbridge ordinary shares and on Xeris’ or
Strongbridge’s operating results because of a failure to complete
the Transaction, failure to realize the expected benefits of the
Transaction, failure to promptly and effectively integrate
Strongbridge’s businesses, negative effects relating to the
announcement of the Transaction or any further announcements
relating to the Transaction or the consummation of the Transaction
on the market price of Xeris shares of common stock or Strongbridge
ordinary shares, significant transaction costs and/or unknown or
inestimable liabilities, the risk that any potential payment of
proceeds pursuant to the CVR Agreement (as defined in the Proxy
Statement) may not be distributed at all or result in any value to
Strongbridge shareholders, potential litigation associated with the
Transaction, general economic and business conditions that affect
the combined companies following the consummation of the
Transaction, the impact of the COVID-19 pandemic on Xeris’ or
Strongbridge’s businesses or the combined businesses following the
consummation of the transaction, changes in global, political,
economic, business, competitive, market and regulatory forces,
future exchange and interest rates, changes in tax laws,
regulations, rates and policies, future business acquisitions or
disposals and competitive developments. These forward-looking
statements are based on numerous assumptions and assessments made
in light of Strongbridge’s experience and perception of historical
trends, current conditions, business strategies, operating
environment, future developments and other factors it believes
appropriate. By their nature, forward-looking statements involve
known and unknown risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future.
The factors described in the context of such forward-looking
statements in this communication could cause Xeris’ plans with
respect to Strongbridge, Strongbridge’s or Xeris’ actual results,
performance or achievements, industry results and developments to
differ materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct and persons reading this communication
are therefore cautioned not to place undue reliance on these
forward-looking statements which speak only as at the date of this
communication. Additional risk factors that may affect the
Transaction are set forth in the section entitled “Risk Factors” in
the Proxy Statement. Additional information about economic,
competitive, governmental, technological and other factors that may
affect Xeris is set forth in Item 1A, “Risk Factors,” in Xeris’
2020 Annual Report on Form 10-K, which has been filed with the SEC,
the contents of which are not incorporated by reference into, nor
do they form part of, this communication. Additional information
about economic, competitive, governmental, technological and other
factors that may affect Strongbridge is set forth in Item 1A, “Risk
Factors,” in Strongbridge’s 2020 Annual Report on Form 10-K, which
has been filed with the SEC, the contents of which are not
incorporated by reference into, nor do they form part of, this
communication.
Any forward-looking statements in this
communication are based upon information available to Strongbridge
and/or its board of directors, as the case may be, as of the date
of this communication and, while believed to be true when made, may
ultimately prove to be incorrect. Subject to any obligations under
applicable law, none of Strongbridge or any member of its board of
directors undertakes any obligation to update any forward-looking
statement whether as a result of new information, future
developments or otherwise, or to conform any forward-looking
statement to actual results, future events, or to changes in
expectations. All subsequent written and oral forward-looking
statements attributable to Strongbridge or its board of directors
or any person acting on behalf of any of them are expressly
qualified in their entirety by this paragraph.
No Profit Forecast/Asset Valuations
No statement in this communication is intended
to constitute a profit forecast for any period, nor should any
statements be interpreted to mean that earnings or earnings per
share will necessarily be greater or lesser than those for the
relevant preceding financial periods for Strongbridge, Xeris or
HoldCo as appropriate. No statement in this communication
constitutes an asset valuation.
Statement Required by the Irish Takeover
Rules
The directors of Strongbridge accept
responsibility for the information contained in this communication.
To the best of the knowledge and belief of the directors of
Strongbridge (who have taken all reasonable care to ensure such is
the case), the information contained in this document for which
they respectively accept responsibility is in accordance with the
facts and does not omit anything likely to affect the import of
such information.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Irish
Takeover Rules, if any person is, or becomes, ‘interested’
(directly or indirectly) in 1% or more of any class of ‘relevant
securities’ of Strongbridge or Xeris, all ‘dealings’ in any
‘relevant securities’ of Strongbridge or Xeris (including by means
of an option in respect of, or a derivative referenced to, any such
‘relevant securities’) must be publicly disclosed by not later than
3:30 pm (New York time) on the ‘business’ day following the date of
the relevant transaction. This requirement will continue until the
date on which the Scheme becomes effective or on which the ‘offer
period’ otherwise ends. If two or more persons cooperate on the
basis of any agreement, either express or tacit, either oral or
written, to acquire an ‘interest’ in ‘relevant securities’ of
Strongbridge or Xeris, they will be deemed to be a single person
for the purpose of Rule 8.3 of the Irish Takeover Rules.
Under the provisions of Rule 8.1 of the Irish
Takeover Rules, all ‘dealings’ in ‘relevant securities’ of
Strongbridge by Xeris or ‘relevant securities’ of Xeris by
Strongbridge, or by any party acting in concert with either of
them, must also be disclosed by no later than 12 noon (New York
time) on the ‘business’ day following the date of the relevant
transaction.
A disclosure table, giving details of the
companies in whose ‘relevant securities’ ‘dealings’ should be
disclosed, can be found on the Irish Takeover Panel’s website at
www.irishtakeoverpanel.ie.
‘Interests in securities’ arise, in summary,
when a person has long economic exposure, whether conditional or
absolute, to changes in the price of securities. In particular, a
person will be treated as having an ‘interest’ by virtue of the
ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in single quotation marks are defined in
the Irish Takeover Rules, which can also be found on the Panel’s
website. If you are in any doubt as to whether or not you are
required to disclose a dealing under Rule 8, please consult the
Panel’s website at www.irishtakeoverpanel.ie or contact the Panel
on telephone number +353 1 678 9020.
General
The release, publication or distribution of this
report in or into certain jurisdictions may be restricted by the
laws of those jurisdictions, including any Restricted Jurisdictions
(as defined in the Proxy Statement). Accordingly, copies of this
report and all other documents relating to the Transaction are not
being, and must not be, released, published, mailed or otherwise
forwarded, distributed or sent in, into or from any such Restricted
Jurisdictions. Persons receiving such documents (including, without
limitation, nominees, trustees and custodians) should observe these
restrictions. Failure to do so may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies involved in the proposed
transaction disclaim any responsibility or liability for the
violations of any such restrictions by any person.
PUBLICATION ON A WEBSITE
In accordance with Rule 19.9 of the Irish Takeover Rules, a copy
of this communication will be published on Xeris’ website at
www.xerispharma.com and on Strongbridge’s website at
www.strongbridgebio.com.
The content of any website referred to in this
communication is not incorporated into and does not form part of
this communication.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
SUCH JURISDICTION.
Contacts:
Corporate and Media RelationsElixir Health
Public RelationsLindsay Rocco+1
862-596-1304lrocco@elixirhealthpr.com
Investor RelationsSolebury TroutMike Biega+1
617-221-9660mbiega@soleburytrout.com
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