$58.3 Million in Net Revenue Versus $29.2 Million in Q3 2013; Cash, Cash Equivalents, and Investments Up at the End of Quarter to $89.5 Million
PHOENIX, AZ–(Marketwired – Nov 11, 2014) – Insys Therapeutics, Inc. (NASDAQ: INSY) today announced its financial results for the three- and nine- month periods ended September 30, 2014. Third quarter 2014 highlights include:
- Total net revenue increased to $58.3 million versus $29.2 million for the third quarter of 2013;
- Revenues from Subsys® (fentanyl sublingual spray) were $58.2 million, up 105% compared with third quarter 2013 sales of $28.4 million;
- Net income increased to $11.5 million, or $0.33 per basic and $0.31 per diluted share, compared to net income of $11.6 million, or $0.36 per basic and $0.34 per diluted share, for the third quarter of 2013;
- Non-GAAP adjusted net income grew to $0.63 per diluted share compared to $0.39 per diluted share for the third quarter of 2013; and,
- Cash, cash equivalents and investments increased by $14.2 million to $89.5 million as of September 30, 2014, compared to $75.3 million as of June 30, 2014.
“We are pleased to report another strong quarter, in which our revenue and gross profit doubled largely driven by the continued, successful execution of our Subsys strategy,” said Michael L. Babich, President and Chief Executive Officer. “We also made significant strides on multiple research and development programs. We are excited to advance four of these programs into late-stage clinical trials in 2015.
“Specifically, we will initiate pivotal Phase III clinical trials with three of our spray candidates: buprenorphine spray for acute pain, buprenorphine/ naloxone spray to treat opioid dependence, and ondansetron spray to treat nausea and vomiting. These three candidates address multi-billion dollar markets in which we believe patients’ needs could be better served through easy-to-administer, rapid-onset treatment via our proprietary delivery technology.
“We will also advance our pharmaceutical cannabidiol (CBD) candidate to treat Dravet Syndrome and Lennox-Gastaut Syndrome, two of the four indications for which it has U.S. Orphan Drug Designation. Following a Phase I dose-ranging study, we will initiate a Phase III clinical trial in Lennox-Gastaut and Dravet patients in 2015,” Babich concluded.
Third Quarter 2014 Financial Results
Total net revenue for the third quarter of 2014 was $58.3 million compared to $29.2 million for the third quarter of 2013, an increase of 100%. A summary of total revenue is outlined below (in millions):
|Three Months Ended
|Product sales, net|
|Dronabinol SG Capsule||0.1||0.8||(0.7||)|
|Total net revenue||$||58.3||$||29.2||$||29.1|
Gross margin was 90.8% for the third quarter of 2014 compared with 89.4% for the third quarter of 2013. The increase in gross margin was due primarily to a recent price increase taken for Subsys.
Sales and marketing expense was $15.1 million during the third quarter of 2014, compared to $8.0 million for the third quarter of 2013. As a percentage of revenue, sales and marketing expense decreased to 25.8% as compared with 27.3% in the third quarter of 2013.
Research and development expense increased to $7.0 million for the third quarter of 2014, compared to $1.7 million for the third quarter of 2013, primarily as a result of a pipeline development investment during 2014.
General and administrative expense increased to $10.8 million for the third quarter of 2014, compared to $4.3 million for the third quarter of 2013, primarily resulting from costs incurred in connection with various legal matters.
Income tax expense was $8.6 million for the third quarter of 2014, compared with $0.5 million in the prior year quarter, reflecting an effective corporate tax rate of 42.7%.
Net income for the third quarter of 2014 was $11.5 million, or $0.33 per basic and $0.31 per diluted share, compared to net income of $11.6 million, or $0.36 per basic and $0.34 per diluted share, for the third quarter of 2013. Non-GAAP adjusted net income for the third quarter of 2014 was $23.1 million, or $0.63 per diluted share, compared to non-GAAP adjusted net income of $13.3 million, or $0.39 per diluted share, in the prior year quarter. The reconciliation of net income to Non-GAAP adjusted net income is included at the end of this press release.
The Company had $89.5 million in cash, cash equivalents, and short-term and long-term investments, no debt, and $145.0 million in stockholders’ equity as of September 30, 2014.
- Insys received DEA approval to manufacture synthetically its CBD and was granted a quota to produce 15kg of CBD in 2014. The company expects a larger quota in 2015 for its continued clinical studies.
- Insys received a Refusal to File Letter from the FDA for its proprietary Dronabinol Oral Solution because it provided an incomplete pediatric study plan in its NDA submission. The Company subsequently submitted the pediatric study plan to the FDA. The Company intends to discuss the plan with the FDA, and to resubmit the NDA to the FDA thereafter.
- Insys filed an IND for its buprenorphine/naloxone for opioid dependence sublingual spray candidate in October 2014. This IND was cleared by the FDA in early November.
- Insys remains on track to file INDs for ondansetron sublingual spray to treat nausea and vomiting and CBD to treat Lennox-Gastaut Syndrome and Dravet Syndrome in the fourth quarter of 2014.
Insys management will host its third quarter conference call as follows:
A telephone replay will be available shortly after the completion of the call for two weeks at 800-633-8284 (U.S.) or 402-977-9140 (International). The conference call ID number for the replay is 21738685.
About Insys Therapeutics, Inc.
Insys Therapeutics is a specialty pharmaceutical company that develops and commercializes innovative drugs and novel drug delivery systems of therapeutic molecules that improve the quality of life of patients. Using our proprietary sublingual spray technology and our capability to develop pharmaceutical cannabinoids, Insys addresses the clinical shortcomings of existing commercial products. Insys currently markets two products, Subsys®, which is sublingual Fentanyl spray for breakthrough cancer pain, and a generic version of Dronabinol (THC) capsules. The Company’s lead product candidate is Dronabinol Oral Solution, a proprietary orally administered liquid formulation of dronabinol that Insys believes has distinct advantages over the current formulation of dronabinol in a soft gel capsule. Insys is developing a pipeline of sublingual sprays, as well as pharmaceutical cannabidiol.
Subsys® is a registered trademark of Insys Therapeutics, Inc.