Forward Pharma A/S (NASDAQ:FWP) (“We,” “Forward” or the “Company”
and, together with its subsidiaries, the “Group”), today reported
consolidated financial and operating results for the year ended
December 31, 2019. Our net loss for the year ended December 31,
2019 was $(4.2) million, or $(0.04) per share, versus a net loss of
$(8.7) million, or $(0.09) per share for the year ended December
31, 2018. Our research and development and general and
administrative costs decreased from $12.3 million for the year
ended December 31, 2018 to $5.3 million for the year ended December
31, 2019. “The operating results reported today favorably reflect
our persistent efforts to reduce costs and streamline our
operations. We are well positioned financially to the start of the
new year with significant cash reserves and working capital in
excess of $77 million. Our primary focus remains on our
intellectual property and we are working diligently to prepare for
the oral hearing before the Technical Board of Appeal on the
European EP2801355 patent to be held on June 18, 2020,” said Dr.
Claus Bo Svendsen, Chief Executive Officer of Forward.
Operating Results for the Year Ended December
31, 2019
Research and development costs for the years ended
December 31, 2019 and 2018 were $1.0 million and
$2.7 million, respectively. The decrease in research and
development costs for the year ended December 31, 2019 of
$1.7 million is the result of lower costs incurred in
connection with the EP2801355 patent (“‘355 Patent”) opposition in
Europe (“Opposition Proceeding”), lower share-based compensation
and the wind-down of our development efforts of FP187®.
General and administrative costs for the years ended
December 31, 2019 and 2018 were $4.2 million and
$9.5 million, respectively. The decrease in general and
administrative costs in the year ended December 31, 2019 of
$5.3 million resulted primarily from a decrease in legal and
accounting costs, lower patent advisory fees, lower share-based
compensation and an overall reduction in overhead costs.
During each of the years ended December 31, 2019 and 2018,
the Group recognized foreign exchange gains of $759,000 and
$2.7 million, respectively. The foreign exchange gains
resulted from the strengthening of the United States Dollar
compared to the Danish Kroner.
Other income for the years ended December 31, 2019 and 2018
were $303,000 and $644,000, respectively. Other income
primarily includes interest income from United States Dollar cash
deposits, net of bank fees.
Financial Position as of December 31, 2019
As of December 31, 2019, we have $77.6 million in cash and cash
equivalents and our working capital is $77.6 million. We believe we
have sufficient liquidity to allow us to meet our planned operating
activities in the normal course of business beyond the year ending
December 31, 2020. Unforeseen events could, however, negatively
affect our ability to fund planned operations in the future.
Update on Intellectual Property Proceedings
On January 29, 2018, the Opposition Division of the
European Patent Office (“EPO”) concluded the oral proceedings
concerning the ‘355 Patent. The Opposition Division revoked the
‘355 Patent after considering third-party oppositions from several
opponents. On March 22, 2018, the Opposition Division issued
its detailed reasons for the decision. On May 7, 2018, the Company
appealed the Opposition Division’s decision to the Technical Board
of Appeal of the EPO (“TBA”) and filed its detailed grounds of
appeal on August 1, 2018. On July 8, 2019, the Company received
notice from the EPO that the appeal will be heard by the TBA on
June 18, 2020. However, the hearing may be delayed as a result of
the ongoing novel coronavirus 2019 (“COVID-19”) pandemic and, if
the hearing is delayed, a new hearing date is currently unknown.
Management expects the TBA to issue a ruling on the same day as the
hearing with a fully-argued decision approximately two months
following the hearing.
If the Company receives a favorable ruling following the
hearing, it is expected that the TBA will remit the case to the
Opposition Division, in order for the Opposition Division to
resolve the remaining elements of the original opposition.
Management estimates that this process would take approximately two
to three years. However, delays can occur that would extend the
time needed for the Opposition Division to reach a conclusion on
the remaining elements of the original opposition. The Company is
not entitled to any royalty payments from the Settlement and
License Agreement by and among the Company and two wholly owned
subsidiaries of Biogen, Inc. (“License Agreement”) until and
unless all remaining elements of the original opposition are
resolved in the Company’s favor. As such, the earliest time the
Company may expect to receive any revenues from the License
Agreement, if at all, is 2023.
If the Company receives an unfavorable ruling following the
hearing, it would, for all practical purposes, represent an
unsuccessful outcome of the Opposition Proceeding, resulting in no
royalties being due to the Company from Biogen based on Biogen’s
future net sales outside the United States, as defined in the
License Agreement. The Company may request a rehearing of the June
18, 2020 hearing with the Enlarged Board of Appeal of the EPO in an
effort to overturn the unfavorable outcome, but the likelihood of
getting a rehearing is low. The denial of a request to rehear would
end the Opposition Proceeding in favor of the opponents.
Annual Report on Form 20-F
Investors are encouraged to read Forward’s Annual Report on Form
20-F that was filed today with the U.S. Securities and Exchange
Commission. Forward’s Annual Report includes important information
about the Group that is not disclosed herein including, but not
limited to, risk factors and our audited financial statements as of
December 31, 2019 and 2018 and for each of the years ended December
31, 2019, 2018 and 2017.
Forward Pharma A/S |
Condensed Consolidated Statement of Profit
or Loss |
|
|
(USD in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended |
|
December
31, |
|
|
|
2019 |
|
2018 |
|
|
Research and development
costs |
|
|
$(1,049) |
|
$(2,748) |
|
|
General and administrative costs |
|
|
(4,234) |
|
(9,535) |
|
|
Operating (loss) (1) |
|
|
(5,283) |
|
(12,283) |
|
|
|
|
|
|
|
|
|
|
Exchange rate gain, net |
|
|
759 |
|
2,713 |
|
|
Other finance income |
|
|
303 |
|
644 |
|
|
(Loss) before taxes |
|
|
(4,221) |
|
(8,926) |
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
|
- |
|
204 |
|
|
|
|
|
$(4,221) |
|
$(8,722) |
|
|
Net (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) per share, basic and diluted (2) |
|
|
$(0.04) |
|
$(0.09) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute net (loss)
per share basic and diluted (2) |
|
|
95,074 |
|
94,671 |
|
|
|
|
|
|
|
|
|
|
(1) Non-cash share-based compensation included in operating
expenses totaled $2.1 million for the year ended December 31, 2019
and $6.2 million for the year ended December 31, 2018.(2) Each
American Depositary Share (“ADS”) represented 2 ordinary shares
until December 6, 2019 when the ADS ratio was changed to 14
ordinary shares per each ADS. Per share information included herein
is computed based on one ordinary share.
Forward Pharma A/S |
|
|
Condensed Consolidated Statement of
Financial Position |
(USD in thousands) |
|
|
|
|
|
|
|
|
|
|
December
31, |
|
|
December
31, |
|
|
2019 |
|
|
2018 |
Assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$77,598 |
|
|
|
$82,542 |
Other assets |
|
|
|
567 |
|
|
|
|
|
790 |
Total assets |
|
|
|
|
$78,165 |
|
|
|
|
|
$83,332 |
|
|
|
|
|
|
Equity and Liabilities: |
|
|
|
|
|
Shareholders' equity |
|
$77,569 |
|
|
|
|
$82,214 |
Liabilities |
|
|
|
596 |
|
|
|
|
|
1,118 |
Total equity and liabilities |
|
|
|
|
$78,165 |
|
|
|
|
|
$83,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
About Forward Pharma: Forward Pharma
A/S is a Danish biopharmaceutical company that commenced
development in 2005 of a proprietary formulation of DMF for the
treatment of inflammatory and neurological indications. The
Company granted to Biogen an irrevocable license to all of its IP
through the License Agreement and received from Biogen a
non-refundable cash fee of $1.25 billion in February
2017, with the return of EUR 917.7 million to shareholders through
a capital reduction in September 2017. The Company has the
opportunity to receive royalties from Biogen on Biogen’s net sales
of Tecfidera® or other DMF products for multiple sclerosis
outside the U.S., dependent on, among other things, a favorable
outcome in Europe with respect to the Opposition Proceeding,
including any appeal thereto.
Our principal executive offices are located at Østergade 24A,
1st floor, 1100 Copenhagen K, Denmark and our American Depositary
Shares are publicly traded on the Nasdaq Capital Market (FWP). For
more information about the Company, please visit our website at
http://www.forward-pharma.com.
Forward Pharma A/S Investor Relations
Contact:
Forward Pharma A/S Claus Bo Svendsen, MD, PhD Chief Executive
Officer Investor Relations investors@forward-pharma.com
Solebury Trout John Graziano jgraziano@troutgroup.com +1 (646)
378 2942
Forward Pharma A/S
Forward Looking Statements:
Certain statements in this press release may constitute
“forward-looking statements” of Forward Pharma A/S within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to,
statements which contain language such as “believe,” “expect,”
“anticipate,” “estimate,” “would,” “may,” “plan,” and “potential.”
Forward-looking statements are predictions only, which involve
known and unknown risks, uncertainties and other factors that may
cause actual results to be materially different from those
expressed in such statements. Many such risks, uncertainties and
other factors are taken into account as part of our assumptions
underlying these forward-looking statements and include, among
others, risks related to the following: the satisfaction of certain
conditions, and the accuracy of certain representations of the
Company, in the License Agreement entered into with subsidiaries of
Biogen Inc. and certain other parties thereto; our ability to
obtain, maintain, enforce and defend issued patents with
royalty-bearing claims; our ability to prevail in or obtain a
favorable decision in the Opposition Proceeding, after all appeals;
the expected timing for key activities and an ultimate ruling in
such legal proceedings; the issuance and term of our patents;
future sales of Tecfidera®, including impact on such sales from
competition, generic challenges, regulatory involvement and pricing
pressures; the scope, validity and enforceability of our
intellectual property rights in general and the impact on us of
patents and other intellectual property rights of third parties;
our ability to defend our tax filing positions; and the sufficiency
of the Company's cash resources. Certain of these and other risk
factors are identified and described in detail in certain of our
filings with the United States Securities and Exchange Commission,
including our Annual Report on Form 20-F for the year ended
December 31, 2019. We are providing this information as of the date
of this release and do not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise.
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