ATHLONE, Ireland -- Innocoll Holdings plc (Nasdaq:INNL), a global, commercial stage, specialty pharmaceutical company with late stage development programs targeting areas of significant unmet medical need announced financial and operating results for the three months and full year ended December 31, 2016. Innocoll manufactures and supplies a range of pharmaceutical products and medical devices using its proprietary collagen-based biodegradable and fully bioresorbable technology platform.
“In 2016, Innocoll successfully achieved milestones, but also faced challenges. On the one hand, XARACOLL achieved positive pivotal results in Phase 3 trials and we were able to substantially finalize the expansion of our manufacturing facility in Saal, Germany. On the other hand, COGENZIA did not achieve statistical significance in improving clinical cure in diabetic foot infections (DFI) and XARACOLL received the Refusal-to-File letter from the U.S. Food and Drug Administration (FDA)," said Tony Zook, Chief Executive Officer of Innocoll. “In February 2017, we attended a Type-A meeting with representatives of the FDA to review pathways forward following our receipt of the Refusal-To-File letter. During the meeting, we proposed a plan to conduct an additional short-term Pharmacokinetic study and several short-term non-clinical studies, which we believe will allow us to submit a revised NDA to the FDA by the end of 2017. If the formal minutes from the Type-A meeting, which we expect to receive at the end of this month, confirm that the FDA agrees with our plan, we would submit a revised NDA to the FDA soon after the completion of the additional studies, assuming adequate financing to commence the proposed studies, and further assuming positive results."
Innocoll plans to update investors with additional information about the outcome of its Type A meeting shortly after receiving formal written FDA minutes. In the interim, Innocoll intends to continue to explore strategic options to maximize value to its shareholders.
Fourth Quarter 2016 and Recent Updates
- Substantially finalized expansion of its Saal, Germany manufacturing facility.
- Following receipt of the XARACOLL Refusal to File Letter in December, 2016, in January 2017, Innocoll requested a Type A meeting with the FDA, which was held in late February 2017. At the meeting, management presented a plan for a path forward, including an additional short-term Pharmacokinetic study and several short-term non-clinical studies, which assuming FDA concurrence, adequate financing and further positive trial results, could enable Innocoll to submit a revised NDA for XARACOLL in the latter part of 2017.
Fourth Quarter 2016 Financial Results
Net Loss Attributable to Ordinary Shareholders: Innocoll reported a net loss attributable to ordinary shares of $3.8 million, or $0.13 per share, for the fourth quarter of 2016, compared to a loss of $7.7 million, or $0.33 per share for the fourth quarter of 2015.
Non-GAAP diluted loss excluding nonrecurring items was $7.6 million or $0.26 per share, for the fourth quarter of 2016, compared to a loss of $16.9 million or $0.72 per share, for the fourth quarter of 2015.
The weighted average number of ordinary shares outstanding increased from 23.5 million in the fourth quarter of 2015 to 29.7 million in the fourth quarter of 2016, primarily as a result of the follow-on public offering in the second quarter of 2016.
Revenues: Revenues were $0.6 million for the fourth quarter of 2016 as compared to $0.9 million for the fourth quarter of 2015. This decrease was primarily due to lower sales to EUSA Pharma of CollatampG®.
Research and Development (R&D) Expenses: R&D expenses were $4.7 million for the fourth quarter of 2016 as compared to $11.7 million for the fourth quarter of 2015. R&D expenses in the fourth quarter of 2016 included $3.7 million in external clinical research expenses, which was primarily driven by the finalization of our Phase 3 Cogenzia efficacy trials.
General and Administrative (G&A) Expenses: G&A expenses were $4.9 million for the fourth quarter of 2016 as compared to $6.1 million for the fourth quarter of 2015. Excluding stock-based compensation charges, G&A expenses for the fourth quarter of 2016 were $2.6 million as compared to $5.7 million for the fourth quarter of 2015. The decrease in G&A excluding stock-based compensation was primarily due to reduction in discretionary expenses and prior year expenses relating to the company’s re-domiciliation to Ireland.
Other Operating Income: Other operating income was $7.1 million for the fourth quarter of 2016 as compared to $10.9 million for the fourth quarter of 2015. Other income in the fourth quarter of 2016 consisted primarily of fair value income of warrants outstanding and foreign exchange gains, partially offset by accrued interest on the company’s existing loan with the European Investment Bank (EIB). Other income in the fourth quarter of 2015 consisted primarily of $9.7 million fair value income of warrants outstanding.
Full Year 2016 Financial Results
Net Loss Attributable to Ordinary Shareholders: Innocoll reported a net loss attributable to ordinary shareholders of $57.0 million, or $2.12 per share, for the year ended December 31, 2016, compared to a loss of $50.9 million, or $2.28 per share for the year ended December 31, 2015.
Non-GAAP diluted loss excluding nonrecurring items was $59.1 million or $2.20 per share, for the year ended December 31, 2016, compared to a loss of $42.8 million, or $1.92 per share, for the year ended December 31, 2015.
The weighted average number of ordinary shares outstanding increased from 22.3 million during the year ended December 31, 2015, to 26.9 million during the year ended December 31, 2016, primarily as a result of the follow-on public offering in the second quarter of 2016.
Revenues: Revenues were $4.4 million for the year ended December 31, 2016 as compared to $2.9 million for year ended December 31, 2015. This increase was primarily due to an increase in sales to EUSA Pharma of Collatamp G, our gentamicin implant for the treatment and prevention of post-surgical infection.
Research and Development (R&D) Expenses: R&D expenses were $38.7 million for the year ended December, 31 2016 as compared to $29.8 million for the year ended December 31, 2015. R&D expenses in the year ended December 31, 2016 included $34.8 million in external clinical research expenses, which was primarily due to the completion of our pivotal Phase 3 studies of XARACOLL and Cogenzia. R&D expenses are expected to significantly decrease going forward.
General and Administrative (G&A) Expenses: G&A expenses were $25.4 million for the year ended December 31, 2016 as compared to $19.7 million for the year ended December 31, 2015. Excluding stock-based compensation charges, G&A expenses for the year ended December 31 2016 were $16.9 million as compared to $15.7 million for the year ended December 31, 2015. The increase in G&A, excluding stock-based compensation, was primarily due to our continued infrastructure build out to support clinical programs and expenses related to the company’s re-domiciliation to Ireland.
Other Operating Income: Other operating income was $10.0 million for the year ended December 31, 2016 as compared to $1.6 million for the year ended December 31, 2015. Other income for the year ended December 31, 2016 consisted primarily of non-cash items due to the fair value income of warrants outstanding and foreign exchange gains, partially offset by accrued interest on the company’s existing loan with the EIB. Other expense for the year ended December 31, 2015 consisted primarily of foreign exchange gains of $5.6 million, partially offset by fair value expense of warrants outstanding of $4.0 million.
Cash Position
As of December 31, 2016, cash and cash equivalents totalled $15.8 million compared to $30.4 million as of September 30, 2016. For further financial information for the period ending December 31, 2016, please refer to the financial statements appearing at the end of this release.
In management's opinion, Innocoll's anticipated expenditures during the next 12 months to advance its current operations, including plans to conduct further studies to enable it to submit a revised NDA for XARACOLL and to develop CollaGUARD will be greater than the amount of its current cash and cash equivalents. The Company may not be able to generate revenues from the sale of XARACOLL until the end of 2018, if at all.
Innocoll's need for additional capital will vary depending on a variety of circumstances, including, for example, if it is required to conduct additional tests not currently contemplated, the level and timing of regulatory approval, as well as the extent to which it chooses to establish collaboration, co-promotion, distribution or other similar agreements for its products and product candidates. Moreover, changing circumstances may cause it to spend cash significantly faster than it currently anticipates, and it may need to spend more cash than currently expected because of circumstances beyond its control.
To the extent that Innocoll's capital resources are insufficient to meet its future operating and capital requirements, it will need to finance its cash needs through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements, or strategic alternatives.
About Innocoll Holdings plc
Innocoll is a global, specialty pharmaceutical company with late stage development programs that is dedicated to engineering better medicines to help patients get better. Its proprietary, biocompatible, and biodegradable collagen products are precision-engineered for targeted use. Applied locally to surgery sites, they are designed to provide a range of benefits. Its late stage product pipeline is focused on addressing a number of large unmet medical needs, including: XARACOLL for the treatment of postoperative pain and CollaGUARD (INL-003), a barrier for the prevention of post-surgical adhesions.
Innocoll's currently approved products include: CollaGUARD® (ex-US), COLLATAMP® G, SEPTOCOLL® E, REGENEPRO®, COLLACARE®, COLLEXA®, and ZORPREVA®, some of which are sold globally through strategic partnerships, including those with Takeda, EUSA Pharma, Biomet 3i and Biomet. All of its native collagen products — from extraction/purification of type-1 collagen through final delivery form — are manufactured at its certified, integrated plant in Saal, Germany.
For more information, please visit www.innocoll.com.
CollaRx®, Collatamp®, CollaGUARD®, Collieva®, CollaCare®, Collexa®, COGENZIA® LidoColl®, LiquiColl®, and XARACOLL® are registered trademarks, and CollaPress™, DermaSil™, Durieva™, and Zorpreva™ are trademarks of the company.