TIDMAMYT
RNS Number : 0941L
Amryt Pharma PLC
17 April 2018
17 April 2018
AIM: AMYT
ESM: AYP
AMRYT PHARMA PLC
("Amryt" or the "Company")
The biopharmaceutical company focused on rare and orphan
diseases
Final Results
For the 12 months to 31 December 2017
Key Points
CONTINUING STRONG PROGRESS
Financial
-- Revenues increased to EUR12.8m (2016: EUR1.4m)
- driven by growth of Lojuxta drug sales
-- Cash balances totalled EUR20.5m at 31 December 2017 (2016:
EUR8.3m), with EUR10m undrawn from the European Investment
Bank facility
-- Successful equity placing raised EUR15m (gross) in October
2017
-- Gross profit margin increased to 58% (2016: 57%)
Operational
-- Sales of Lojuxta, a drug which treats a rare, life-threatening
cholesterol disease, Homozygous Familial Hypercholesterolaemia
("HoFH"), grew strongly
- first full year's contribution of EUR11.9m compared to
EUR0.8m for one month in December 2016
- first distribution agreement signed in November 2017 -
covers the Kingdom of Saudi Arabia
- a further four distribution agreements were signed in
Q1 2018
-- Pivotal Phase III EASE trial commenced in March 2017 - investigating
AP101 as a potential treatment for Epidermolysis bullosa
("EB"), a rare skin disorder that can cause skin to blister
and tear at the slightest touch
-- In response to physician interest, Amryt is also now evaluating
other dermatological indications for AP101, where there
is high unmet medical need and which relate to the European
Medicine Agency's existing approval for AP101
-- Senior Management Team enhanced further by new appointments
Post Period
-- Amryt granted access to data from Amicus Therapeutics's
landmark EB trial (ESSENCE) - a remarkable sharing of data.
As a result, Amryt is now making modest refinements to its
protocol for its Phase III EASE trial, with the aim of increasing
the probability of success for the study
- interim analysis is expected to be completed in Q4 2018,
with read out of top-line data expected in Q2 2019
-- In-licensing agreement for a gene-therapy platform technology
signed with University College Dublin in March 2018
- technology uses a novel gene delivery mechanism and the
focus of potential application is on patients with a sub-type
of EB
- pre-clinical studies are to commence, with initial results
planned for Q4 2018
Joe Wiley, CEO of Amryt, said:
"Amryt made very strong progress both financially and
operationally in 2017. The dramatic increase in revenues to
EUR12.8m reflected a full year's contribution from sales of
Lojuxta, which is used to treat the rare, life-threatening
cholesterol disorder, HoFH. We remain in a very good position to
expand Lojuxta sales further, having secured a number of
distribution agreeements across our licensed territories, including
Eastern Europe and the Middle East.
"2017 marked a milestone for our lead development asset, AP101,
as we commenced our pivotal Phase III trial, EASE, in March. This
study is investigating AP101 as a potential treatment for EB, the
rare and distressing genetic skin disorder. We are now refining the
study's protocol after being granted remarkable access to Amicus
Therapeutics's trial data, which read-out in September 2017. This
very generous decision by Amicus Therapeutics allows us the
opportunity to increase the chances of our study's success and we
now expect interim analysis to be completed in Q4 2018, with read
out of top-line data expected in Q2 2019.
"We continue to expand the Company's growth opportunities, and
Amryt remains well positioned to continue to make significant
progress in 2018."
Enquiries:
Amryt Pharma plc +353 (1) 518 0200
Joe Wiley, CEO
Rory Nealon, CFO/COO
Shore Capital +44 (0) 20 7408 4090
Nomad and Joint Broker
Edward Mansfield, Mark Percy, Daniel
Bush
Davy +353 (1) 679 6363
ESM Adviser and Joint Broker
John Frain, Anthony Farrell
Stifel +44 (0) 20 7710 7600
Joint Broker
Jonathan Senior, Ben Maddison
WG Partners +44 (0)20 3705 9321
Nigel Barnes, Nigel Birks, Chris
Lee
KTZ Communications +44 (0) 20 3178 6378
Katie Tzouliadis, Irene Bermont-Penn,
Emma Pearson
About Amryt Pharma plc
(www.amrytpharma.com)
Amryt Pharma is a specialty biopharmaceutical company focused on
developing and delivering innovative new treatments to help improve
the lives of patients with rare or orphan diseases.
The Company holds an exclusive licence to sell Lojuxta
(lomitapide) for adults, across the European Economic Area, Middle
East and North Africa, Switzerland, Turkey and Israel. Lojuxta is
used to treat a rare life-threatening disease called Homozygous
Familial Hypercholesterolaemia ("HoFH"). HoFH impairs the body's
ability to remove LDL cholesterol ("bad" cholesterol) from the
blood, which typically results in extremely high blood LDL
cholesterol levels, leading to aggressive and premature narrowing
and blocking of arterial blood vessels. If left untreated, heart
attack or sudden death may occur in childhood or early
adulthood.
Amryt's lead drug candidate, AP101, is currently in Phase III
clinical trials as a potential treatment for Epidermolysis bullosa
("EB"). EB is a rare and distressing genetic skin disorder, which
causes exceptionally fragile skin. There is currently no approved
treatment and the global market opportunity for EB is estimated to
be in excess of EUR 1.3 billion.
Amryt has two earlier stage assets, AP102 and AP103. AP102 is
focused on developing novel, next generation somatostatin analogue
("SSA") peptide medicines for patients with rare neuroendocrine
diseases, where there is a high unmet medical need, including
acromegaly and Cushing's disease. AP103 is an in-licensed new gene
therapy platform, which has potential applicability across a range
of genetic disorders, including for patients with a sub-type of EB,
Recessive Dystrophic Epidemolysis bullosa.
CHAIRMAN AND CEO'S STATEMENT
Introduction
We are pleased to present the annual report and consolidated
financial statements of Amryt Pharma plc for the year ended 31
December 2017.
The financial results for the year ended 31 December 2017
comprise the results of the consolidated Group. By contrast, the
financial results for 2016 comprise the results of Amryt
Pharmaceuticals DAC ("Amryt DAC") for the period from 1 January
2016 to 18 April 2016 and those of the new consolidated Group from
19 April 2016 to 31 December 2016. This reflects the reverse
takeover of Fastnet Equity plc by Amryt DAC on 18 April 2016, the
subsequent name change to Amryt Pharma plc and the re-admission of
the shares to trading on AIM and ESM.
Following Birken AG's acquisition by the Group in 2016, it was
renamed Amryt AG in 2017. All references in the notes to the
accounts to Amryt AG relate to the entity that was formerly called
Birken AG.
Our Business
Amryt is a commercial stage pharmaceutical company focused on
acquiring, developing and delivering innovative new treatments that
help improve the lives of patients with rare and orphan diseases.
The Group has built a diverse portfolio of assets to treat patients
with rare and orphan diseases through the acquisition of its AP101
and AP102 assets in April 2016, the in-licencing of Lojuxta in
December 2016 and the in-licencing of a gene therapy platform in
March 2018. The Group continues to review new opportunities and the
Board is active in seeking to expand the Group's commercial product
portfolio.
Performance Highlights
Since the reverse takeover on 18 April 2016, the Group has made
excellent progress and 2017 was a very strong year for Amryt which
places us in a good position to be able to drive further expansion
throughout 2018 and beyond.
Some of the highlights of the Group's performance in 2017 and in
2018 to date are as follows:
-- Total revenues for the year increased to EUR12.8m (2016:
EUR1.4m)
-- Revenues from Lojuxta increased to EUR11.9m in 2017 compared
to EUR0.8m in December 2016
-- Gross profit margin increased to 58% in 2017 (2016: 57%)
-- Cash balance at 31 December 2017 was EUR20.5m (2016: EUR8.3m)
with EUR10m undrawn from the European Investment Bank ("EIB")
facility
-- Successful equity placing in October 2017 raised gross
funds of EUR15m
-- One new distribution agreement signed in 2017 and a further
four agreements signed in the current financial year to
date
-- Lead development asset, AP101, continued to make significant
progress
-- Additional market opportunities for AP101 in partial thickness
wound indications are currently under evaluation
-- In-licencing deal signed in March 2018 with University
College Dublin for exciting non-viral gene therapy platform
technology, which offers potential treatments for patients
with Epidermolysis bullosa ("EB") (AP103)
-- Expansion of key personnel - Amryt now has in place an
exceptionally strong leadership team with the necessary
commercial, regulatory and medical infrastructure also
in place
Operational Highlights
Lojuxta
LOJUXTA (lomitapide) is a drug used to treat a rare
life-threatening disease called Homozygous Familial
Hypercholesterolaemia ("HoFH"). HoFH is a life threatening disorder
that impairs the body's ability to remove LDL cholesterol ("bad"
cholesterol) from the blood. This typically results in extremely
high blood LDL cholesterol levels leading to aggressive and
premature narrowing and blocking of arterial blood vessels
manifesting as cardiovascular disease. If left untreated, heart
attack or sudden death may occur in childhood or early adulthood.
Lojuxta is approved in Europe to treat adults with HoFH.
With the completion of the Lojuxta in-licencing deal in December
2016, Amryt is now a commercial pharmaceutical company, generating
sales across Europe, the Middle East and other licenced
territories. Amryt's Lojuxta business has grown significantly in
the 13 months since December 2016, with sales for the year growing
to EUR11.9m (2016: EUR0.8m). This growth was underpinned by strong
demand from existing markets within Amryt's licenced territories.
In particular, the Group has experienced positive momentum in
negotiations regarding the levels of national reimbursement from
certain countries and also an increase in individual named
patients, who access funding for treatment on a 'named patient'
basis in those countries where there is no national reimbursement
agreement.
Future sales growth will be driven by existing markets and from
new territories. Since November 2017, Amryt has agreed five new
distributor relationships, which together cover seventeen new
countries. The Group is actively negotiating the initiation of
reimbursement from the UK, France, Spain and Turkey and we are
optimistic that some of these discussions will conclude
successfully during the course of 2018. If successful, these
market-access decisions will allow Amryt to provide access for a
cohort of HoFH patients in these territories, which should result
in accelerated growth for the business. We have ambitious plans for
the remainder of 2018 and we look forward to announcing a series of
agreements in the months to come.
Lead development asset - AP101 (Oleogel-S10)
AP101 (Oleogel-S10) is being developed as a prescription
medicine for Epidermolysis bullosa ("EB"), for which there are
severely limited treatment options. EB is a rare genetic skin
disorder that leads to exceptionally fragile skin, and children
with the disorder are often referred to as "Butterfly Children".
AP101 is currently in an investigational global Phase III clinical
trial for this indication; however, it has already been approved in
Europe for use in the treatment of partial thickness wounds ("PTW")
in adults.
The Group has continued to make strong progress with its lead
development asset, AP101, as a new potential treatment for EB. In
February 2017, Amryt was granted a patent in Japan for AP101. This
followed key patents grants for AP101 in Europe and the US in 2016.
In March 2017, Amryt completed discussions with both the Food and
Drug Administration ("FDA") and the European Medicines Agency
("EMA") regarding the design of its pivotal Phase III clinical
trial for AP101 in EB. Subsequently, on 27 March 2017, we commenced
the pivotal Phase III clinical trial, EASE (Efficacy and safety of
AP101 in patients with EB), to examine AP101's efficacy for EB
patients. The first patient was enrolled to EASE in April 2017.
Amicus Therapeutics granted Amryt detailed access to the data
from its landmark ESSENCE trial of SD101 in EB, which read out in
September 2017. Based on the insights from these data, Amryt
management is now able to refine its protocol for the Group's
ongoing global Phase III EASE study of AP101, with the potential to
increase the probability of success for the study. The Group is
currently in the process of amending the protocol for the EASE
study and will discuss any significant changes with the FDA and the
EMA. These amendments include a modest increase in the size of the
study from 164 to 192 patients and a restriction on certain wound
types, the ultimate goal of which is to increase the chances of
success in the study. Interim analysis is now expected to be
completed in Q4 2018, with read out of top-line data expected in Q2
2019.
Exciting future indications for AP101
AP101 was approved by the EMA in Europe in January 2016 for the
treatment of PTW in adults. This followed three positive Phase III
studies of 280 patients in grade II burns and split thickness skin
graft donor sites. Amryt has recently received interest from
physicians to study AP101 in various PTW indications also with high
unmet medical need. In response to this interest, the Group is
evaluating new life cycle opportunities for AP101.
Dermatological conditions currently under consideration
include:
-- Toxic Epidermal Necrolysis Syndrome (TENS)(including Stevens-Johnson
Syndrome (SJS))
-- Bullous Pemphigoid
-- Pemphigus Vulgaris
-- Grade III/IV radiotherapy and chemotherapy induced dermatitis
The scope of the current EMA approval for AP101 may offer the
opportunity to launch AP101 in some of these indications in Europe.
Early indications suggest that collectively these indications of
TENS/SJS, radiotherapy and chemotherapy induced dermatitis, and
bullous pemphigoid and pemphigus vulgaris may have a market
potential greater than the EB opportunity that the Group is
currently investigating in its EASE Phase III study.
Management intends to file applications for orphan designation
for some of these new potential orphan indications in the USA,
Europe and Japan and believes that there is significant scope to
maximise the value of this existing asset through either a global
multi-orphan strategy or via the current EMA marketing approval to
secure long term growth.
Strategic Developments since Year End
In March 2018, Amryt reached an exclusive agreement to
in-licence a new platform technology for gene therapy with
potential applicability across a range of genetic disorders. The
technology has been in-licenced from University College Dublin
("UCD") and involves the delivery of gene therapy using Highly
Branched Poly (<BETA>-Amino Ester) ("HPAE") polymer
technology. The initial focus of development efforts to date has
been in the area of EB and preliminary data suggests that the
treatment could be potentially disease-modifying for patients with
Recessive Dystrophic Epidermolysis Bullosa ("RDEB"). Pre-clinical
data in a xenograft model has shown significant levels of collagen
VII in the skin post therapy. Patients with RDEB have a defect in
their gene coding for collagen VII, consequently the replacement of
collagen VII could be transformative for these patients.
Potential competitors working in the area of gene therapy in EB
are mostly working with viral vectors to deliver collagen VII to
the cell. The patented technology which Amryt has exclusively
licenced from UCD involves the use of a novel gene delivery
mechanism using HPAE polymer technology. If successful, this will
eliminate the requirement for viruses as delivery vectors and
provides a potential competitive advantage to Amryt.
Amryt intends to conduct various pre-clinical studies in the
coming months and intends to report initial results in Q4 2018. If
successful, this platform has the potential to be applicable in
other dermatological conditions and possibly beyond.
The name assigned to this development project is 'AP103'.
Corporate and Financial
Revenues for the year to 31 December 2017 totalled EUR12,778,000
(2016: EUR1,351,000). Lojuxta generated revenues of EUR11,924,000.
Revenues from Imlan, our derma-cosmetics range of products,
amounted to EUR830,000 and revenues generated from consulting fees
amounted to EUR24,000. In 2016, the Lojuxta revenues are for the
period from the completion date of the Licence Agreement with
Aegerion Pharmaceuticals Inc ("Aegerion") on 2 December 2016 to 31
December 2016 and totalled EUR775,000. Imlan revenues for the
period from 19 April to 31 December 2016 amounted to
EUR571,000.
The operating loss before finance expense for the year ended 31
December 2017 amounted to EUR14,207,000, of which research and
development expenses amounted to EUR10,564,000. This included
depreciation and amortisation of EUR257,000 and non-cash share
based payments of EUR565,000. It compares to an operating loss
before finance expense for the year ended 31 December 2016 of
EUR7,683,000 which included reverse takeover and acquisition
related costs of EUR1,838,000, depreciation and amortisation of
EUR194,000 and non-cash share based payments of EUR229,000.
Excluding depreciation, amortisation and once off reverse takeover
and acquisition costs, the operating loss before finance costs for
the year ended 31 December 2017 would have been EUR13,385,000
(2016: EUR5,422,000).
The loss on ordinary activities before taxation of EUR26,136,000
includes EUR11,104,000 relating to a current non-cash movement on
contingent consideration that arose as part of the acquisition of
Amryt AG in 2016. The fair value of this contingent consideration
was initially determined by discounting the contingent amounts
payable to their present value at the date of acquisition. The
discount component is being unwound as a current non-cash financing
charge in the Statement of Comprehensive Income over the life of
the obligation. This current non-cash financing charge of
EUR11,104,000 represents the discount component being unwound to
the Statement of Comprehensive Income during 2017.
As at 31 December 2017, the Group had cash on hand of EUR20.5m.
On 2 December 2016, Amryt entered into a five year EUR20m debt
facility agreement with the EIB. The first tranche of EUR10m was
drawn down on 3 April 2017. In October 2017, the Company completed
an equity fundraising resulting in gross proceeds of EUR15m (net
proceeds: EUR14.3m).
Board and Senior Management Changes
Amryt is led by an experienced senior management team which has
been enhanced further in 2017 by the appointment of a number of
senior managers.
In March 2017, the Group appointed David Allmond as Chief
Commercial Officer. David has over 20 years' experience in the
pharmaceutical industry in commercial roles. He joined the Company
from Aegerion where he was President of EMEA and, in particular,
involved in the commercialisation of Lojuxta. Prior to Aegerion,
David was Corporate Vice President of Global Marketing for Celgene
Corporation where he played a pivotal role in defining strategy for
in-line brands, lifecycle/pipeline prioritisation and providing
commercial direction for business development. He was previously
responsible for EMEA marketing and market access within Celgene.
Prior to that, he was Director of Sales and Marketing Effectiveness
at Amgen Ltd.
In June 2017, the Group appointed Kieran Rooney, Ph.D., as Vice
President of Strategic Alliances and Licencing. Before joining
Amryt, he headed a pharmaceutical consulting company, Halo
BioConsulting, focusing on business alliances and management
consulting. Prior to that, Kieran worked as a consultant for the UK
Government and held business development roles at companies
including Smith & Nephew, F2G Limited, Pharsight Corporation,
and MDS Pharma Services. Kieran is responsible for planning and
executing an integrated global business development strategy and
has over 25 years of experience in the biopharmaceutical industry,
with significant expertise in business development and commercial
strategy.
In December 2017, the Group appointed Patrick Jordon as
Vice-President of Global Distributor Markets. Patrick has worked in
the pharmaceutical industry for the last 18 years, during which
time he held senior positions in Pfizer and Merck & Co.
("MSD"). He has significant experience across sales, marketing,
business development and general management and has been based in a
number of global territories. Latterly, Patrick was the Managing
Director of MSD's Saudi operations and before that served as MSD's
Regional Managing Director of its Eastern Europe and North Africa
business.
Amryt now has in place an exceptionally strong leadership team
with the necessary commercial, regulatory and medical
infrastructure also in place in Europe. Our strategy is to leverage
this capacity to seek to in-license more commercial stage assets,
which we are actively pursuing.
Having served on Amryt's Board for approximately a year, Cathal
Friel stepped down from the Board of Directors effective from 28
March 2017. Cathal was one of the original founders of Fastnet
Equity plc and facilitated the reverse takeover of Fastnet Equity
plc and creation of Amryt in April 2016.
Future Developments and Outlook
The Group achieved significant milestones in 2017 and we remain
confident of continuing significant progress over 2018.
We are very positive about the growth prospects for our Lojuxta
business. Lojuxta revenues in 2017 exceeded management's
expectations for the period and we believe that there is a
significant opportunity to further grow revenues especially with
material, untapped opportunities in our licenced territories. This
will be a major focus for us over the coming quarters.
The Phase III clinical trial, EASE, for our lead asset, AP101,
has commenced. The results of our interim analysis on EASE are due
in Q4 2018 and will provide an assessment of the progress of our
study by an independent data safety monitoring board. We are
optimistic in this regard and, should the interim analysis be
positive, expect to report top-line data Q2 2019.
We are also very excited about the interest from physicians to
study AP101 in various PTW indications with high unmet medical
need. The Group will continue to evaluate these opportunities in
2018.
Our new in-licencing agreement is an attractive opportunity for
Amryt to be involved in the area of gene therapy, which is one of
the most exciting and potentially transformative areas of medicine
today. If successful, this platform has the potential to be broadly
applicable in other dermatological conditions and possibly
beyond.
In the meantime, Amryt will continue to seek to in-license
further commercial stage assets to continue to grow our revenues
and provide cash resources that will help support these development
assets. Amryt has made excellent operational and strategic progress
to date and we look forward to reporting on further progress as we
continue to develop the business.
Harry Stratford Joe Wiley
Non-executive Chairman CEO
16 April 2018 16 April 2018
OPERATIONS REVIEW
Lojuxta
In December 2016, Amryt was delighted to reach an agreement with
Aegerion, a NASDAQ-listed biopharmaceutical company, for the
exclusive rights to sell Aegerion's drug, Lojuxta in certain
territories. These territories comprise the EEA, Middle East and
MENA, Switzerland, Turkey and Israel and our exclusive licence
became effective on 2 December 2016. As anticipated, the licence
agreement has been immediately cash generative for Amryt.
Lojuxta is used to treat a rare life-threatening disease called
HoFH and was approved in the EU in late 2013. Current treatment
options include statin drugs, PCSK9 inhibitors and apheresis (a
blood filtration technique similar to dialysis). However, they are
not adequate to control LDL cholesterol levels in some patients,
particularly those with the most severe genetic mutations. HoFH was
historically estimated to occur in about 1 in 1,000,000 people
worldwide although more recent studies suggest it may affect up to
1 in 300,000 people. Amryt believes that there is significant
potential for the drug to become a mainstay treatment for patients
with HoFH. Lojuxta is currently licenced for use in adults and as
part of the post approval commitments with the EMA we will be
conducting a paediatric study that if successful could extend the
label to children also.
Licence Agreement Terms
Under the terms of our licence agreement, Amryt has the
exclusive right to sell Lojuxta across its licenced territories in
return for which Amryt will:
-- make royalty payments to Aegerion, paid quarterly, based
on a percentage of net sales during a calendar year. The
royalty percentage is currently 18% of net sales of the
product less than US$15,000,000 and 20% of net sales more
than US$15,000,000. This royalty may increase to 20% and
22% respectively in the event that the marketing authorisation
is formerly transferred to Amryt;
-- make once-off commercial milestone payments, subject to
achieving certain sales targets. A one-off milestone payment
of US$1,000,000 is due the first time that aggregate net
sales in a calendar year equals US$20,000,000 with a further
one-off US$1,500,000 milestone payment due on reaching
US$30,000,000 net sales in a calendar year; and
-- take on the ongoing regulatory and post-marketing obligations
and commitments in support of Lojuxta as above.
Our licence agreement has an initial term until 1 January 2024
and Amryt may, at its own discretion, extend the licence agreement
for a further five years, with the right to extend in further five
year periods thereafter.
2017 Revenue and Plans
For the 12 months ended 31 December 2017, Lojuxta generated
revenues of EUR11,924,000 (2016: EUR775,000 for the month of
December 2016). This growth arose from strong demand in existing
markets in our territories, in particular, 2017 experienced
positive momentum in the reimbursement position in certain
countries and also an increase in "named patient" sales.
Future growth will be driven by existing markets and also
through expansion into new territories. Since November 2017, the
Group has completed five new distributor relationships, covering 17
countries:
-- In November 2017, Amryt signed a distributorship agreement,
with Faisal Musaed El Seif Saudi Pharmaceutical Company
("El Seif"), for Amryt's products in the Kingdom of Saudi
Arabia ("Saudi Arabia"). El Seif, an affiliate of El Seif
Development Company, is a leading distributor of medical
devices and pharmaceuticals in Saudi Arabia and has a strong
presence in the rare and orphan diseases drug sector. Amryt
estimates that there are currently in excess of 150 patients
with HoFH in Saudi Arabia. The agreement with El Seif covers
AP101 in anticipation of a successful conclusion of the
Phase III clinical trials.
-- In January 2018 Amryt signed an exclusive distributor agreement
for Lojuxta in Switzerland. The agreement is with RCC Pharma
AG, a leading Swiss pharmaceutical company with expertise
in early access programs in rare and orphan diseases. The
Company currently estimates that there are approximately
15 patients with HoFH in Switzerland. It has received requests
from clinicians for access to Lojuxta for Swiss patients
and this agreement will now enable Amryt to respond more
effectively to such requests.
-- In January 2018, Amryt also signed an exclusive distribution
agreement covering Central and Eastern Europe with GryNumber
Health, one of the leading healthcare consultancy and distribution
companies in the region. The agreement covers Austria,
Croatia, Czech Republic, Estonia, Finland, Hungary, Latvia,
Poland, Slovakia, and Slovenia. Amryt estimates that there
are approximately 100 patients with HoFH in these countries.
-- Amryt signed a further exclusive distribution agreement
in January 2018 covering Romania and Bulgaria with Romastru
Trading SRL, a Bucharest pharmaceutical services company,
part of Pharaon Healthcare Europe, a conglomerate which
provides a wide range of services, including medical, market
research and distribution.
-- In March 2018, Amryt announced that it has further expanded
its market coverage for Lojuxta with an exclusive distribution
agreement for Lebanon, Jordan and Syria. The agreement
is with Pharaon Healthcare-Droguerie Mercury S.A.L., one
of the leading full-service distributors in the region.
The Group estimates that there are approximately 40 patients
with HoFH in the countries covered by this agreement.
The Group has now established the commercial, medical and
regulatory infrastructure required to support the commercialisation
of Lojuxta across our licenced territories using affiliates, third
party consultants and distributors. This infrastructure can also be
leveraged to support additional products such as AP101 if approval
is received from the regulatory authorities, and other products
that may be acquired or in-licenced in the future.
AP101 (Oleogel-S10)
Amryt's lead product, AP101, received marketing approval for the
treatment of partial-thickness wounds ("PTW") from the European
Commission in January 2016. In Q1 2017, we completed discussions
with the FDA and EMA regarding the design of our pivotal Phase III
clinical trial for AP101 (Efficacy and Safety of Oleogel-S10 in EB,
the "EASE Study") as a potential treatment for EB and on 27 March
2017, commenced a pivotal Phase III trial, EASE, to examine AP101's
safety and efficacy.
EB is a chronic and debilitating condition for which there is
currently no approved product and significant unmet medical need.
All forms of the disorder are considered serious and the most
severe are disfiguring and cause intense suffering. The patient
advocacy group, Debra International, estimates that there are
approximately 500,000 people living with EB worldwide, with some
30,000 in Europe. The Department of Dermatology at Stanford
University estimates that there are 25,000 people living with EB in
the US. The combined US and European market for the treatment of EB
is estimated by management to be in excess of EUR1.3 billion.
AP101 has already demonstrated encouraging preliminary data in
EB in a Phase 2a clinical trial completed in 2011. In addition,
three successful Phase III clinical studies in the broad PTW
indication have been conducted with AP101. In each of these
studies, AP101 successfully demonstrated faster healing in both
recent wounds and chronic wounds compared with standard of care
therapy. Amryt commenced a single Phase III pivotal study in EB in
March 2017 which aims to demonstrate efficacy specifically in EB, a
condition that also causes partial thickness wounds.
Clinical trials update
In March 2017, the Group commenced the pivotal Phase III
clinical trial, EASE, to examine AP101's efficacy for EB patients.
Adult and paediatric patients with EB are being enrolled into a
randomised double blind placebo controlled trial. The proportion of
patients with completely healed target wounds within 45 days will
be evaluated as the primary endpoint. Secondary endpoints include
the time to achieve wound healing and changes in pain and pruritus
(itch).
In March 2018, Amicus Therapeutics granted Amryt detailed access
to the data from its landmark ESSENCE trial of SD101 in EB, which
read out in September 2017. Based on insights from these data,
Amryt management is now able to refine its protocol for the Group's
ongoing global Phase III (EASE) study of AP101, with the potential
to increase the probability of success for the study.
The Group is currently in the process of amending the protocol
for the EASE study and will discuss any significant changes with
the FDA and the EMA. These amendments include a modest increase in
the size of the study from 164 to 192 patients and a restriction on
certain wound types.
Based on the analysis of the Amicus Therapeutics data, the Group
will maintain the current primary endpoint which is the proportion
of patients with first complete closure of the target EB wound
treated with AP101 versus placebo within 45 days of treatment. The
exclusion of EB Simplex patients for the EASE study will help to
ensure that patients with likely faster spontaneous healing rates
will not be included in the study and is expected to increase the
likelihood of demonstrating a statistically significant treatment
effect.
These changes will result in a slight delay of the interim
analysis which the Company expects will be complete in early Q4
2018. Assuming a positive interim analysis, the Group expects read
out of top-line data from our AP101 Phase III study in Q2 2019. The
incremental cost of these changes is expected to be approximately
EUR1m. The unblinded interim analysis will be conducted by an
independent data-safety-monitoring-board and will result in three
possible outcomes:
-- continue the study with no change to sample size, which
would reflect conditional statistical power of at least
80% or better;
-- increase the number of patients in the study to maintain
an 80% conditional statistical power;
-- or discontinue the study for futility.
The unblinded interim analysis read out potentially represents a
significant milestone for the Group.
In 2017, the Group agreed with the regulatory authorities to
conduct some further non-clinical studies in parallel with this
Phase III study. In 2018, various non-clinical studies, requested
by the FDA as part of an investigational new drug ("IND") filing to
open clinical trial sites in the USA, have recently been
successfully completed. No safety signals or concerns were noted
from the preliminary data and the Company is now hopeful that the
combination of these studies, and safety data from patients
enrolled to date in non-US EASE study sites, will enable it to
request an IND to open trial sites in the USA, which it anticipates
will be in Q3 2018.
Extended patents and regulatory approvals
In January 2016, we secured approval from the EMA for the use of
AP101 in the European Union for the treatment of all PTWs. We
subsequently secured a European method of use patent for the
treatment of PTW in March 2016 and obtained a US method of use
patent for the treatment of EB in September 2016. In February 2017,
Amryt was granted a patent in Japan by the Japanese Patent Office
for AP101 for the treatment of EB. All these patents expire in
2030.
Future indications for AP101 asset
Amryt has recently received interest from physicians to study
AP101 in various PTW indications also with high unmet medical need.
In response to this interest, the Group is evaluating new life
cycle opportunities for AP101. Dermatological conditions under
consideration include:
-- Toxic Epidermal Necrolysis Syndrome (TENS)(including Stevens-Johnson
Syndrome (SJS))
-- Bullous Pemphigoid
-- Pemphigus Vulgaris
-- Grade III/IV radiotherapy and chemotherapy induced dermatitis
Toxic Epidermal Necrolysis Syndrome (TENS) (including
Stevens-Johnson Syndrome (SJS)) is a rare, acute, serious and
potentially fatal skin reaction in which there is sheet-like skin
and mucosal loss. Amryt has recently agreed to facilitate a
compassionate use protocol in this area, which may generate
valuable data in the coming quarters. One of the most common
effects of radiation or chemotherapy is acute skin reaction that
ranges from a mild rash to severe ulceration. Approximately 10% of
patients treated with radiation therapy will experience severe skin
reaction resulting in grade III/IV wounds.
The scope of the current EMA approval for AP101 may offer the
opportunity to launch AP101 in some of these indications in Europe.
Early indications suggest that collectively these indications of
TEN/SJS, radiotherapy and chemotherapy induced dermatitis, and
bullous pemphigoid and pemphigus vulgaris may have a market
potential greater than the EB opportunity which the Group is
currently investigating in its EASE Phase III study.
AP102
AP102 is an early stage drug asset, which may represent a novel,
next generation somatostatin analogue ("SSA") peptide medicine for
patients with rare neuroendocrine diseases, where there is a high
unmet medical need, including acromegaly. Acromegaly is a rare
endocrine disorder in which the body produces excessive growth
hormone, leading to abnormal growth throughout the body over
time.
In November 2016, we secured orphan drug designation for AP102
from the FDA. The FDA's Orphan Drug Designation program provides
orphan status to drugs and biologics that are being developed to
address rare diseases or disorders that affect fewer than 200,000
people in the United States. With orphan designation, AP102
qualifies for various incentives, including tax credits for
qualified clinical trials and market exclusivity upon regulatory
approval.
In February 2017, we received positive results from a
pre-clinical study that compared AP102 with pasireotide, an
approved product for treating patients with resistant acromegaly.
Significantly, AP102 did not demonstrate the potential to cause
diabetes, an observation which, if replicated in clinical studies,
could be clinically beneficial in treating acromegaly. Amryt's
study used a well-established diabetic rat model to examine whether
or not AP102 has an effect on glucose levels or on food/water
intake compared with controls. The study results showed that AP102
had no effect on either in diabetic rats compared with controls.
This indicates no impairment in glucose control in these diabetic
animals when treated with AP102. Throughout 2017, the Group
initiated and conducted various other pre-clinical studies. These
studies are ongoing and the Group expects to complete these
pre-clinical studies in 2018.
AP103 (Gene therapy platform)
In March 2018, Amryt completed a new exclusive in-licencing of a
new platform technology for gene therapy with potential
applicability across a range of genetic disorders. This technology
has been exclusively in-licenced from University College Dublin
("UCD") and involves the delivery of gene therapy using HPAE
polymer technology. The initial focus of development efforts to
date has been in the area of EB and preliminary data suggests that
the treatment could be potentially disease-modifying for patients
with Recessive Dystrophic Epidermolysis bullosa ("RDEB").
Pre-clinical data in a xenograft model has shown significant levels
of collagen VII in the skin post therapy. Patients with RDEB have a
defect in their gene coding for collagen VII, consequently the
replacement of collagen VII could be transformative for these
patients.
Potential competitors are working in the area of gene therapy in
EB are mostly working with viral vectors to deliver collagen VII to
the cell. The patented technology which Amryt has exclusively
licenced from UCD involves the use of a novel gene delivery
mechanism using HPAE polymer technology. If successful, this could
eliminate the requirement for viruses as delivery vectors and
provides a potential competitive advantage to Amryt. Amryt intends
to conduct various pre-clinical studies in the coming months and
will report initial results in Q4 2018.
Imlan
Amryt has a range of dermo cosmetic products that we acquired
with the Amryt AG transaction, which are sold under the Imlan
brand. Completely free of emulsifiers, preservatives, colorants and
fragrances and other additives or irritants, Imlan is marketed as a
treatment for sensitive, allergy-prone and dry skin. It is also
recommended for the basic care of eczema or psoriasis.
Revenues for the year ended 31 December 2017 amounted to
EUR830,000 compared to revenues of EUR571,000 in the period from
the acquisition of Amryt AG in April 2016 to 31 December 2016.
Concert Party
The Company has a concert party, the Amryt Concert Party, that
came into effect on admission of the Company's shares to trading on
AIM on 19 April 2016 ("Admission") . Details of the members of the
Amryt Concert Party can be found in part VIII of the Company's AIM
Admission document which is available on the Company's website:
https://www.amrytpharma.com/investors/circulars-and-admission-document/
The members of the Amryt Concert Party at the time of Admission
are still considered by the Panel to be acting in concert save that
Mr. Cathal Friel is no longer considered a constituent member of
the Amryt Concert Party.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
31 December 31 December
2017 2016
--------------------------------------------- ----- ------------ ------------
Note EUR'000 EUR'000
--------------------------------------------- ----- ------------ ------------
Revenue 12,778 1,351
Cost of sales (5,373) (586)
--------------------------------------------- ----- ------------ ------------
Gross profit 7,405 765
--------------------------------------------- ----- ------------ ------------
Administrative, selling and marketing
expenses (10,483) (4,037)
Share based payment expenses (565) (229)
Reverse takeover and acquisition related
costs - (867)
Non-cash deemed cost of reverse takeover - (971)
--------------------------------------------- ----- ------------ ------------
Total administrative, selling and marketing
expenses (11,048) (6,104)
Research and development expenses (10,564) (2,344)
--------------------------------------------- ----- ------------ ------------
Operating loss before finance expense (14,207) (7,683)
--------------------------------------------- ----- ------------ ------------
Non-cash change in fair value of contingent (11,104) -
consideration
Finance expense (825) (121)
--------------------------------------------- ----- ------------ ------------
Loss on ordinary activities before taxation (26,136) (7,804)
--------------------------------------------- ----- ------------ ------------
Tax on loss on ordinary activities - -
--------------------------------------------- ----- ------------ ------------
Loss for the year attributable to the
equity holders of the Company (26,136) (7,804)
--------------------------------------------- ----- ------------ ------------
Exchange translation differences which
may be reclassified through the profit
or loss 22 (5)
--------------------------------------------- ----- ------------ ------------
Total other comprehensive loss 22 (5)
--------------------------------------------- ----- ------------ ------------
Total comprehensive loss for the year
attributable to the equity holders of
the Company (26,114) (7,809)
--------------------------------------------- ----- ------------ ------------
Loss per share:
Loss per share - basic and diluted,
attributable to ordinary equity holders
of the parent (cent) 3 (11.72) (4.78)
Consolidated Statement of Financial Position
For the year ended 31 December 2017
31 December 31 December
2017 2016
EUR'000 EUR'000
-------------------------------------- ------------ ------------
Assets
Non-current assets
Intangible assets 52,606 52,521
Property, plant and equipment 1,160 1,183
Total non-current assets 53,766 53,704
--------------------------------------- ------------ ------------
Current assets
Trade and other receivables 4,729 2,540
Inventories 1,083 770
Cash and cash equivalents 20,512 8,271
Total current assets 26,324 11,581
--------------------------------------- ------------ ------------
Total assets 80,090 65,285
--------------------------------------- ------------ ------------
Equity and liabilities
Equity attributable to owners of the
parent
Share capital 21,173 20,419
Share premium 57,334 43,695
Other reserves (21,512) (22,079)
Accumulated deficit (35,109) (8,998)
--------------------------------------- ------------ ------------
Total equity 21,886 33,037
--------------------------------------- ------------ ------------
Non-current liabilities
Contingent consideration 32,418 23,314
Deferred tax liability 5,384 5,384
Long term loan 10,603 -
Total non-current liabilities 48,405 28,698
Current liabilities
Trade and other payables 9,799 3,550
--------------------------------------- ------------ ------------
Total current liabilities 9,799 3,550
--------------------------------------- ------------ ------------
Total liabilities 58,204 32,248
--------------------------------------- ------------ ------------
Total equity and liabilities 80,090 65,285
--------------------------------------- ------------ ------------
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
31 December 31 December
2017 2016
--------------------------------------------- ------------------ ------------
EUR'000 EUR'000
--------------------------------------------- ------------------ ------------
Cash flows from operating activities
Loss on ordinary activities before taxation (26,136) (7,804)
Finance expense 825 121
Depreciation and amortisation 259 194
Share based payment expense 565 229
Non-cash change in fair value of contingent 11,104 -
consideration
Non-cash deemed cost of reverse takeover - 971
Movements in working capital and other
adjustments:
Change in trade and other receivables (2,189) (1,975)
Change in trade and other payables 6,022 2,236
Change in contingent consideration (2,000) -
Change in inventories (313) (83)
Net cash flow used in operating activities (11,863) (6,111)
---------------------------------------------- ------------------ ------------
Cash flow from investing activities
Cash consideration on acquisition of
Amryt AG - (10,150)
Cash consideration on acquisition of
SOM - (89)
Cash inflow on acquisition of Amryt
AG - 705
Cash inflow on reverse takeover of Fastnet
Equity plc - 11,993
Payments for property, plant and equipment (243) (12)
Payments for intangible assets (87) -
Cash inflow on sale of property, plant
and equipment 9 10
Deposit interest received 5 1
Net cash flow (used in)/from investing
activities (316) 2,458
---------------------------------------------- ------------------ ------------
Cash flow from financing activities
Proceeds from issue of equity instruments
- net of expenses 14,393 11,251
Issue of convertible debenture securities - 545
Increase in long term debt 10,000 -
Repayment of short term loans (47) (47)
Net cash flow from financing activities 24,346 11,749
---------------------------------------------- ------------------ ------------
Exchange and other movements 74 4
---------------------------------------------- ------------------ ------------
Net change in cash and cash equivalents 12,241 8,100
Cash and cash equivalents at beginning
of year 8,271 171
---------------------------------------------- ------------------ ------------
Restricted cash at end of year 537 -
--------------------------------------------- ------------------ ------------
Cash at bank available on demand at
end of year 19,975 8,271
---------------------------------------------- ------------------ ------------
Total cash and cash equivalents at end
of year 20,512 8,271
---------------------------------------------- ------------------ ------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2017
Share Reverse Exchange
Share Share based Merger acquisition translation Accumulated
capital premium payment reserve reserve reserve deficit Total
reserve
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
--------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 1
January 2016 1 - - - - - (1,194) (1,193)
Loss for the
year - - - - - - (7,804) (7,804)
Foreign
exchange
translation
reserve - - - - - (5) - (5)
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Total
comprehensive
income - - - - - (5) (7,804) (7,809)
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Issue of shares
by Amryt DAC
on acquisition
of Amryt AG - 11,179 - - - - - 11,179
Issue of shares
by Amryt DAC
on acquisition
of SOM - 3,715 - - - - - 3,715
Issue of shares
by Amryt DAC
on conversion
of convertible
debenture
securities - 2,600 - - - - - 2,600
Issue of shares
on acquisition
of Amryt DAC 1,557 - - 35,818 - - - 37,375
Issue of
placing
shares - net
of costs 526 10,725 - - - - - 11,251
Issue of
placing
warrants - (2,251) 2,251 - - - - -
Share based
payments - - 229 - - - - 229
Reverse
acquisition
adjustment 18,335 17,727 1,735 - (62,107) - - (24,310)
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 31
December 2016 20,419 43,695 4,215 35,818 (62,107) (5) (8,998) 33,037
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 1
January 2017 20,419 43,695 4,215 35,818 (62,107) (5) (8,998) 33,037
Loss for the
year - - - - - - (26,136) (26,136)
Foreign
exchange
translation
reserve - - - - - 27 - 27
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Total
comprehensive
income - - - - - 27 (26,136) (26,109)
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Issue of
placing
shares - gross
of costs 754 14,329 - - - - - 15,083
Issue of
placing
shares - costs - (690) - - - - - (690)
Share based
payments - - 565 - - - - 565
Share based
payments
- lapsed - - (25) - - - 25 -
Balance at 31
December 2017 21,173 57,334 4,755 35,818 (62,107) 22 (35,109) 21,886
---------------- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Notes
1 General information
Amryt Pharma plc (the "Company") is a company incorporated in
England and Wales. Details of the registered office, the officers
and advisers to the Company are presented on the Company
Information page at the end of this report. The Company is listed
on the AIM market of the London Stock Exchange (ticker: AMYT.L) and
the Enterprise Securities Market of the Irish Stock Exchange
(ticker: AYP). Amryt is a development and commercial stage
pharmaceutical Company focused on acquiring, developing and
delivering innovative new treatments to help improve the lives of
patients with rare and orphan diseases.
2 Basis of preparation
The consolidated Financial Statements consolidate those of the
Company and its subsidiaries (together the "Group"). The
consolidated Financial Statements of the Group and the individual
Financial Statements of the Company have been prepared in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the EU and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
The financial information for the year ended 31 December 2017
does not constitute statutory accounts as defined by section 435 of
the Companies Act 2006 but is extracted from the audited accounts
for the year. The 31 December 2016 accounts, which relate to Amryt
Pharmaceuticals DAC, have been delivered to the Companies
Registration Office in Ireland. The 31 December 2017 accounts will
be delivered to Companies House within the statutory filing
deadline. The auditors have reported on those accounts. Their
report was unqualified and did not contain statements under Section
498 (2) of (3) of the Companies Act 2006.
Summary of Significant Accounting policies
Research and development expenses
Development costs are capitalised as an intangible asset if all
of the following criteria are met:
1. The technical feasibility of completing the asset so that it
will be available for use or sale;
2. The intention to complete the asset and use or sell it;
3. The ability to use or sell the asset;
4. The asset will generate probable future economic benefits and
demonstrate the existence of a market or the usefulness of the
asset if it is to be used internally;
5. The availability of adequate technical, financial and other
resources to complete the development and to use or sell it;
and
6. The ability to measure reliably the expenditure attributable to the intangible asset.
In process R&D acquired as part of a business combination is
capitalised at the date of acquisition. Research costs are expensed
when they are incurred.
The assessment whether development costs can be capitalized
requires management to make significant judgements. Management has
reviewed the facts and circumstances of each project in relation to
the above criteria and in management's opinion, the criteria
prescribed for capitalising development costs as assets have not
yet been met by the Group in relation to AP101 or AP102.
Accordingly, all of the Group's costs related to research and
development projects are recognised as expenses in the Consolidated
Statement of Comprehensive Income in the period in which they are
incurred. Management expects that the above criteria will be met on
filing of a submission to the regulatory authority for final drug
approval or potentially in advance of that on the receipt of
information that strongly indicates that the development will be
successful.
Revenue recognition
Revenue from the sale of goods is recognised in the Consolidated
Statement of Comprehensive Income when the significant risks and
rewards of ownership have been transferred to the buyer. Imlan
revenue is generally recorded as of the date of shipment,
consistent with typical ex-works shipment terms. For Lojuxta
revenues, the Group sells direct to customers and also uses third
parties in the distribution of the product to customers. Where the
shipment terms do not permit revenue to be recognised as of the
date of shipment, revenue is recognised when the Group has
satisfied all of its obligations to the customer in accordance with
the shipping terms. Revenue, including any amounts invoiced for
shipping and handling costs and excluding sales taxes, represents
the value of the goods supplied to external customers. Revenue is
recognised to the extent that it is probable that economic benefit
will flow to the Group, that risks and rewards of ownership have
passed to the buyer and the revenue can be reliably measured. No
revenue is recognised if there is uncertainty regarding recovery of
the consideration due at the outset of the transaction or the
possible return of goods.
Contingent consideration
Contingent consideration arising as a result of business
combinations is initially recognised at fair value using a
probability adjusted present value model. The fair value of the
contingent consideration is updated at each reporting date. The key
judgements and estimates applied by management in the determination
of the fair value of the contingent consideration relate to the
determination of an appropriate discount rate, the assessment of
market size and opportunity and probability assessments based on
market data for the chance of success of the commercialisation of
an orphan drug.
Acquired intangible assets
Acquired intangible assets outside business combinations are
stated at the lower of cost less provision for amortisation and
impairment or the recoverable amount. Acquired intangibles assets
are amortised over their expected useful economic life on a
straight line basis. In determining the useful economic life each
acquisition is reviewed separately and consideration given to the
period over which the Group expects to derive economic benefit.
Intangibles assets acquired in 2016 as part of the acquisitions
of Amryt AG and SomPharmaceuticals are currently not being
amortised as the assets are still under development.
3 Loss per share - basic and diluted
In the current year, the weighted average number of shares in
the loss per share ("LPS") calculation, reflects the weighted
average total actual shares of Amryt Pharma plc in issue at 31
December 2017.
In 2016, the weighted average number of shares in the LPS
calculation, reflects the legal subsidiary's, Amryt Pharmaceuticals
DAC ("Amryt DAC"), weighted average pre-combination ordinary shares
multiplied by the exchange ratio established in the acquisition,
and the weighted average total actual shares of the legal parent,
Amryt Pharma plc ("Amryt"), in issue after the date of
acquisition.
Issued share capital - ordinary shares of GBP0.01 each
Weighted
average
Number of shares shares
---------------------------------------------- ----------------- -------------
1 January 2016 58,075,221 55,638,866
---------------------------------------------- ----------------- -------------
18 April 2016 - Issue of shares by Amryt
DAC on acquisition of Amryt 37,048,622
18 April 2016 - Issue of shares by Amryt
DAC on acquisition of SOM 12,277,102
18 April 2016 - Issue of shares by Amryt
DAC on conversion of convertible debentures
securities 8,590,365
19 April 2016 - Issue of shares by Amryt
Pharma plc - share for share exchange on
acquisition of Amryt DAC B ordinary shares
(1) 7,503,786
19 April 2016 - Issue of shares by Amryt
Pharma plc - share consolidation 43,171,134
19 April 2016 - Issue of shares by Amryt
Pharma plc - share placing 41,673,402
---------------------------------------------- ----------------- -------------
31 December 2016 208,339,632 163,336,437
---------------------------------------------- ----------------- -------------
11 October 2017 - Issue of shares by Amryt
Pharma plc - share placing 66,477,651
31 December 2017 274,817,283 223,075,123
---------------------------------------------- ----------------- -------------
(1) As part of the 24 August 2015 share placing, Amryt DAC
issued B ordinary shares. These shares have not been included in
the pre-acquisition weighted average number of shares as they did
not carry rights to dividends or repayment of capital on the
winding up of Amryt DAC.
The calculation of loss per share is based on the following:
31 December 31 December
2017 2016
Loss after tax attributable to equity holders
of the Company (EUR'000) (26,136) (7,804)
Weighted average number of ordinary shares in
issue 223,075,123 163,336,437
Fully diluted average number of ordinary shares
in issue 223,075,123 163,336,437
------------------------------------------------- ------------ ------------
Basic and diluted loss per share (cent) (11.72) (4.78)
------------------------------------------------- ------------ ------------
Where a loss has occurred, basic and diluted LPS are the same
because the outstanding share options and warrants are
anti-dilutive. Accordingly, diluted LPS equals the basic LPS. The
share options and warrants outstanding as at 31 December 2017
totalled 42,842,882 (31 December 2016: 39,102,583) and are
potentially dilutive.
4 Business Combinations and Asset Acquisitions
Reverse Acquisition of Fastnet Equity Group plc by Amryt
Pharmaceuticals DAC
On 16 October 2015, Fastnet Equity plc ("Fastnet") signed
non-binding heads of terms with Amryt Pharmaceuticals DAC ("Amryt
DAC"), for the acquisition of Amryt DAC's entire issued and to be
issued share capital. The acquisition was completed on 18 April
2016 and on the same date Amryt DAC completed the acquisitions of
Amryt AG and SomPharmaceuticals ("SOM"), for consideration
satisfied by the issue of new ordinary shares in Amryt DAC. To
complete the acquisition of Amryt DAC a total of 123,495,095 new
ordinary shares of 1p in Fastnet were issued at an issue price of
24p per share ("Consideration Shares").
The acquisition by Fastnet of Amryt DAC has been treated for
accounting purposes as a reverse acquisition by Amryt DAC of
Fastnet. In a reverse acquisition, the cost of the business
combination is deemed to have been incurred by the legal subsidiary
(Amryt DAC) in the form of notional equity instruments issued to
the owners of the legal parent. The value of the notional shares is
calculated by reference to the proportion of shares that would be
needed to be issued by Amryt DAC to Fastnet if the old shareholder
base of Fastnet was to acquire the same percentage holding in Amryt
DAC as it received in the combined Group.
Acquisition of Amryt AG (previously "Birken")
Amryt DAC signed a conditional share purchase agreement to
acquire Amryt AG on 16 October 2015 ("Amryt AG SPA"). The Amryt AG
SPA was completed on 18 April 2016 with Amryt DAC acquiring the
entire issued share capital of Amryt AG. The consideration
comprises:
-- Initial cash consideration of EUR1,000,000 (paid by Amryt DAC
prior to its acquisition by the Company);
-- Milestone payments of:
o EUR10,000,000 on receipt of first marketing approval by the
EMA of Episalvan, paid on the completion date (18 April 2016);
o Either (1) EUR5,000,000 once net ex-factory sales of Episalvan
have been at least EUR100,000 or (ii) if no commercial sales are
made within 24 months of EMA first marketing approval (being 14
January 2016), EUR2,000,000 24 months after receipt of such
approval which was paid in January 2018 and EUR3,000,000 following
the first commercial sale;
o EUR10,000,000 on receipt of marketing approval by the EMA or
FDA of a pharmaceutical product containing Betulin as its API for
the treatment of Epidermolysis Bullosa;
o EUR10,000,000 once net ex-factory sales/net revenue in any
calendar year exceed EUR50,000,000;
o EUR15,000,000 once net ex-factory sales/ net revenue in any
calendar year exceed EUR100,000,000;
-- Cash consideration of EUR150,000, due and paid on the completion date (18 April 2016);
-- Royalties of 9% on sales of Episalvan products for 10 years from first commercial sale; and
-- Shares in Amryt DAC that equated to a 30% equity shareholding
prior to the acquisition of Amryt DAC by the Company. The Amryt AG
sellers received 37,048,622 in Consideration Shares (valued at
EUR11.2 million) for their shareholding in Amryt DAC.
Fair Value Measurement of Contingent Consideration
Contingent consideration comprises the milestone payments and
sales royalties detailed above. As at the acquisition date, the
fair value of the contingent consideration was estimated to be
EUR23,314,000. The fair value of the royalty payments was
determined using probability weighted revenue forecasts and the
fair value of the milestones payments was determined using
probability adjusted present values. The probability adjusted
present values took into account published orphan drug research
data and statistics which were adjusted by management to reflect
the specific circumstances applicable to the drugs acquired in the
Amryt AG transaction. A discount rate of 28.5% was used in the
calculation of the fair value of the contingent consideration and
this was sense checked by management against the implied rate of
return ("IRR") on the project. As noted earlier in the report the
size of the market for the products under development provides a
real opportunity to the Group to meet its forecast revenue targets
and therefore the milestone targets which underpin the contingent
consideration payments. At that time management anticipated that
AP101 for EB would be ready to launch in 2019. However, management
noted that due to issues outside their control (i.e. regulatory
requirements and the commercial success of the product) the timing
of when such revenue targets may occur may change. Such changes may
have a material impact on the assessment of the fair value of the
contingent consideration.
It is necessary to review the contingent consideration on a
regular basis as the probability adjusted fair values are being
unwound as financing expenses in the Statement of Comprehensive
Income over the life of the obligation. Contingent consideration is
reviewed on a bi-annual basis and is disclosed in the published
interim results for the 6 month period to 30 June and the year end
results to 31 December.
The total non-cash finance charge recognised in the Statement of
Comprehensive Income Statement for the year ended 31 December 2017
is EUR11,104,000. The Group is currently in the process of amending
the protocol for the EASE study and will discuss any significant
changes with the FDA and the EMA. These amendments include a modest
increase in the size of the study from 164 to 192 patients and a
restriction on certain wound types, the ultimate goal of which is
to increase the chances of success of the study. These changes will
result in a slight delay of the interim analysis which the Group
expects will be complete in Q4 2018, with read out of top-line data
from the AP101 Phase III study expected in Q2 2019. Consequently,
the launch date for EB and PTW has now been delayed to 1 July 2020.
Coupled with this, management has completed its annual forecast and
revenues have been amended to reflect current expectations. Both
these factors have resulted in a change to the probability weighted
revenue forecasts and the probability of the adjusted present
values which are used in the calculation of the contingent
consideration balance and impact the amount being unwound to the
Consolidated Statement of Comprehensive Income.
One milestone payment consisted of (i) EUR5,000,000 once net
ex-factory sales of Episalvan have been at least EUR100,000 or (ii)
if no commercial sales are made within 24 months of EMA first
marketing approval, EUR2,000,000 24 months after receipt of such
approval and EUR3,000,000 following the first commercial sale. No
commercial sales of Episalvan have been made since EMA first
marketing approval. However, if no commercial sales occur,
EUR2,000,000 is due for payment 24 months after the EMA first
marketing approval. The Group made this payment of EUR2,000,000 in
January 2018 and does not consider it to be contingent
consideration at year end. Consequently, at 31 December 2017
EUR2,000,000 is included in accruals, thereby reducing the
contingent consideration balance at 31 December 2017 from
EUR34,418,000 to EUR32,418,000.
Assets acquired and liabilities acquired:
FV of
assets
acquired
EUR'000
------------------------------------------ ----------
Assets
Intangible assets, in process R&D 48,461
Property, plant and equipment 1,373
Cash and cash equivalents 705
Inventories 687
Trade and other receivables 133
Total assets 51,359
------------------------------------------ ----------
Liabilities
Accounts payable and accrued liabilities 332
Deferred tax liability 5,384
------------------------------------------ ----------
Total liabilities 5,716
------------------------------------------ ----------
Total net assets 45,643
------------------------------------------ ----------
Consideration
Issue of fully paid ordinary shares 11,179
Cash consideration 11,150
Contingent consideration 23,314
Total consideration 45,643
------------------------------------------ ----------
5 Annual Report and Annual General Meeting ("AGM")
The Annual Report for the year ended 31 December 2017 will be
posted to shareholders on 4 May 2018 and will be available to
download from the Company's website at www.amrytpharma.com on 4 May
2018.
Notice of the AGM will be posted to shareholders on 4 May
2018.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXLKFDAPEFF
(END) Dow Jones Newswires
April 17, 2018 02:00 ET (06:00 GMT)
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