2019 Q4 Form 10-Q Financial Statement

#000143853319000036 Filed on October 30, 2019

View on sec.gov

Income Statement

Concept 2019 Q4 2019 Q3 2018 Q4
Revenue $46.69M $44.37M $43.77M
YoY Change 6.66% 9.01% 104116.67%
Cost Of Revenue $1.730M $1.513M $1.600M
YoY Change 8.13% 33.54% 36.75%
Gross Profit $44.96M $42.86M $42.17M
YoY Change 6.62% 8.31% 2.85%
Gross Profit Margin 96.3% 96.59% 96.34%
Selling, General & Admin $22.71M $29.78M $21.54M
YoY Change 5.43% 14.07% -3.84%
% of Gross Profit 50.51% 69.48% 51.08%
Research & Development $36.07M $33.22M $31.70M
YoY Change 13.79% 2.38% 62.65%
% of Gross Profit 80.23% 77.51% 75.17%
Depreciation & Amortization $5.290M $5.380M $4.880M
YoY Change 8.4% 12.08% 9.42%
% of Gross Profit 11.77% 12.55% 11.57%
Operating Expenses $63.90M $78.81M $48.76M
YoY Change 31.06% 3.3% -14.99%
Operating Profit -$28.17M -$34.44M -$4.985M
YoY Change 465.04% -3.22% -67.15%
Interest Expense -$11.65M -$4.547M -$2.370M
YoY Change 391.56% 79.51% -43.97%
% of Operating Profit
Other Income/Expense, Net -$2.060M -$2.576M -$2.470M
YoY Change -16.6% -86.09% -159.68%
Pretax Income -$30.23M -$37.01M -$7.455M
YoY Change 305.46% -31.59% -32.46%
Income Tax $32.00K -$523.0K $0.00
% Of Pretax Income
Net Earnings -$30.26M -$36.49M -$7.455M
YoY Change 305.89% -33.07% -57.69%
Net Earnings / Revenue -64.81% -82.23% -17.03%
Basic Earnings Per Share -$0.18
Diluted Earnings Per Share -$703.2K -$849.8K -$0.18
COMMON SHARES
Basic Shares Outstanding 42.96M shares 42.95M shares 41.25M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2019 Q4 2019 Q3 2018 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $271.9M $296.1M $311.3M
YoY Change -12.66% -15.61% 39.83%
Cash & Equivalents $62.44M $65.19M $102.9M
Short-Term Investments $209.5M $230.9M $208.5M
Other Short-Term Assets $6.400M $10.60M $5.900M
YoY Change 8.47% 89.29% -1.67%
Inventory $6.082M $5.264M $5.619M
Prepaid Expenses
Receivables $18.05M $16.80M $12.66M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $429.1M $439.7M $495.7M
YoY Change -13.44% -12.58% 52.14%
LONG-TERM ASSETS
Property, Plant & Equipment $2.891M $2.910M $3.146M
YoY Change -8.11% -12.43% -2.6%
Goodwill $936.0K $936.0K $936.0K
YoY Change 0.0% 0.0% 0.0%
Intangibles $157.2M $186.7M
YoY Change -15.8% 1.01%
Long-Term Investments $0.00 $0.00 $15.00M
YoY Change -100.0% -100.0%
Other Assets $14.71M $12.45M $7.709M
YoY Change 90.8% 68.44% 38.75%
Total Long-Term Assets $175.7M $174.1M $213.5M
YoY Change -17.68% -18.34% 9.74%
TOTAL ASSETS
Total Short-Term Assets $429.1M $439.7M $495.7M
Total Long-Term Assets $175.7M $174.1M $213.5M
Total Assets $604.8M $613.8M $709.2M
YoY Change -14.72% -14.29% 36.29%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $26.61M $13.83M $6.954M
YoY Change 282.71% 48.51% -63.28%
Accrued Expenses $51.75M $47.87M $49.70M
YoY Change 4.13% 10.44% 37.97%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $0.00 $22.50M
YoY Change -100.0% -100.0%
Total Short-Term Liabilities $95.45M $88.02M $104.6M
YoY Change -8.77% -11.87% 22.12%
LONG-TERM LIABILITIES
Long-Term Debt $204.9M $202.4M $195.1M
YoY Change 5.02% 4.98% 332.59%
Other Long-Term Liabilities $20.89M $21.49M $17.55M
YoY Change 19.09% 339.86% 609.75%
Total Long-Term Liabilities $20.89M $21.49M $17.55M
YoY Change 19.09% 339.86% 609.75%
TOTAL LIABILITIES
Total Short-Term Liabilities $95.45M $88.02M $104.6M
Total Long-Term Liabilities $20.89M $21.49M $17.55M
Total Liabilities $383.6M $367.9M $390.9M
YoY Change -1.87% -7.37% 72.05%
SHAREHOLDERS EQUITY
Retained Earnings -$416.4M -$386.2M -$270.0M
YoY Change 54.23% 47.08% 51.99%
Common Stock $636.9M $631.0M $589.8M
YoY Change 7.99% 8.28% 25.01%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $221.2M $246.0M $318.3M
YoY Change
Total Liabilities & Shareholders Equity $604.8M $613.8M $709.2M
YoY Change -14.72% -14.29% 36.29%

Cashflow Statement

Concept 2019 Q4 2019 Q3 2018 Q4
OPERATING ACTIVITIES
Net Income -$30.26M -$36.49M -$7.455M
YoY Change 305.89% -33.07% -57.69%
Depreciation, Depletion And Amortization $5.290M $5.380M $4.880M
YoY Change 8.4% 12.08% 9.42%
Cash From Operating Activities -$4.490M -$14.12M -$3.570M
YoY Change 25.77% 262.05% 315.12%
INVESTING ACTIVITIES
Capital Expenditures -$3.980M -$4.220M -$3.860M
YoY Change 3.11% 9.61% 31.29%
Acquisitions
YoY Change
Other Investing Activities $5.560M $8.680M -$44.94M
YoY Change -112.37% -105.5% -1682.39%
Cash From Investing Activities $1.580M $4.460M -$48.80M
YoY Change -103.24% -102.76% 44263.64%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 90.00K -740.0K 520.0K
YoY Change -82.69% -100.32% -62.04%
NET CHANGE
Cash From Operating Activities -4.490M -14.12M -3.570M
Cash From Investing Activities 1.580M 4.460M -48.80M
Cash From Financing Activities 90.00K -740.0K 520.0K
Net Change In Cash -2.820M -10.40M -51.85M
YoY Change -94.56% -115.88% -13062.5%
FREE CASH FLOW
Cash From Operating Activities -$4.490M -$14.12M -$3.570M
Capital Expenditures -$3.980M -$4.220M -$3.860M
Free Cash Flow -$510.0K -$9.900M $290.0K
YoY Change -275.86% 19700.0% -86.06%

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DESCRIPTION OF BUSINESS<div style="line-height:120%;padding-bottom:8px;padding-top:16px;font-size:12pt;"><span style="font-family:Arial;font-size:12pt;color:#006ebf;font-style:normal;font-weight:bold;text-decoration:none;">Organization and Description of Business</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:4px;text-align:justify;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Retrophin, Inc. (“we”, “our”, “us”, “Retrophin” and the “Company”) refers to Retrophin, Inc., a Delaware corporation, as well as our direct and indirect subsidiaries. Retrophin is a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare diseases. We regularly evaluate and, where appropriate, act on opportunities to expand our product pipeline through licenses and acquisitions of products in areas that will serve patients with rare diseases and that we believe offer attractive growth characteristics.</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:12px;font-size:10.5pt;"><span style="font-family:Arial;font-size:10.5pt;color:#666666;font-style:italic;font-weight:bold;text-decoration:none;">Product Candidate Development Activities:</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:4px;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Sparsentan</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;font-style:italic;">,</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> also known as RE-021, is an investigational product candidate with a dual mechanism of action, a potent angiotensin receptor blocker (“ARB”) and selective endothelin receptor antagonist (“ERA”), with in vitro selectivity toward endothelin receptor type A. Sparsentan is currently being evaluated in two pivotal Phase 3 clinical studies in the following indications:</span></div><table cellpadding="0" cellspacing="0" style="padding-top:12px;padding-bottom:4px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"/><td/></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:9.5pt;padding-left:24px;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#4c4c4c;font-weight:bold;">•</span></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Focal segmental glomerulosclerosis ("FSGS") is a rare kidney disease characterized by proteinuria where the glomeruli become progressively scarred. FSGS is a leading cause of end-stage renal disease.</span></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:12px;padding-bottom:4px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"/><td/></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:9.5pt;padding-left:24px;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#4c4c4c;font-weight:bold;">•</span></div></td><td style="vertical-align:top;"><div style="line-height:120%;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Immunoglobulin A nephropathy ("IgAN") is an immune-complex-mediated glomerulonephritis characterized by hematuria, proteinuria, and variable rates of progressive renal failure. IgAN is the most common primary glomerular disease.</span></div></td></tr></table><div style="line-height:120%;padding-bottom:8px;padding-top:12px;text-align:justify;font-size:10.5pt;"><span style="font-family:Arial;font-size:10.5pt;color:#666666;font-style:italic;font-weight:bold;text-decoration:none;">The Company has three approved products:</span></div><table cellpadding="0" cellspacing="0" style="padding-top:4px;padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"/><td/></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:9.5pt;padding-left:24px;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">•</span></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Chenodal (chenodiol tablets) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal has been the standard of care for cerebrotendinous xanthomatosis ("CTX") patients for more than three decades and the Company is currently pursuing adding this indication to the label.</span></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:4px;padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"/><td/></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:9.5pt;padding-left:24px;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">•</span></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Cholbam (cholic acid capsules) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders.</span></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:4px;padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"/><td/></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:9.5pt;padding-left:24px;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">•</span></div></td><td style="vertical-align:top;"><div style="line-height:120%;text-align:justify;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Thiola (tiopronin tablets) is approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria. On June 28, 2019, the Company </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">announced that the U.S. Food and Drug Administration ("FDA") approved 100 mg and 300 mg tablets of THIOLA EC</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">™</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> (tiopronin), a new enteric-coated formulation of THIOLA® (tiopronin), to be used for the treatment of cystinuria.</span></div></td></tr></table><div style="line-height:120%;padding-bottom:8px;padding-top:12px;font-size:10.5pt;"><span style="font-family:Arial;font-size:10.5pt;color:#666666;font-style:italic;font-weight:bold;text-decoration:none;">Cooperative Research and Development Agreements ("CRADAs"):</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:4px;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">The Company is a participant in two CRADAs, which form a multi-stakeholder approach to pool resources with leading experts, and incorporates the patient perspective early in the identification and development process. Retrophi</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">n has partnered with the </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">National Institutes of Health’s National Center for Advancing Translational Sciences ("NCATS")</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> and leading patients advocacy organization, NGLY1.org and </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">Alagille Syndrome Alliance ("ALGSA")</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">, aimed at the identification of potential small molecule therapeutics for NGLY1 deficiency, and Alagille syndrome respectively, diseases with no approved treatment options.</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:12px;font-size:10.5pt;"><span style="font-family:Arial;font-size:10.5pt;color:#666666;font-style:italic;font-weight:bold;text-decoration:none;">Changes in Development Activities:</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:4px;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">In August 2019, the Company announced that the Phase 3 FORT Study evaluating the safety and efficacy of fosmetpantotenate compared to placebo in patients with pantothenate kinase-associated neurodegeneration ("PKAN") did not meet its primary endpoint and did not demonstrate a difference between treatment groups. The study also did not meet its secondary endpoint. The Company will not proceed with further development of fosmetpantotenate for PKAN.</span></div><div style="line-height:120%;padding-bottom:8px;padding-top:4px;font-size:9.5pt;"><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">In August 2019, following a strategic review of the CNSA-001 program in patients with phenylketonuria ("PKU"), the Company made the decision to decline to exercise its option to acquire Censa Pharmaceuticals and accordingly discontinue its joint development program for CNSA-001.</span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> The Company impaired the related </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$15 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> long term investment during the third quarter of 2019.</span></div><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">During the first quarter of 2019, the Company elected to discontinue development of the L-UDCA program, resulting in impairment of the intangible asset of </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$25.5 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">, originally recorded in 2016, and the related </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$18.0 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> in contingent liability. This resulted in a net </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$7.5 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> non-cash charge to first quarter operations. In June 2016, the Company acquired certain rights to its product candidate L-UDCA for </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$0.5 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> cash. At the same time the Company established a related non-cash asset of </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$25.5 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> and liability of </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$25.0 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> for IPR&amp;D and contingent consideration (deferred financing) related net sales royalties and milestones. As a result of our quarterly valuation update process during 2016 and 2017, the contingent liability was decreased by </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$2.3 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> and </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$5.7 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;">, respectively, and increased by </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$1.0 million</span></span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"> during 2018. The resulting balance of the L-UDCA contingent liability at December 31, 2018 was </span><span style="font-family:Arial Narrow;font-size:9.5pt;color:#000000;"><span>$18.0 million</span></span>.
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