Aratana Therapeutics Inc (fka PETX)

[TheFinalCD]

Today : Friday 5 August 2016 ARATANA THERAPEUTICS, INC. Charts.

LEAWOOD, Kan., Aug. 4, 2016 /PRNewswire/ -- Aratana Therapeutics, Inc. (NASDAQ: PETX), a pet therapeutics company focused on the licensing, development and commercialization of innovative biopharmaceutical products for companion animals, announced its second quarter 2016 financial and operational results. For the quarter ended June 30, 2016, Aratana reported net income of $21.2 million or $0.61 diluted net income per share, which includes $38 million in revenue from the collaboration, license, development and commercialization agreement with Elanco Animal Health, a division of Eli Lilly and Company.

"Our vision is to become a fully integrated company," stated Steven St. Peter, M.D., President and Chief Executive Officer of Aratana Therapeutics. "As our team celebrates significant development and regulatory milestones, we are pivoting to build our sales organization to support the launches of our approved therapeutics. At the same time, we continue to strive to access and advance additional innovative product candidates."

Recent Highlights

Continued execution on strategic collaboration with Elanco for GALLIPRANT® (grapiprant tablets). In April 2016, Aratana licensed to Elanco the animal health rights for Galliprant to develop, manufacture, market, and commercialize the product globally, and co-promote the product with Aratana in the United States. Aratana has received an upfront payment of $45 million and the Company is eligible to receive additional payments upon achievement of certain development, regulatory and sales milestones up to $83 million, in addition to royalty payments and co-promotion fees.

Granted FDA approval of ENTYCE® (capromorelin oral solution). The U.S. Food and Drug Administration's Center for Veterinary Medicine (CVM) approved Entyce for appetite stimulation in dogs in May 2016. Aratana intends to commercially launch Entyce in the United States in the first quarter of 2017 in conjunction with the North American Veterinary Conference and other major veterinary conferences.

Filed for FDA approval of NOCITA® (bupivacaine liposome injectable solution). Aratana submitted an administrative New Animal Drug Application (NADA) in June 2016 with the CVM for Nocita as a local post-operative analgesia for cranial cruciate ligament surgery in dogs. The Animal Drug User Fee Act (ADUFA) date for approval is August 28, 2016 and Aratana anticipates Nocita will be commercially available to veterinarians in the United States in the fall of 2016.

Initiated pivotal study of AT-003 in cats. In July 2016, Aratana started enrolling cats in the pivotal field effectiveness study of AT-003 for post-operative pain management in cats.

Initiated AT-014 field study in dogs. During April 2016, Aratana initiated a field safety study for AT-014, an investigational canine osteosarcoma vaccine licensed from Advaxis, Inc. Aratana anticipates United States Department of Agriculture (USDA) conditional licensure in late-2016 or shortly thereafter.

Continued progress with AT-016 in dogs. Aratana anticipates that VetStem Biopharma, Inc., its exclusive license partner responsible for development of AT-016 for dogs with osteoarthritis pain, will initiate the pivotal study of AT-016 in 2016. In addition, VetStem continues to make progress in advancing its manufacturing process.

Regained rights to AT-006. In May 2016, Aratana regained control of global rights to AT-006, an investigational therapeutic for feline herpes virus induced ophthalmic conditions. Aratana is planning to conduct an additional pilot study before advancing the product into the pivotal field effectiveness study.

Continued organizational evolution. Aratana appointed Brent Standridge as its Chief Operating Officer in June 2016, recently hired National Account Managers and Regional Sales Leaders, and has commenced the hiring process for approximately two dozen sales representatives.


Financial Results

The second quarter net income was $21.2 million or $0.61 diluted net income per share compared to a net loss of $8.0 million or $0.23 diluted loss per share for the corresponding quarter ended June 30, 2015. For the second quarter of 2016, the Company reported $38.0 million in net revenue from the $45.0 million payment received from the collaboration agreement with Elanco. The remaining $7.0 million is held on the balance sheet as a licensing and collaboration commitment. The second quarter revenues also include product sales of BLONTRESS® (Canine Lymphoma Monoclonal Antibody B-cell) and TACTRESS™ (Canine Lymphoma Monoclonal Antibody T-Cell). During the second quarter of 2015, the Company reported $230 thousand in net revenues from product sales. For the first six months of 2016, total revenues were $38.2 million versus $386 thousand for the same six month period in 2015.

Research and development expenses for the second quarter ended June 30, 2016 totaled $5.3 million compared to $6.1 million for the quarter ended June 30, 2015. For the first six months of 2016, research and development costs totaled $16.1 million as compared to $12.3 million for the corresponding six month period in 2015. The increase in the six month period was primarily due to the $6.2 million in regulatory milestones achieved for Galliprant, Entyce, Nocita and AT-016.

Selling, general and administrative expenses totaled $6.2 million for the second quarter ended June 30, 2016 compared to $4.9 million for the corresponding period in 2015. Selling, general and administrative expenses for the first six months of 2016 and 2015 totaled $12.7 million and $9.1 million, respectively. The increase was due to the continued investment in commercial activities to prepare for the launches of our approved products, as well as a credit of $1.2 million to reduce the fair value of contingent consideration to zero as a result of an agreement with the Vet Therapeutics, Inc. shareholders from the first quarter of 2015.

During the three months ended June 30, 2016, the Company also recorded an impairment charge of $2.8 million for acquired intangible assets related to updated sales expectations for Tactress and the decision to discontinue the development of AT-007 due to development program portfolio prioritization.

As of June 30, 2016, the Company had $109.9 million of cash

, cash equivalents, restricted cash and short-term investments. This represents an increase in cash of approximately $23 million from December 31, 2015, largely due to the upfront payment received from Elanco of $45 million. In the second half of 2016, including milestone payments of approximately $6.0 million and inventory build, the Company anticipates operating cash use of approximately $35.0 million.