Zyla Life Sciences Reports Third Quarter 2019 Financial Results
-- Positive net cash flow of $6.5 million for the quarter ended September 30, 2019 --
-- Net product sales grew to $22.4 million, an increase of 175% over the 2018 third quarter, due to the expanded product portfolio --
Nov 14, 2019
WAYNE, Pa., Nov. 14, 2019 /PRNewswire/ -- Zyla Life Sciences (OTCQX: ZCOR) ("Zyla" or the "Company"), a commercial-stage life sciences company, today reported financial results for the third quarter ended September 30, 2019, including net sales from commercial products: SPRIX® (ketorolac tromethamine) Nasal Spray, the SoluMatrix® products, VIVLODEX® (meloxicam), TIVORBEX® (indomethacin) and ZORVOLEX® (diclofenac)), INDOCIN® (indomethacin) suppositories, INDOCIN® oral suspension and OXAYDO® (oxycodone HCI, USP) tablets for oral use only –CII.
Zyla Life Sciences Logo. (PRNewsFoto/Zyla Life Sciences) (PRNewsfoto/ZYLA LIFE SCIENCES )
"With our expanded product portfolio, we had third quarter net product sales of $22.4 million, almost three times net product sales for the same period in 2018," said Todd Smith, president and chief executive officer of Zyla. "In the third quarter, we generated $6.5 million in net cash due to our product portfolio expansion, while maintaining similar operating expenses and commercial infrastructure. We continue to identify areas to increase efficiencies and improve our commercial impact."
Recent Event
The Company appointed Todd N. Smith as president, chief executive officer and a director, effective October 23, 2019.
2019 Third Quarter Financial Results
Cash Position: As of September 30, 2019, Zyla had cash and restricted cash totaling $19.0 million. Cash generated from operating activities for the three months ended September 30, 2019 was $6.8 million.
Net Product Sales: Net product sales were $22.4 million for the three months ended September 30, 2019 compared to $8.2 million for the three months ended September 30, 2018. The increase was largely due to the addition of the five acquired products at the end of January 2019.
Cost of Sales (excluding product rights amortization): Cost of sales was $10.4 million for the three months ended September 30, 2019 compared to $1.8 million for the three months ended September 30, 2018. The increase was driven by higher product sales as a result of the five new products acquired at the end of January 2019 and the revaluation of inventory in connection with the reorganization.
G&A Expenses: General and administrative expenses were $6.0 million for the three months ended September 30, 2019 compared to $5.6 million for the three months ended September 30, 2018. The increase was attributable to $0.4 million of higher administrative expense and $0.4 million of higher Food and Drug Administration fees related to products acquired during 2019, partially offset by a $0.4 million decrease in post-marketing study fees related to ARYMO® ER (morphine sulfate) extended-release tablets for oral use —CII which the Company discontinued in September 2018 and OXAYDO.
S&M Expenses: Sales and marketing expenses were $9.3 million for the three months ended September 30, 2019 compared to $7.9 million for the three months ended September 30, 2018. The $1.4 million increase was primarily attributable to $1.0 million of marketing programs for the acquired products and $0.4 million of other sales and marketing costs.
R&D Expenses: Research and development expenses were essentially zero for the three months ended September 30, 2019 compared to $1.0 million for the three months ended September 30, 2018. This decrease was driven by a discontinuation of R&D programs that did not directly support the growth of Zyla's commercial business.
Restructuring and Other Charges: There were no restructuring and other charges during the three months ended September 30, 2019. Restructuring and other charges of $13.9 million for the three months ended September 30, 2018 reflect costs related to the discontinuation of ARYMO ER of $8.2 million, a termination payment to Halo Pharmaceuticals of $3.1 million and legal fees related to the filing of the Company's Chapter 11 bankruptcy case of $2.6 million.
Interest Expense: Interest expense was $3.7 million for the three months ended September 30, 2019 compared to $32.9 million for the three months ended September 30, 2018. Interest expense for the three months ended September 30, 2019 includes non-cash interest and amortization of debt discount totaling $1.8 million. The interest expense for the three months ended September 30, 2018 includes non-cash interest and amortization of debt discount totaling $29.8 million and included the acceleration of the debt discounts due to the revaluation of these instruments due to the events of default.
Other Gain: Other gain was $1.1 million for the three months ended September 30, 2019 compared to $0.1 million for the three months ended September 30, 2018.
Net Loss: Net loss for the three months ended September 30, 2019 was $10.3 million compared to a net loss of $51.2 million for the three months ended September 30, 2018.
