Acerus Reports Second Quarter 2022 Financial Results

TORONTO, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Acerus Pharmaceuticals Corporation ("Acerus" or the "Company") (TSX: ASP; OTCQB: ASPCF) today reported its financial results for the three and six-month period ended June 30, 2022. Unless otherwise noted, all amounts are in US dollars and are prepared in accordance with International Financial Reporting Standards ("IFRS").

Recent Highlights

• Total Natesto^® prescriptions in the US rose 47% year-over-year in the second quarter of 2022 and were up approximately 23% sequentially over the fiscal 2022 first quarter
• The Company continues to finalize preparations for the re-launch of Noctivatm in the US, now anticipated to take place by the first quarter of 2023
• The rollout of Natesto^® remains on track, underscored by focused execution of the Company's growth strategy in the US
• During the second quarter, the Acerus shares began trading on the Toronto Stock Exchange after a previously-approved 1-for-200 share consolidation
• Additional non-dilutive financing of US$14.6 million from First Generation Capital, during and after the end of the second quarter, was secured to support the Company's operations and outlook
  

"I'm pleased to report that Acerus continued to show positive momentum this quarter, with all trends pointing to strong results for 2022 as a whole," said Edward Gudaitis, President and Chief Executive Officer of Acerus Pharmaceuticals. "Revenue rose significantly, as total Natesto^® prescriptions in the US climbed 47% year-over-year and 23% over the first quarter; demand appears to be accelerating, driven by our highly-effective sales staff as well as general growing interest in the efficacy of our products. In fact, Natesto^® is now the fastest-growing branded testosterone therapy in the market, which comes as no surprise to us.

"The activity of our salesforce is at all-time highs. The breadth of prescriptions also continues to increase, with the number of healthcare professionals writing Natesto^® scripts increasing by nearly 40% year-over-year. Overall, we remain on track with our strategic plan to accelerate the Company's market penetration and prepare for the re-introduction of Noctivatm in early 2023."

Summary of Results for the Three Months Ended June 30, 2022 (Q2-2022) compared to the Three Months Ended June 30, 2021 (Q2-2021), unless otherwise noted

Total revenue for the quarter was $0.75 million compared to $0.56 million in the prior-year period, reflecting the impact of prescription growth in the US, partially offset by increased rebates to carriers and pharmacy benefit managers.

Gross profit for the second quarter of 2022 was $0.3 million compared to $0.5 million in the prior-year period. The 2022 cost of goods sold included a charge of $0.3 million to write off all remaining raw material inventory related to Estrace^®.

Research and development ("R&D") expense rose by $1.3 million, to $2.2 million, for the current quarter from $0.9 million in the prior-year period, reflecting increased expense for NATESTO^® clinical trials in the US. As previously noted, this higher level of R&D is expected to continue for the next few quarters, after which the clinical trials should be complete. In addition, current quarter R&D included $0.2 million of expense to return Noctiva to active production.

Second quarter selling, general and administrative expense ("SG&A") declined by $1.4 million, to $4.9 million, from $6.3 million in the second quarter of 2021. Approximately $0.7 million of the decline reflects the write-off of accrued receivables related to Estrace^® in the prior-year period, with the remaining decrease largely due to higher-than-normal expense in 2021 tied to the terminated Aytu co-promotion agreement and subsequent launch of the Company's US growth strategy for NATESTO^®.

EBITDA¹ was a loss of $6.7 million in the second quarter of 2022 compared to a loss of $6.5 million in the prior-year period; Adjusted EBITDA¹ was a loss of $6.6 million in 2022 compared to a loss of $6.2 million in 2021.

The Company incurred a net loss of $7.9 million, or $(1.03) per share, for the quarter compared to a loss of $7.1 million, or $(0.92) per share, in the second quarter of 2021.

Cash as of June 30, 2022 was $1.3 million compared with $2.2 million as of December 31, 2021, reflecting $17.9 million of advances under a secured grid promissory note with First Generation Capital Inc., a company affiliated with the Chairman of the Board of Directors of Acerus ("First Generation"), offset by (i) $6.5 million to settle the prior senior secured loan facility with SWK, (ii) $10.7 million of cash used in operations; and (iii) $1.5 million for the acquisition of Serenity.

Subsequent to the end of the quarter, a further $10.0 million was advanced by First Generation, increasing the total balance on the First Generation facility to $47.9 million.

As previously noted in the Company's May 10, 2022 press release, Acerus will need to raise approximately $45-50 million over the next two years (after reflecting subsequent First Generation advances) to fund upfront fees and expand its sales force and marketing initiatives (including direct-to-consumer) designed to grow its existing Natesto^® business and resume Noctivatm production. 

COMPANY UPDATE AND OUTLOOK

Noctivatm
Acerus, along with its contract manufacturer, continue to execute on the restart and reintroduction of Noctiva to the US market, where it already has FDA approval. The rollout strategy for Noctivatm ? including all related marketing, distribution and production ? is expected to take until the end of the year, with a re-launch of the product anticipated in the first quarter of 2023. Acerus believes there is significant overlap in physician call points for Noctivatm with Natesto^®, and this synergy will allow for better utilization and productivity of both existing and anticipated new sales staff hires.

Natesto^®
The Company has been successful growing Natesto^® and remains focused on expanding in the US market. Total Natesto prescriptions rose 47% year-over-year in the second quarter, and the Company expects continued growth in prescriptions for the balance of 2022. 

Commercial preparations are in place for the Canadian reintroduction of Natesto^®, which has been somewhat hampered by manufacturing and supply chain disruptions. Market shipments are currently expected to resume in the third quarter.

As of June 30, 2022, Acerus and Amneal Pharmaceuticals mutually agreed to terminate their co-promotion agreement for Natesto^® in certain segments of the US market. The Company has resumed selling Natesto^® to the endocrinology segment using its dedicated sales force.

avanafil
Acerus is on track, working with Petros Pharmaceuticals, the licensor of avanafil to Acerus, and Sanofi to update the regulatory dossier for resubmission to Health Canada. Such resubmission is expected to be made by the end of 2022, with the anticipated introduction of avanafil to the Canadian market occurring in late 2023.

Conference Call
Shareholders are reminded that the conference call to discuss the Company's results for the second quarter will be held on August 9, 2022 at 10:00 a.m. Eastern Time.

To access the call live, please dial 416-340-2217 or 1-800-806-5484 and use access code 2534277#. Listeners are encouraged to dial in 10 minutes before the call begins to avoid delays. A replay of the conference call will be available until 11:59 p.m. Eastern Time on Tuesday, August 16, 2022 by dialing 905-694-9451 or 1-800-408-3053, using access code: 4369989#.

About Acerus
Acerus Pharmaceuticals Corporation is a specialty pharmaceutical company focused on the commercialization and development of innovative prescription products that improve patient experience, with a primary focus in the fields of Urology and Men's Health. The Company commercializes its products via its own salesforce in the United States and Canada, and through a global network of licensed distributors in other territories.

Acerus' shares trade on TSX under the symbol ASP and on OTCQB under the symbol ASPCF. For more information, visit www.aceruspharma.com and follow us on Twitter and LinkedIn.

¹ Non-IFRS Financial Measures - EBITDA and Adjusted EBITDA
The non-IFRS measures included in this press release are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. When used, these measures are defined in such terms as to allow the reconciliation to the closest IFRS measure. These measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from our perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Despite the importance of these measures to management in goal setting and performance measurement, we stress that these are non-IFRS measures that may have limits in their usefulness to investors.

We use non-IFRS measures, such as EBITDA and Adjusted EBITDA to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the valuation of issuers. We also use non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and to assess our ability to meet our future debt service, capital expenditure and working capital requirements.

The definition and reconciliation of EBITDA and Adjusted EBITDA used and presented by the Company to the most directly comparable IFRS measures follows below:

EBITDA is defined as net (loss)/income adjusted for income tax, depreciation of property and equipment, amortization of intangible assets, interest on long-term debt and other financing costs, interest income, licensing revenue and changes in fair values of derivative financial instruments. Management uses EBITDA to assess the Company's operating performance.

Adjusted EBITDA is defined as EBITDA adjusted for, as applicable, royalty expenses associated with triggering events, milestones, share based compensation, impairment of intangible asset, foreign exchange (gain)/loss, charges related to product recall and gain on extinguishment of payables. We use Adjusted EBITDA as a key metric in assessing our business performance when we compare results to budgets, forecasts and prior years. Management believes Adjusted EBITDA is an alternative measure of cash flow generation than, for example, cash flow from operations, particularly because it removes cash flow fluctuations caused by extraordinary changes in working capital. A reconciliation of net (loss)/income to EBITDA (and Adjusted EBITDA) is set out below.

Notice Regarding Forward-Looking Statements
Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties, including with respect to the commercial performance of NATESTO^® and Noctiva globally and in the U.S., and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 14, 2022 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.

Company Contact
[email protected]

Investor Relations Contact
Chris Witty
Acerus Investor Relations
(646) 438-9385
[email protected]