TIDMAMYT
RNS Number : 2091O
Amryt Pharma PLC
30 September 2019
30 September 2019
AIM: AMYT
Euronext Growth: AYP
AMRYT PHARMA PLC
("Amryt" or the "Company")
Interim results for the six months ended 30 June 2019
Amryt, a biopharmaceutical company focused on developing and
delivering innovative new treatments to help improve the lives of
patients with rare and orphan diseases, today announces interim
results for the six months ended 30 June 2019.
Financial Highlights
-- Revenue growth of 15.9% to EUR8.1m (H1 2018: EUR7.0m)
-- Revenues from Lojuxta (lomitapide) increased to EUR7.9m,
which represents a growth rate of 19.5% compared to H1 2018
(EUR6.6m)
-- Acquisition related expenses relating to work completed in H1 amounted to EUR2.3m
-- Cash balance at 30 June 2019 of EUR4.8m (31 December 2018: EUR9.8m)
Operational Highlights
Lead Commercial Asset - Lojuxta
-- Initial orders received for patients in France in Q1 2019
-- Positive momentum building in the UK and Saudi Arabian
markets, following first orders received for patients in Q4
2018
Lead Development Asset - AP101
-- Significant continued progress made in the EASE Phase 3
clinical trial supporting the development of AP101, a potential
treatment for Epidermolysis Bullosa ("EB") with final patient
enrolment expected by the end of 2019
-- Following an assessment of the results of an unblinded
interim efficacy analysis of its pivotal Phase 3 EASE trial for
AP101 as a potential treatment for EB, the IDMC recommended that
the trial should continue with an increase of 48 patients in the
study to a total of 230 evaluable patients, in order to maintain
80% statistical power
-- Following an assessment in February by the EASE trial's IDMC
of pharmacokinetic ("PK") data received from patients already
enrolled in the trial (aged four years and older), Amryt can now
enrol infants and children with EB between the ages of 21 days to 4
years of age into the trial
Gene Therapy Platform - AP103
-- Data from two preclinical studies showed that topical
application of AP103 restored production of collagen VII in
pre-clinical models of EB to levels exceeding those produced by
healthy human keratinocytes and to levels similar to those observed
following delivery with a viral vector
-- In addition, AP103 exhibited no evidence of cellular toxicity after repeated administration
Post-Period End Events
-- In August/September 2019, Amryt raised gross proceeds of $8.0
million by way of an interim placing
-- Scheme of arrangement completed to create new English group holding company ("New Amryt")
-- Acquisition of Aegerion completed on 24 September 2019
-- Admission of the enlarged share capital of New Amryt to trading on AIM and Euronext Growth
-- $60 million equity raise completed in conjunction with the
acquisition of Aegerion on 24 September 2019
-- Re-financing of existing Aegerion debt and additional debt
introduced to repay the existing Amryt EIB debt facility resulting
in a new 5-year term loan facility of $81 million and a new
5.5-year convertible loan facility of $125 million
-- New board structure announced for the Enlarged Group
Dr Joe Wiley, CEO of Amryt Pharma, commented: "We are pleased to
report solid growth in our commercial business in the first half
driven by continued positive momentum from Lojuxta. We also
achieved a significant milestone in Q1 with our lead development
asset - AP101 - with the successful completion of an unblinded
interim efficacy analysis for our EASE Phase 3 trial. EASE is
progressing well and we expect the study to be fully enrolled by
the end of the year. We continued to make good progress advancing
AP103 and in H1 announced the results of two preclinical studies
which further support the potential of our novel gene therapy
platform as a potentially transformative treatment for patients
with Recessive Dystrophic EB, which is a particularly severe form
of EB. If successful, this platform has potential in other genetic
skin conditions and beyond.
"2019 to date has been transformational for Amryt and we are
extremely well positioned to develop and grow our commercial
business whilst also progressing our very exciting development
pipeline. Amryt today has two substantial revenue-generating
products with built in 2018 revenues of $136.5m, a ready-made
international commercial business in the USA, Europe, the Middle
East and Latin America, a strong development pipeline and the
financial flexibility to fully execute on our growth plans. We are
very confident in the opportunities the deal will deliver for all
of our stakeholders, and that the transaction will drive future
shareholder value as we seek to deliver innovative treatments and
improve the lives of patients with rare and orphan diseases."
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,
John More
Stifel +44 (0) 20 7710 7600
Joint Broker
Jonathan Senior, Ben Maddison
Davy +353 (1) 679 6363
ESM Adviser and Joint Broker
John Frain, Daragh O'Reilly
Consilium Strategic Communications +44 (0) 20 3709 5700
Amber Fennell, Matthew Neal, David Daley
LifeSci Advisors, LLC +1 (212) 915 2564
Tim McCarthy
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014
Chairman & CEO's Statement
Introduction
We are pleased to report on the progress of Amryt Pharma plc and
present the unaudited interim financial results for the six-month
period ended 30 June 2019 ("H1 2019"). As used herein, references
to "we", "us", "Amryt", the "Amryt Group" or the "Group" in this
unaudited interim report shall mean Amryt Pharma plc and its
world-wide subsidiaries, collectively. References to the "Company"
in this interim report shall mean Amryt Pharma plc. The H1 2019
results contained in this unaudited interim report reflect the
consolidated results of Amryt Pharma plc, the parent company of the
Group during the period (company number: 05316808). A new holding
company for the Group was inserted effective from 24 September 2019
(company number: 12107859).
Overview
Amryt is a biopharmaceutical company focused on developing and
delivering innovative new treatments to help improve the lives of
patients with rare or orphan diseases. Through acquiring,
developing and commercialising products, the Company's ambition is
to become a global leader in the orphan disease market. The Group
has built a diverse portfolio of commercial and development stage
assets and its strategy is focused on three pillars:
-- Expand Amryt's commercial business - driving further revenue
growth of Amryt's lead commercial asset, Lojuxta(R), an approved
treatment for adult patients with the rare cholesterol disorder -
Homozygous Familial Hypercholesterolaemia (HoFH), in existing and
new territories
-- Acquisition and in-license opportunities - actively seeking
to expand Amryt's commercial product portfolio by acquiring further
commercial or near commercial assets to leverage Amryt's successful
Lojuxta business, such as the recent acquisition of Aegerion
-- Epidermolysis Bullosa ("EB") franchise - developing Amryt's
lead development asset, AP101, which is currently in Phase 3 as a
potential treatment for EB as well as progressing our gene therapy
platform, AP103, into the clinic.
Aegerion Pharmaceuticals, Inc Acquisition
Amryt announced on 21 May 2019 a recommended acquisition of
Aegerion Pharmaceuticals, Inc ("Aegerion" and together with the
Group, the "Enlarged Group"), (the "Acquisition"). This
transformational acquisition is consistent with Amryt's strategy to
expand its product portfolio to enhance shareholder value. The
Board believes that the combination of Aegerion and Amryt will
significantly advance Amryt's ambition to create a global leader in
rare and orphan diseases with a diversified offering of multiple
commercial and development stage assets and will provide Amryt with
the scale to support further growth. The acquisition of Aegerion by
Amryt was completed post period end on 24 September 2019.
Performance Highlights
Amryt's business performance and financial results for the first
half of 2019 have been in line with the Board's expectations. The
Group's revenues have continued to deliver solid growth, in part
driven by the positive reimbursement decisions in the UK and France
in the fourth quarter of 2018 for Lojuxta, with initial orders
received from UK patients in the fourth quarter of 2018 and from
French patients in the first quarter of 2019.
The Company's lead development asset, AP101, continues to
progress and achieved a significant milestone with the successful
completion of an unblinded interim efficacy analysis by the
Independent Data Monitoring Committee ("IDMC") of Amryt's Phase 3
EASE study in EB in January 2019. The IDMC recommended that the
trial should continue and also recommended an increase in the
enrolment of patients from 182 patients to 230 evaluable patients
to maintain adequate statistical power. The IDMC also allowed Amryt
to open its study to children with EB between the ages of 21 days
to four years of age. The EASE study is progressing well, and the
Directors believe that the study will be fully enrolled by the end
of 2019.
The Company's in-licensed gene therapy platform, AP103, has
completed two pre-clinical studies which showed that topical
application of AP103 restored production of collagen VII in
pre-clinical models of EB to levels exceeding those produced by
healthy human keratinocytes (cells that regenerate the outer layer
of the skin) and to levels similar to those observed following
delivery of the same gene with a viral vector. AP103 also exhibited
no evidence of cellular toxicity after repeated administration.
Some financial and operational highlights of the Group's
performance in 2019 to date are as follows:
H1 2019 Financial Highlights
-- Revenue growth of 15.9% to EUR8.1m (H1 2018: EUR7.0m)
-- Revenues from Lojuxta (lomitapide) increased to EUR7.9m,
which represents a growth rate of 19.5% compared to H1 2018
(EUR6.6m)
-- Acquisition related expenses relating to work completed in H1 amounted to EUR2.3m
-- Cash balance at 30 June 2019 of EUR4.8m (31 December 2018: EUR9.8m)
H1 2019 Operational Highlights
Lead Commercial Asset - Lojuxta
-- Initial orders received for patients in France in Q1 2019
-- Positive momentum building in the UK and Saudi Arabian
markets, following first orders received for patients in Q4
2018
Lead Development Asset - AP101
-- Significant continued progress made in the EASE Phase 3
clinical trial supporting the development of AP101, a potential
treatment for EB with final patient enrolment expected by the end
of 2019
-- Following an assessment of the results of an unblinded
interim efficacy analysis of its pivotal Phase 3 EASE trial for
AP101 as a potential treatment for EB, the IDMC recommended that
the trial should continue with an increase of 48 patients in the
study to a total of 230 evaluable patients, in order to maintain
80% statistical power
-- Following an assessment in February by the EASE trial's IDMC
of pharmacokinetic ("PK") data received from patients already
enrolled in the trial (aged four years and older), Amryt can now
enrol infants and children with EB between the ages of 21 days to 4
years of age into the trial
Gene Therapy Platform - AP103
-- Data from two preclinical studies showed that topical
application of AP103 restored production of collagen VII in
pre-clinical models of EB to levels exceeding those produced by
healthy human keratinocytes and to levels similar to those observed
following delivery with a viral vector
-- In addition, AP103 exhibited no evidence of cellular toxicity after repeated administration
Post-Period-End Events
-- In August/September 2019, Amryt raised gross proceeds of $8.0
million by way of an interim placing
-- Scheme of arrangement completed to create new English group holding company ("New Amryt")
-- Acquisition of Aegerion completed on 24 September 2019
-- Admission of the enlarged share capital of New Amryt to trading on AIM and Euronext Growth
-- $60 million equity raise completed in conjunction with the
acquisition of Aegerion on 24 September 2019
-- Re-financing of existing Aegerion debt and additional debt
introduced to repay the existing Amryt EIB debt facility resulting
in a new 5-year term loan facility of $81 million and a new
5.5-year convertible loan facility of $125 million
-- New board structure announced for the Enlarged Group
Acquisition of Aegerion
On 21 May 2019, the Company announced that it had reached an
agreement to acquire Aegerion, the wholly-owned operating
subsidiary of Novelion Therapeutics Inc. (NASDAQ:NVLN)
("Novelion"). Pursuant to the terms of the Acquisition, the implied
transaction equity valuations of Amryt and Aegerion are
approximately $120.0 million and $190.7 million, respectively.
Aegerion, with the support of its principal creditors, filed a
pre-negotiated Chapter 11 bankruptcy case in the US Bankruptcy
Court. The US Bankruptcy Court approved the Plan of Reorganisation
on 10 September 2019 and Aegerion emerged from bankruptcy with
substantially reduced liabilities and debts and with a reorganised
and streamlined capital structure. The acquisition of Aegerion by
Amryt was completed on 24 September 2019.
On 25 September 2019, the Enlarged Group was re-admitted to AIM
and Euronext Growth and the Enlarged Group will seek to effect a
follow-on US listing with the goal of increasing trading liquidity
and broadening investor reach.
Amryt has built a diversified portfolio of assets to treat
patients with rare and orphan diseases through the acquisition of
its AP101 product line and through the in-licencing of the
LOJUXTA(R) (from Aegerion) product line and the AP103 gene therapy
product line.
The Acquisition will advance Amryt's ambition to create a global
leader in rare and orphan diseases, with a diversified offering of
multiple development stage and commercial assets and will provide
it with the scale to support further growth. The Acquisition will
give Amryt an expanded commercial footprint to market two US and EU
approved products, lomitapide (marketed as JUXTAPID(R) in the
US/ROW and as LOJUXTA(R) in the EU) and metreleptin (marketed as
MYALEPT(R) in the US and as MYALEPTA(R) in the EU). The Directors
believe that Amryt's leadership team already has a deep knowledge
of both these products and, since December 2016, has licensed from
Aegerion and successfully commercialised LOJUXTA(R) across Europe
and the Middle East.
The Amryt Group's deep knowledge of the Aegerion Group's
products will be key to driving the Enlarged Group's revenue
growth, and the Directors believe that the reunification of the
lomitapide brands will provide the potential for the Enlarged Group
to replicate the success that Amryt has had with sales of
LOJUXTA(R) in Europe and the Middle East with JUXTAPID(R) in the US
and the rest of the world. The Directors also believe that there
will be opportunities to grow MYALEPTA(R) revenues by broadening
sales across the EU following the recent approval by the European
Medicines Agency ("EMA") in July 2018 and the enlarged footprint of
the European sales and marketing team following the Acquisition.
The Acquisition will also provide the Enlarged Group with a
ready-made commercial US presence and infrastructure in advance of
the anticipated launch of the Company's AP101 product which is
subject to AP101 receiving the relevant regulatory approvals.
Amryt recognised acquisition related expenses of EUR2.3 million
in H1 for work done during this period. The Company expects
additional acquisition related expenses to be incurred in H2
2019.
Operational Update
Lead Commercial Asset - Lojuxta
Lojuxta (lomitapide) is an approved treatment for adult patients
with the rare cholesterol disorder - Homozygous Familial
Hypercholesterolaemia ("HoFH"). This disorder impairs the body's
ability to remove low density lipoprotein ("LDL") cholesterol
("bad" cholesterol) from the blood, typically leading to abnormally
high blood LDL cholesterol levels in the body from before birth -
often ten times more than people without HoFH - and subsequent
aggressive and premature narrowing and blocking of blood vessels,
heart attacks and strokes, even at a very young age if not properly
diagnosed or receiving adequate treatment. Lojuxta is indicated as
an adjunct to a low-fat diet and other lipid-lowering medicinal
products with or without LDL apheresis in adult patients with
HoFH.
Following the completion of the Lojuxta in-licensing deal in
December 2016, Amryt became a commercial pharmaceutical company,
generating sales across Europe, the Middle East and other licensed
territories. Amryt's Lojuxta business has grown significantly since
the product was in-licensed in December 2016, through both organic
growth and through a license extension signed in May 2018 to expand
significantly the exclusive license agreement for Lojuxta into
Russia and CIS, as well as the non-EU Balkan states. Amryt
estimates there may be up to 450 additional patients who could
benefit from treatment with Lojuxta across the countries covered by
the extended agreement, representing an increase of approximately
25% in the total number of addressable patients covered under the
Amryt license agreement. The Company believes the total addressable
market opportunity for Lojuxta in the territories listed above to
be in excess of EUR125 million.
Amryt continues to evaluate the possibility of developing
lomitapide for the potential treatment of Familial Chylomicronaemia
Syndrome ("FCS"). FCS is a rare genetic disease that published
prevalence estimates suggest effects approximately one to two
individuals per million. In 2010, the EMA granted orphan
designation for lomitapide for the treatment of FCS. An
investigator study has commenced in Italy in FCS and top-line
results from this study are expected in 2020.
Lojuxta revenues for the six months to 30 June 2019 amounted to
EUR7.9 million which represents a 19.5% increase on the same period
in 2018. Amryt's focus on adoption of, and access to, Lojuxta in
new and existing territories is already delivering significant
returns and the Board are confident that this positive momentum
will continue to grow revenues (in the expanded geographies that
the Group now has direct control over post-Acquisition) for the
balance of 2019 and beyond.
Future sales growth will be driven by existing markets and from
new territories. This anticipated growth in existing markets is
underpinned by:
-- Positive momentum building following reimbursement decisions
in the UK and France for Lojuxta in 2018 and first orders from
Saudi Arabia coming through in Q4 2018;
-- 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
The acquisition of Aegerion will re-unite the Lomitapide
franchise which, prior to the Acquisition, was being sold by
Aegerion in the US under the brand name of JUXTAPID and by Amryt in
the EU, the Middle East and CEE under the brand name of LOJUXTA.
Amryt management intends to capitalise on its unique knowledge of
this product to replicate the success of Lojuxta in Europe with
Juxtapid in the US to drive future growth and profitability and
establish Amryt as a global player in the rare and orphan disease
market.
Lead Development Asset - AP101
AP101 is a potential treatment for EB, a rare and distressing
genetic skin disorder that causes the skin layers and internal body
linings to separate, affecting infants, children and adults, for
which there is currently no approved treatment.
Amryt has progressed the development of AP101 since 2016 and in
March 2017 commenced EASE, a Phase 3 efficacy and safety study of
AP101 in patients with EB. EASE is the largest ever global Phase 3
study conducted in patients with EB. The first patient was enrolled
in EASE in April 2017. In January 2019, Amryt reported the outcome
of an unblinded interim efficacy analysis, at which point the IDMC
recommended continuing the trial and increasing enrolment from 182
patients to 230 evaluable patients to maintain adequate statistical
power. Since February 2019, Amryt has been permitted to enrol
infants and children with EB between the ages of 21 days to four
years into the trial (the recruitment process for which is
underway) and it is anticipated that the study will be fully
enrolled by the end of 2019 with topline data expected in the first
half of 2020.
Amryt was first granted patent protection for AP101 in Japan in
2010. Key patent grants for AP101 in Europe and the US followed in
2016. The Amryt Group's AP101 patent portfolio includes one patent
covering oleogel compositions and two patents covering treatment of
EB that provide exclusivity in the US until 2025 (compositions) and
2030 (treatment of EB). The Amryt Group's non-US patents for AP101
include EU patents covering the AP101 composition and methods of
healing wounds with AP101. Supplementary protection certificates
have been obtained in various EU countries, extending the
expiration of the composition patents in the EU from 2025 to 2030.
The method of use patents are valid in the EU until 2030. Amryt has
filed a further provisional patent application which, if
successfully approved, will provide further intellectual property
coverage globally to 2039.
If AP101 is approved for the treatment of EB, the Company should
have Orphan Drug Designation in the EU and the US which would give
ten years of exclusivity in the EU and seven years of exclusivity
in the US, in each case, following such approval.
In 2018, Amryt obtained clearance from the FDA to open an IND
which allows clinical trial sites in the US to participate in the
EASE study. AP101 was also granted Rare Paediatric Disease
designation by the FDA. This means that if a NDA for AP101 is
approved, the Directors expect Amryt to be eligible to receive a
Rare Paediatric Disease Priority Review Voucher that can be used,
sold or transferred.
Potential Future Indications
AP101 has already been approved in Europe for use in the
treatment of partial thickness wounds in adults but not yet
commercialised.
AP101 is a topical product, to be applied to the skin,
incorporating an extract from the bark of the birch tree formulated
with sunflower oil. In in-vitro experiments AP101 has been observed
to stimulate keratinocyte migration and promote differentiation
into mature-epithelial skin cells, thereby ensuring more rapid
wound healing.
Amryt has also received interest from physicians to study AP101
in various partial thickness wound indications where there is high
unmet medical need. In response to this interest, Amryt is
evaluating new life cycle opportunities for AP101, including Toxic
Epidermal Necrolysis Syndrome (including Stevens- Johnson Syndrome)
and 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
and, pending the expansion of patents, open an opportunity in the
United States.
In November 2018, the first patients were enrolled in the early
access programme for AP101 in Latin America, resulting in the first
early access programme sales for AP101 in November 2018. This
programme allows Amryt to provide AP101 pre-approval to patients in
need and the programme runs alongside the EASE study. The early
access programme allows Amryt to collect real world data from
patients enrolled in the programmes in Latin America, which can be
used to generate real world evidence and to supplement clinical
trial data when seeking drug approval. Only patients who are not
eligible for EASE, and who have severe disease with no acceptable
treatment alternatives are eligible for consideration for an early
access programme. Amryt intends to extend the availability of the
early access programme in Argentina, Brazil, Colombia and certain
European countries where interest has been expressed.
AP103 (Gene Therapy in EB)
In March 2018, Amryt in-licensed a pre-clinical gene-therapy
platform technology, AP103, which offers a potential treatment for
patients with Recessive Dystrophic Epidermolysis Bullosa ("RDEB"),
a subset of EB, and is also potentially relevant to other genetic
disorders.
AP103 is a novel polymer platform technology for delivery of
gene therapy with potential applicability across a range of genetic
disorders. This technology has been exclusively in-licensed by
Amryt from University College Dublin and involves the use of Highly
Branched Poly (<BETA>-Amino Ester) ("HPAE") polymers as the
delivery vehicle for gene therapy.
The initial focus of the development work has been in the area
of EB and specifically, RDEB. Potential competitors working in the
area of gene therapy for EB are mostly working with viral vectors
for gene delivery. The patented technology for which Amryt has a
license involves the use of a novel non-viral gene delivery
platform technology, specifically using the family of HPAE
polymers. If successful, this could eliminate the requirement for
viruses as delivery vectors and may provide a safer, easier to
manufacture and more convenient treatment for patients.
In 2018, two pre-clinical trial studies completed on AP103
showed that topical application restored production of collagen VII
in pre-clinical models of EB to levels exceeding those produced by
healthy human keratinocytes (cells that regenerate the outer layer
of the skin) and to levels similar to those observed following
delivery of the same gene with a viral vector. In addition, AP103
exhibited no evidence of cellular toxicity after repeated
administration in these studies.
Pre-clinical Studies and Results
Amryt completed two pre-clinical studies in late 2018 and in
January 2019 announced results from these studies which support the
development of AP103 as a potentially disease-modifying therapy for
patients with RDEB. RDEB is a particularly severe form of EB and is
caused by mutations in a single gene, COL7A1, which codes for the
production of collagen VII, a structural protein vital for the
elastic and structural integrity of the skin. Restricting
production of collagen VII in skin cells could be transformative
for these patients, potentially making their skin less fragile and
more resistant to damage and blistering. The pre-clinical studies
sought to investigate the potential of AP103 as a topical gene
therapy intervention to restore expression of the COL7A1 gene.
- In vitro tests of RDEB keratinocytes, the main cell type in
the top layer of skin, showed that a single delivery of the human
collagen VII gene, by AP103, restored collagen VII production to
levels exceeding those produced by healthy human keratinocytes
- Topical application of AP103 onto a 3-D matrix of human RDEB
skin restored collagen VII along the basement membrane to levels
similar to those observed post-delivery using a single vector
- AP103 exhibited no evidence of cellular toxicity after repeated administration
Amryt is continuing pre-clinical testing of AP103 and further in
vivo testing for efficacy is under way. A pre-clinical toxicology
programme is also in development. The suppliers for the materials
for production of the components of AP103 and the final AP103
product under good manufacturing practice conditions are currently
under evaluation for selection.
In December 2018, an Amryt-led consortium comprised of Amryt (as
lead partner), University College Dublin, Curran Scientific Limited
and DEBRA Ireland was awarded (subject to contract negotiation)
grant funding totalling EUR8.4 million over three years from the
Disruptive Technologies Innovation Fund, part of the Irish
Government's Department of Business, Enterprise and Innovation, to
develop the AP103 gene therapy platform. The grant funding will be
matched by the consortium partners at various funding levels over
the three-year term of the project. The grant will fund further
development of the AP103 non-viral gene therapy platform from
pre-clinical testing to proof of concept in humans. The initial
funds will be used for R&D and staff costs associated with the
project and, if pre-clinical work is successful, to fund the
initial phases of a clinical trial for AP103. In addition to the
primary work on AP103, the funds will also support research into
the development of the HPAE polymer technology for the potential
treatment of other genetic disorders.
Imlan
Amryt also owns a range of derma-cosmetic products acquired in
conjunction with the acquisition of Birken AG in 2016. Imlan is
marketed solely in Germany as a treatment for sensitive,
allergy-prone and dry skin.
Financial Performance
The unaudited results for the current period are those of the
Company and its subsidiaries for the six months to 30 June
2019.
Total revenues for the six-month period to 30 June 2019 amounted
to EUR8,139,000, which represents a 15.9% increase on total
revenues for the same period in 2018. Lojuxta generated revenues of
EUR7,874,000. This compares to total revenues for the 6-month
period 30 June 2018 of EUR7,020,000, with Lojuxta generating
revenues of EUR6,591,000 for the period. Total Group revenues for
the year ended 31 December 2018 amounted to EUR14,454,000.
Gross margin for the six months to 30 June 2019 was 60.5%
compared to 61.4% for the six-month period ended 30 June 2018.
The operating loss before finance expense for the period
amounted to EUR11,070,000 which includes acquisition expenses of
EUR2,318,000, non-cash depreciation and amortisation of EUR289,000
and non-cash share-based payments of EUR197,000. This compares to
an operating loss before finance expense for the period ended 30
June 2018 of EUR6,497,000, which includes non-cash depreciation and
amortisation of EUR158,000 and non-cash share-based payment
expenses of EUR382,000. Excluding acquisition expenses,
depreciation, amortisation and share based payment expenses, the
operating loss before finance costs for the six-month period to 30
June 2019 would have been EUR8,266,000 (2018: EUR5,957,000). The
increase in operating loss before acquisition and finance expenses
in the current period is primarily due to the ongoing rollout costs
of the Phase 3 EASE study and the continued investment in the
commercial and regulatory infrastructure necessary to continue to
grow and expand Amryt's existing business and in anticipation of
the acquisition of Aegerion.
The non-cash change in fair value of contingent consideration
which arose as part of the acquisition of Amryt GmbH in 2016
amounted to EUR3,412,000 (H1: EUR4,154,000) during the period. 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 non-cash financing charge in the statement of
comprehensive income over the life of the obligation. This current
non-cash financing charge of EUR3,412,000 reflects the impact of
the discount component being unwound to the statement of
comprehensive income in the six month period to 30 June 2019.
The loss on ordinary activities after the non-cash fair value of
contingent consideration amounted to EUR15,730,000 (2018:
EUR11,384,000).
As of 30 June 2019, the Group had cash on hand of EUR4.8 million
(31 December 2018: EUR9.8 million). On 2 December 2016, Amryt
entered into a five year EUR20 million debt facility agreement with
the EIB. The first tranche of EUR10 million was drawn down in April
2017. The second tranche of EUR5 million was drawn down in
September 2018 and the third and final tranche of EUR5 million was
drawn down in April 2019. In conjunction with the acquisition of
Aegerion the EIB facility was repaid on 24 September 2019.
To ensure good corporate governance practices are in place, the
board adopts the ten principles as set out in the Quoted Companies
Alliance ("QCA"). These principles serve as a framework for
communicating our governance practices to shareholders and the
wider market. Our website and recently published admission document
set out how we currently comply with the principles of the QCA
code.
Outlook
The Board is very optimistic about the growth prospects for the
Group particularly given the successful completion of the
acquisition of Aegerion and as we look to the future as an Enlarged
Group.
Lojuxta revenues were in line with the Board's expectations for
the period and we are very encouraged with the momentum created in
the first half of 2019, which continues into the second half. We
believe there is a significant opportunity to further grow revenues
given the latent and significant opportunities that exist in the
territories we previously covered before the Acquisition and those
in the new geographies that we have exposure to as a result of the
Acquisition. The marketing and sale of Aegerion's metrelptin drug
(marketed as Myalept in the US and Myalepta in the EU ) and the
complete lomitapide franchise (marketed as Juxtapid in the US/ ROW
and Lojuxta in the EU) will be a core focus for us over the coming
quarters and beyond.
Our active pipeline, including the Phase 3 clinical trial EASE
for our lead development asset AP101, is progressing well. We
expect the final patient to be enrolled by the end of 2019 with
topline data expected in the first half of 2020. We estimate that
the addressable market for AP101 is more than EUR1 billion.
With a relentless focus on product development, revenue
expansion and the addition and integration of Aegerion into the
Enlarged Group, we believe 2019 will be an exciting year of
continued progress, success and growth for the Amryt.
The acquisition of Aegerion is truly transformational for Amryt.
We believe that the Enlarged Group now has a differentiated,
diverse, global offering of multiple commercial and development
stage rare disease assets, including two high-value commercial
assets with multiple development opportunities in complementary
global markets.
Ray Stafford
Non-Executive Chairman
30 September 2019
Joe Wiley
CEO
30 September 2019
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2019
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2019 2018 2018
Note EUR'000 EUR'000 EUR'000
------------------------------------------ ----- ---------- ----------- -------------
Revenue 8,139 7,020 14,454
Cost of sales (3,217) (2,711) (5,298)
------------------------------------------ ----- ---------- ----------- -------------
Gross profit 4,922 4,309 9,156
------------------------------------------ ----- ---------- ----------- -------------
Research and development expenses (4,619) (4,240) (9,049)
Administrative, selling and marketing
expenses (8,858) (6,184) (14,663)
Acquisition expenses (2,318) - -
Share based payment expenses 3 (197) (382) (694)
------------------------------------------ ----- ---------- ----------- -------------
Operating loss before finance expense (11,070) (6,497) (15,250)
------------------------------------------ ----- ---------- ----------- -------------
Change in fair value of contingent
consideration 4 (3,412) (4,154) (8,934)
Net finance expense (1,234) (733) (1,557)
------------------------------------------ ----- ---------- ----------- -------------
Loss on ordinary activities before
taxation (15,716) (11,384) (25,741)
------------------------------------------ ----- ---------- ----------- -------------
Tax on loss on ordinary activities (14) - (36)
------------------------------------------ ----- ---------- ----------- -------------
Loss for the period attributable to
the equity holders of the Company (15,730) (11,384) (25,777)
Exchange translation differences which
may be reclassified through the profit
and loss 28 (10) (34)
------------------------------------------ ----- ---------- ----------- -------------
Total other comprehensive profit/
(loss) 28 (10) (34)
------------------------------------------ ----- ---------- ----------- -------------
Total comprehensive loss for the period
attributable to the equity holders
of the Company (15,702) (11,394) (25,811)
------------------------------------------ ----- ---------- ----------- -------------
Loss per share:
Loss per share - basic and diluted,
attributable to ordinary equity holders
of the parent (cent) 5 (5.72) (4.14) (9.38)
Consolidated Statement of Financial Position
As at 30 June 2019
Unaudited Audited
30 June 31 December
2019 2018
Note EUR'000 EUR'000
-------------------------------- ----- ---------- -------------
Assets
Non-current assets
Intangible assets 6 52,671 52,695
Property, plant and equipment 1,684 960
Other non-current assts 65 130
Total non-current assets 54,420 53,785
-------------------------------- ----- ---------- -------------
Current assets
Trade and other receivables 5,897 5,179
Inventories 2,582 1,868
Cash and cash equivalents 4,771 9,811
Total current assets 13,250 16,858
-------------------------------- ----- ---------- -------------
Total assets 67,670 70,643
-------------------------------- ----- ---------- -------------
Equity and liabilities
Equity attributable to owners
of the parent
Share capital 7 21,173 21,173
Share premium 7 57,334 57,334
Other reserves (20,633) (20,858)
Accumulated deficit (76,610) (60,880)
-------------------------------- ----- ---------- -------------
Total equity (18,736) (3,231)
-------------------------------- ----- ---------- -------------
Non-current liabilities
Contingent consideration 4 44,763 41,351
Long term loan 8 22,479 16,614
Leases due greater than 1 year 437 -
Deferred tax liability 5,384 5,384
Total non-current liabilities 73,063 63,349
Current liabilities
Trade and other payables 13,047 10,525
Leases due less than 1 year 296 -
Total current liabilities 13,343 10,525
-------------------------------- ----- ---------- -------------
Total liabilities 86,406 73,874
-------------------------------- ----- ---------- -------------
Total equity and liabilities 67,670 70,643
-------------------------------- ----- ---------- -------------
Consolidated Statement of Cash Flows
For the six months ended 30 June 2019
Unaudited Unaudited Audited
6 months 12 months
to 6 months to
30 June to 31 December
2019 30 June 2018
2018
Note EUR'000 EUR'000 EUR'000
------------------------------------------ ----- ---------- ----------- -------------
Cash flows from operating activities
Loss on ordinary activities after
taxation (15,730) (11,384) (25,777)
Finance expense 1,234 733 1,557
Depreciation and amortisation 289 158 310
Gain on disposal of fixed assets (16) - -
Share based payment expense 3 197 382 694
Non-cash change in fair value of
contingent consideration 4 3,412 4,154 8,934
Movements in working capital and
other adjustments:
Change in trade and other receivables (718) 190 (450)
Change in trade and other payables 2,541 116 2,580
Change in inventories (713) (277) (785)
Change in non-current assets 65 - (130)
Net cash flow used in operating
activities (9,439) (5,928) (13,067)
------------------------------------------ ----- ---------- ----------- -------------
Cash flow from investing activities
Payments for property, plant and
equipment (129) (34) (68)
Payments for intangible assets 6 - (91) (131)
Cash inflow on sale of property, 25 - -
plant and equipment
Deposit interest received - 5 5
Bank charges and interest paid (32) (7) (18)
Net cash flow used in investing
activities (136) (127) (212)
------------------------------------------ ----- ---------- ----------- -------------
Cash flow from financing activities
Acquisition of Amryt GmbH - milestone
payment 4 - (2,000) (2,000)
Increase in long term debt 8 5,000 - 5,000
Payment of leases (143) - -
Interest paid on long term debt (284) (293) (221)
Net cash flow from financing activities 4,573 (2,293) 2,779
------------------------------------------ ----- ---------- ----------- -------------
Exchange and other movements (38) 45 (201)
------------------------------------------ ----- ---------- ----------- -------------
Net change in cash and cash equivalents (5,040) (8,303) (10,701)
Cash and cash equivalents at beginning
of period 9,811 20,512 20,512
------------------------------------------ ----- ---------- ----------- -------------
Restricted cash at end of period 132 - 1,191
------------------------------------------ ----- ---------- ----------- -------------
Cash at bank available on demand
at end of period 4,639 12,209 8,620
------------------------------------------ ----- ---------- ----------- -------------
Total cash and cash equivalents
at end of period 4,771 12,209 9,811
------------------------------------------ ----- ---------- ----------- -------------
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2019
Share Exchange
Share Share based Merger Reverse translation Accumulated
capital premium payment reserve acquisition reserve deficit Total
reserve
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 1 January 2018
(Audited) 21,173 57,334 4,755 35,818 (62,107) 22 (35,109) 21,886
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Loss for the year - - - - - - (25,777) (25,777)
Foreign exchange translation
reserve - - - - - (34) - (34)
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Total comprehensive loss - - - - - (34) (25,777) (25,811)
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Transactions with owners
Share based payments
expenses - - 694 - - - - 694
Share based payment expenses
- lapsed - - (6) - - - 6 -
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Total transactions with
owners - - 688 - - - 6 694
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 31 December 2018 21,173 57,334 5,443 35,818 (62,107) (12) (60,880) (3,231)
(Audited)
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 1 January 2019 21,173 57,334 5,443 35,818 (62,107) (12) (60,880) (3,231)
Loss for the period - - - - - - (15,730) (15,730)
Foreign exchange translation
reserve - - - - - 28 - 28
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Total comprehensive loss - - - - - 28 (15,730) (15,702)
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Transactions with owners
Share based payment expenses 3 - - 197 - - - - 197
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Total transactions with
owners - - 197 - - - - 197
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Balance at 30 June 2019 21,173 57,334 5,640 35,818 (62,107) 16 (76,610) (18,736)
(Unaudited)
----------------------------- ----- --------- --------- --------- --------- ------------- ------------- ------------- ---------
Share capital represents the cumulative par value arising upon
issue of ordinary shares of 1p each and deferred shares of 29.4p
each. In July 2019 the shareholders approved a resolution to cancel
the deferred shares and to consolidate six ordinary shares into one
new ordinary share.
Share premium represents the consideration that has been
received in excess of the nominal value on issue of share
capital.
Share based payment reserve relates to the charge for share
based payments in accordance with International Financial Reporting
Standard 2.
The reverse acquisition reserve arose during the period ended 31
December 2016 in respect of the reverse acquisition of Amryt Pharma
plc by Amryt Pharmaceuticals DAC ("Amryt DAC"). Since the
shareholders of Amryt DAC became the majority shareholders of the
enlarged group the acquisition is accounted for as though there is
a continuation of Amryt DAC's Financial Statements. The reverse
acquisition reserve is created to maintain the equity structure of
Amryt Pharma plc in compliance with UK company law.
The merger reserve was created on the acquisition of Amryt DAC.
Consideration on the acquisition included the issuance of shares.
Under section 612 of the Companies Act 2006, the premium on these
shares has been included in a merger reserve.
The exchange translation reserve was created on the
retranslation of non-Euro denominated foreign subsidiaries.
Accumulated deficit represents losses accumulated in previous
years and the current period.
Notes to the Interim Results
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. These results reflect
the consolidated results of Amryt Pharma plc, the parent company of
the Group during the period (company number: 05316808). A new
holding company for the Group was inserted effective from 24
September 2019 (company number: 12107859), which was incorporated
after the period end. The Company is quoted on the AIM market of
the London Stock Exchange (ticker: AMYT.L) and the Euronext Growth
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. Accounting Policies
Basis of preparation
The interim results of the Group 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
consolidated financial statements have been prepared on a
historical cost basis, except for contingent consideration that
have been measured at fair value. As is permitted by the AIM rules
the Directors have not adopted the requirements of IAS 34 "Interim
Financial Reporting" in preparing the consolidated financial
statements. Accordingly, the consolidated financial statements are
not in full compliance with IFRS and have not been audited or
reviewed pursuant to guidance issued by the Auditing Practices
Board. The accounting policies used in the preparation of the
interim financial information are the same as those used in the
Group's audited financial statements for the year ended 31 December
2018 and those which are expected to be used in the financial
statements for the year ended 31 December 2019.
The Directors consider that the financial information presented
in this Interim Report represents fairly the financial position,
operations and cash flows for the period, in conformity with
IFRS.
Basis of consolidation
The consolidated financial statements comprise the Financial
Statements of the Company and its subsidiaries for the period ended
30 June 2019. Subsidiaries are entities controlled by the Company.
Where the Company has control over an investee, it is classified as
a subsidiary. The Company controls an investee if all three of the
following elements are present: power over an investee, exposure to
variable returns from the investee, and the ability of the investor
to use its power to affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may
be a change in any of these elements of control. Subsidiaries are
fully consolidated from the date that control commences until the
date that control ceases. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the
policies adopted by the Group. Intergroup balances and any
unrealised gains or losses or income or expenses arising from
intergroup transactions are eliminated in preparing the
consolidated financial statements.
Basis of going concern
Having considered the Group's current financial position and
cashflow projections, the directors believe that the Group will be
able to continue in operational existence for at least the next 12
months from the date of approval of these consolidated financial
statements and that it is appropriate to continue to prepare the
consolidated financial statements on a going concern basis.
As part of their enquiries the Directors reviewed budgets,
projected cash flows, and other relevant information for 12 months
from the date of approval of the consolidated financial statements
for the 6 months ended 30 June 2019.
A key consideration for the Directors is the impact on going
concern of the recently announced acquisition with Aegerion. This
acquisition represents a significant step forward for Amryt and is
expected to create value for Amryt through enhanced scale of the
combined group which is expected to drive revenues and deliver
operational synergies through a combination of medical, commercial,
clinical, development and regulatory infrastructure. In conjunction
with the acquisition of Aegerion which was completed on 24
September 2019, the Company raised $60 million in new equity before
costs.
Presentation of Balances
The Financial Statements are presented in Euro ('EUR') which is
the functional and presentational currency of the Group. Balances
in the Financial Statements are rounded to the nearest thousand
(EUR'000) except where otherwise indicated.
The following table discloses the major exchange rates of those
currencies utilised by the Group:
Foreign currency units US$ GBP CHF SEK NOK DKK
to 1 EUR
----------------------------- ------- ------- ------- -------- ------- -------
Average period to 30 June
2019 1.1312 0.8726 1.1298 10.4615 9.7410 7.4645
At 30 June 2019 1.1151 0.8840 1.1195 10.6196 9.7777 7.4672
Average year to 31 December
2018 1.1827 0.8853 1.1544 10.2639 9.6141 7.4506
At 31 December 2018 1.1357 0.8896 1.1330 10.3184 9.7277 7.4616
Average period to 30 June
2018 1.2113 0.8809 1.1672 10.1422 9.6526 7.4459
At 30 June 2018 1.1675 0.8769 1.1529 10.2943 9.5437 9.4429
----------------------------- ------- ------- ------- -------- ------- -------
(US$ = US Dollars; GBP = Pounds Sterling, CHF = Swiss Franc, SEK
= Swedish Kroner, NOK = Norwegian Kroner, DKK = Danish Kroner)
Adoption of new standards issued and effective from 1 January
2019
The following new standards, interpretations and standard
amendments became effective for the Group as of 1 January 2019:
-- IFRS 16 Leases
-- Amendments to IFRS 9 Financial Instruments
-- Amendments to IAS 19 Employee Benefits
The new standards, interpretations and standard amendments did
not result in a material impact on the Group's results, with the
exception of IFRS 16 which is detailed below.
IFRS 16 Leases
IFRS 16 replaces IAS 17 Leases. Amryt adopted IFRS 16 by
applying the modified retrospective approach on the transition date
of 1 January 2019. The Group applied the recognition exemption for
both short-term leases and leases of low value assets. The Group
did avail of the practical expedient not to separate non-lease
components from lease. The right-of-use asset has been calculated
as the lease liability at 1 January 2019 with no adjustment to
opening retained earnings.
The adoption of IFRS 16 did not have a material impact on the
Group's Consolidated Interim Financial Statements. The impact of
the implementation of IFRS 16 on the Consolidated Interim Financial
Statements is as follows:
Consolidated Statement of income
Operating costs (excluding depreciation) have decreased, as the
Group previously recognised operating lease expenses in
Administration, Selling and Marketing expenses. The Group's
operating lease expense for the six months to June 2019 was
EUR143,000.
Depreciation and finance costs have increased due to the
capitalisation of the Groups' Right Of Use assets under IFRS 16
which are being depreciated over the term of the lease with an
associated finance cost applied annual to the lease liability. The
depreciation and finance charge for the six months ended 30 June
2019 amounted to EUR132,000.
Balance Sheet
The Group has identified minimum lease payments outstanding
(including payments for renewal options which are reasonably
certain to be exercised and has applied an appropriate discount
rate to calculate the present value of the lease liability and
right of use asset recognised in the consolidated Interim Balance
Sheet. The discount rates applied were arrived at using a
methodology to calculate the incremental borrowing rates across the
Group.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and amounts reported in the
Financial Statements and accompanying notes. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Summary of principal accounting policies
The principal accounting policies are summarised below. They
have been consistently applied throughout the period covered by the
Financial Statements.
Revenue recognition
Revenue arises from the sale of Lojuxta and Imlan. The Group
sells direct to customers and also uses third parties in the
distribution of the product to customers.
Revenue from contracts with customers is recognised when control
of the goods or services are transferred to the customer at an
amount that reflects the consideration to which the Group expects
to be entitled to in exchange for those goods. The Group recognises
contract liabilities for consideration received in respect of
unsatisfied performance obligations and reports these amounts as
liabilities in the statement of financial position. Similarly, if
the Group satisfies a performance obligation before it receives the
consideration, the Group recognises either a contract asset or a
receivable in its statement of financial position, depending on
whether something other than the passage of time is required before
the consideration is due.
Revenue from sale of goods
Imlan revenue is generally recognised at a point in time when
control of the inventory is transferred, generally the date of
shipment, consistent with typical ex-works shipment terms.
Lojuxta revenue is generally recognised at a point in time when
control of the inventory is transferred to the end customer,
generally on delivery of the goods.
Principal versus agent considerations
The Group enters into certain contracts for the sale of its
Lojuxta product. This includes agreement with a third party to
provide logistics, customer and commercial services i.e. supply
chain function and agreements with distributors. The Group
determined that it has control over the goods before they are
transferred to the customers and has the ability to direct the use
or obtain benefits hence is the principal on the contracts due to
the following factors:
-- The Group is primarily responsible for fulfilling the promise to provide the promised goods
-- The Group bears the inventory risk before or after the goods
have been ordered by the customer, during shipping or on return
-- The Group has the discretion in establishing the selling
price of the goods to customers. The distributors consideration in
these contracts are either the margin fee or commission
-- The Group is exposed to the credit risk for the amounts receivable from the customers.
Based on the above criteria, the Group recognises revenue on a
gross basis. The costs associated with the delivery of such goods
to customers i.e. the costs associated with the services provided
by the distributors to import and deliver the goods are recognised
in the cost of sales.
Financial instruments
Recognition and derecognition
Financial instruments are classified on initial recognition as
financial assets, financial liabilities or equity instruments in
accordance with the substance of the contractual arrangement.
Financial instruments are initially recognised when the Group
becomes party to the contractual provisions of the instrument.
Financial assets are de-recognised when the contractual rights to
the cash flows from the financial asset expire or when the
contractual rights to those assets are transferred. Financial
liabilities are de-recognised when the obligation specified in the
contract is discharged, cancelled or expired.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the transaction
price in accordance with IFRS 15, all financial assets are
initially measured at fair value adjusted for transaction costs, if
any.
Financial assets, other than those designated and effective as
hedging instruments, are classified into the following
categories:
-- Amortised cost
-- Fair value through profit or loss (FVTPL)
-- Fair value through other comprehensive income (FVOCI)
The Group does not have any financial assets categorised as
FVTPL and FVOCI as at 30 June 2019 and 31 December 2018.
The classification is determined by both:
-- The Group's business model for managing the financial asset
-- The contractual cash flow characteristic of the financial asset
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions (and are not designated as
FVTPL):
-- they are held within a business model whose objective is to
hold the financial assets and collect its contractual cash
flows
-- the contractual terms of the financial assets give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding
After initial recognition, these are measured at amortised cost
using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group's cash and cash
equivalents and trade receivables fall into this category of
financial instruments.
Cash and cash equivalents
Cash comprises cash on hand and bank balances. Cash equivalents
are short-term, highly liquid investments that are readily
convertible to known amounts of cash, which are subject to an
insignificant risk of changes in value and have a maturity of three
months or less at the date of acquisition.
Restricted cash
Restricted cash comprises current cash and cash equivalents that
are restricted as to withdrawal or usage. Cash held by the Group's
distribution partner for Lojuxta on behalf of the Group is treated
as restricted cash in the Financial Statements.
Trade and other receivables
Trade and other receivables represent the Group's right to an
amount of consideration that is unconditional (i.e., only the
passage of time is required before payment of the consideration is
due).
Impairment of financial assets
The Group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at FVTPL. ECLs are based
on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
For trade receivables, the Group applies a simplified approach
in calculating ECLs. Therefore, the Group does not track changes in
credit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group assesses ECL based
on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic
environment.
Financial liabilities
Financial liabilities are categorised as 'fair value through
profit or loss' or 'other financial liabilities measured at
amortised costs using the effective interest method'.
Trade and other payables
Trade and other payables are initially measured at their fair
value and are subsequently measured at their amortised cost using
the effective interest rate method except for short-term payables
when the recognition of interest would be immaterial.
Interest bearing loans and borrowings
Interest-bearing loans and borrowings are recognised initially
at fair value less attributable transaction costs. Loans and
borrowings are subsequently carried at amortised cost using the
effective interest method.
Contingent consideration
Contingent consideration arising as a result of business
combinations is initially recognised at fair value using a
probability adjusted present value model. Key inputs in the model
include the probability of success and the expected timing of
potential revenues. The fair value of the contingent consideration
will be updated at each reporting date. Adjustments to contingent
consideration are recognised in the consolidated statement of
comprehensive income.
Offsetting financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the statement of financial position if
there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net
basis, or to realize the asset and settle the liability
simultaneously.
Inventories
Inventories are valued at the lower of cost or net realisable
value. The costs are calculated according to the first in first out
method (FIFO). Cost includes materials, direct labour and an
attributable proportion of manufacturing overheads based on normal
levels of activity. Work in progress valuation is based on the
stage of quality checks successfully performed during the
production process. An inventory valuation adjustment is made if
the net realisable value is lower than the book value. Net
realisable value is determined as estimated selling prices less all
costs of completion and costs incurred in selling and
distribution.
Inventories held by third party supply chain partners are
included in inventory totals when control has deemed to be
transferred to the Group under the contract terms of the
distribution agreement. The cost to acquire the inventory held by
the supply chain partners is recognised as a liability of the
Group.
Research and Development Expenses
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.
Factors which impact our judgement to capitalise certain
research and development expenditure include the degree of
regulatory approval for products and the results of any market
research to determine the likely future commercial success of
products being developed. We review these factors each year to
determine whether our previous estimates as to feasibility,
viability and recovery should be changed.
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 AP103.
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.
Business Combinations
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date fair
value and the amount of any non-controlling interest in the
acquiree. Fair values are attributed to the identifiable assets and
liabilities unless the fair value cannot be measured reliably, in
which case the value is subsumed into goodwill. In the consolidated
financial statements, acquisition costs incurred are expensed and
included in general and administrative expenses.
To the extent that settlement of all or any part of the
consideration for a business combination is deferred, the fair
value of the deferred component is determined through discounting
the amounts payable to their present value at the date of the
exchange. The discount component is unwound as an interest charge
in the consolidated statement of comprehensive income over the life
of the obligation. Any contingent consideration is recognised at
fair value at the acquisition date and included in the cost of the
acquisition. The fair value of contingent consideration at
acquisition date is arrived at through discounting the expected
payment (based on scenario modelling) to present value. In general,
in order for contingent consideration to become payable,
pre-defined revenues and/or milestones dates must be exceeded.
Subsequent changes to the fair value of the contingent
consideration will be recognised in profit or loss unless the
contingent consideration is classified as equity, in which case it
is not remeasured and settlement is accounted for within
equity.
When the initial accounting for a business combination is
determined provisionally, any adjustments to the provisional values
allocated to the consideration, identifiable assets or liabilities
(and contingent liabilities, if relevant) are made within the
measurement period, a period of no more than one year from the
acquisition date.
Frequently, the acquisition of pharmaceutical patents and
licenses is effected through a non-operating corporate structure.
As these structures do not represent a business, it is considered
that the transactions do not meet the definition of a business
combination. Accordingly, the transactions are accounted for as the
acquisition of an asset. The net assets acquired are recognised at
cost.
Acquired Intangibles 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.
The useful life of acquired intangible assets is as follows:
-- Software 5-10 years
-- Website Development 5-10 years
Intangible assets acquired in 2016 as part of the acquisitions
of Amryt GmbH and SomPharmaceuticals are currently not being
amortised as the assets are still under development.
Factors which impact our judgement to capitalise certain
research and development expenditure include the degree of
regulatory approval for products and the results of any market
research to determine the likely future commercial success of
products being developed. We review these factors each year to
determine whether our previous estimates as to feasibility,
viability and recovery should be changed.
Taxes
Tax comprises current and deferred tax. Current tax is the
expected tax payable on the taxable income for the year, using tax
rates enacted or substantively enacted at the reporting date and
taking into account any adjustments stemming from prior years.
Deferred tax assets or liabilities are recognised where the
carrying value of an asset or liability in the Statement of
Financial Position differs to its tax base and is accounted for
using the statement of financial position liability method.
Recognition of deferred tax assets is restricted to those instances
where it is probable that taxable profit will be available against
which the difference can be utilised.
Share based payments
The Group issues share options as an incentive to certain senior
management and staff. The fair value of options granted is
recognised as an expense with a corresponding credit to the
share-based payment reserve. The fair value is measured at grant
date and spread over the period during which the awards vest.
For equity-settled share-based payment transactions, the goods
or services received and the corresponding increase in equity are
measured directly at the fair value of the goods or services
received, unless that fair value cannot be estimated reliably. If
it is not possible to estimate reliably the fair value of the goods
or services received, the fair value of the equity instruments
granted as calculated using the Black-Scholes model is used as a
proxy.
The Group may issue warrants to key consultants, advisers and
suppliers in payment or part payment for services or supplies
provided to the Group. The fair value of warrants granted is
recognised as an expense. The corresponding credits are charged to
the share-based payment reserve. The fair value is measured at
grant date and spread over the period during which the warrants
vest. The fair value is measured using the Black-Scholes model if
the fair value of the services received cannot be measured
reliably.
The estimate of the fair value of services received is measured
based on Black Scholes model using input assumptions, including
weighted average share price, expected volatility, weighted average
expected life and expected yield. The expected life of the options
is based on historical data and is not necessarily indicative of
exercise patterns that may occur. The expected volatility is based
on the historic volatility (calculated based on the expected life
of the options). The Group has considered how future experience may
affect historical volatility.
Leases
The Group enters into leases for various types of assets, but
principally relating to property in Ireland and Germany. The
property leases have varying terms, renewal rights and escalation
clauses. The Group also leases vehicles and equipment. The terms
and conditions of these leases do not impose significant financial
restrictions on the Group.
A contract contains a lease if it is enforceable and conveys the
right to control the use of a specified asset for a period of time
in exchange for consideration, which is assessed at inception. A
right-of-use asset and lease liability are recognised at the
commencement date for contracts containing a lease, with the
exception of leases with a term of 12 months or less, leases where
the underlying asset is of low value and leases with associated
payments that vary directly in line with usage or sales. The
commencement date is the date at which the asset is made available
for use by the Group. The right of use asset recognised on
commencement date is included in fixed assets in the consolidated
financial statements.
The lease liability is initially measured at the present value
of the future minimum lease payments, discounted using the
incremental borrowing rate or the interest rate implicit in the
lease, if this is readily determinable, over the remaining lease
term. The lease term is the non-cancellable period of the lease
adjusted for any renewal or termination options which are
reasonably certain to be exercised. Management applies judgement in
determining whether it is reasonably certain that a renewal,
termination or purchase option will be exercised.
Incremental borrowing rates are calculated using a portfolio
approach, based on the risk profile of the entity holding the lease
and the term and currency of the lease.
After initial recognition, the lease liability is measured at
amortised cost using the effective interest method. It is
remeasured when there is a change in future minimum lease payments
or when the Group changes its assessment of whether it is
reasonably certain to exercise an option within the contract. A
corresponding adjustment is made to the carrying amount of the
right-of-use asset. The right-of-use asset is initially measured at
cost, which comprises the lease liability adjusted for any payments
made at or before the commencement date, initial direct costs
incurred, lease incentives received and an estimate of the cost to
dismantle or restore the underlying asset or the site on which it
is located at the end of the lease term. The right-of-use asset is
depreciated over the lease term or, where a purchase option is
reasonably certain to be exercised, over the useful economic life
of the asset in line with depreciation rates for owned property,
plant and equipment. The right-of-use asset is tested periodically
for impairment if an impairment indicator is considered to
exist.
3. Share-based payments
Under the terms of the Company's Employee Share Option Plan,
options to purchase 25,852,853 shares were outstanding at 30 June
2019. Under the terms of this plan, Options were granted to
officers, consultants and employees of the Group at the discretion
of the Remuneration Committee. There were 6,691,472 new share
options granted to officers and employees during the 6 months ended
30 June 2019. There were no new share options granted during the
year ended 31 December 2018.
The Company has issued warrants to key consultants, advisers and
suppliers in payment or part payment for services or supplies
provided to the Group. There were no warrants granted during the
six months ended 30 June 2019 or the year ended 31 December
2018.
Each share option and warrant convert into one ordinary share of
Amryt Pharma plc on exercise and are accounted for as
equity-settled share-based payments. The options and warrants may
be exercised at any time from the date of vesting to the date of
their expiry. The equity instruments granted carry neither rights
to dividends nor voting rights.
The terms and conditions of the grants are as follows, whereby
all options are settled by physical delivery of shares:
Vesting conditions
The options vest following a period of service by the officer or
employee. The required period of service is determined by the
Remuneration Committee at the date of grant of the options (usually
the date of approval by the Remuneration Committee) and it is
generally over a three to four-year period. There are no market
conditions associated with the share option vesting periods.
Contractual life
The term of an option is determined by the Remuneration
Committee provided that the term may not exceed a period of seven
to ten years from the date of grant. All options will terminate 90
days after termination of the option holder's employment, service
or consultancy with the Group except where a longer period is
approved by the Board of Directors. Under certain circumstances
involving a change in control of the Group, the Remuneration
Committee may accelerate the exercisability and termination of
options.
The number and weighted average exercise price of share options
and warrants per ordinary share is as follows:
Share Options Warrants
----------------------- ---------------------------------
Weighted
average Weighted
exercise average exercise
Units price Units price
---------------------------- ----------- ---------- ------------- ------------------
Balance at 1 January
2018 19,696,586 19.16p 23,103,481 24.74p
Granted - - - -
Lapsed (191,455) 23.75p (193,530) 112.00p
Outstanding at 31 December
2018 19,505,131 19.20p 22,909,951 24.00p
---------------------------- ----------- ---------- ------------- ------------------
Exercisable at 31 December
2018 7,964,434 19.47p 22,909,951 24.00p
---------------------------- ----------- ---------- ------------- ------------------
Balance at 1 January
2019 19,505,131 19.20p 22,909,951 24.00p
Granted 6,691,472 12.64p - -
Lapsed (343,750) 48.00p (20,836,696) 24.00p
Outstanding at 30 June
2019 25,852,853 17.09p 2,073,255 24.00p
---------------------------- ----------- ---------- ------------- ------------------
Exercisable at 30 June
2019 12,450,594 17.74p 2,073,255 24.00p
---------------------------- ----------- ---------- ------------- ------------------
The fair value is estimated at the date of grant using the
Black-Scholes pricing model, taking into account the terms and
conditions attached to the grant. There were 6,691,472 new share
options or warrants granted in the 6 month period to 30 June 2019.
There were no share options granted in 2018.
In July 2019 the shareholders approved a resolution to cancel
the deferred shares and to consolidate six ordinary shares into one
new ordinary share (note 7).
The following are the inputs to the model for the equity
instruments granted in 2019:
2019 Options 2019 Warrant 2018 Options 2018 Warrant
Inputs Inputs Inputs Inputs
--------------------- ------------- ------------- ------------- -------------
Days to Expiry 2,555 - - -
Volatility 27% - - -
Risk free interest 0.83% - - -
rate
Share price at grant 12.64p - - -
--------------------- ------------- ------------- ------------- -------------
The share options outstanding as at 30 June 2019 have a weighted
remaining contractual life of 5.14 years with exercise prices
ranging from 15.5p to 25.9p (pre-share consolidation).
The warrants outstanding as at 30 June 2019 have a weighted
remaining contractual life of 1.8 years with an exercise price of
24.0p (pre share consolidation).
The value of share options and warrants charged to the Statement
of Comprehensive Income during the period is as follows:
6 months to 6 months 12 months
30 June to to
2019 30 June 31 December
2018 2018
EUR'000 EUR'000 EUR'000
---------------------- ------------ --------- -------------
Share option expense 197 382 694
Total 197 382 694
---------------------- ------------ --------- -------------
4. Business Combinations and Asset Acquisitions
Acquisition of Amryt GmbH ("Birken")
Amryt DAC signed a conditional share purchase agreement to
acquire Amryt GmbH on 16 October 2015 ("Amryt GmbH SPA"). The Amryt
GmbH SPA was completed on 18 April 2016 with Amryt DAC acquiring
the entire issued share capital of Amryt GmbH. The consideration
comprises:
-- Initial cash consideration of EUR1,000,000 (paid by Amryt DAC
prior to its acquisition by the Company);
-- Cash consideration of EUR150,000, due and paid on the completion date (18 April 2016);
-- 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 (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 (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 (EB);
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;
-- 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
GmbH sellers received 37,048,622 in Consideration Shares (valued at
the date of acquisition 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 GmbH 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. 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.
Amryt reviews 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 period ended 30 June 2019 is
EUR3,412,000 (30 June 2018: EUR4,154,000).
The contingent consideration balance at 30 June 2019 is
EUR44,763,000 (31 December 2018: EUR41,351,000).
5. Loss per Share - Basic and Diluted
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 30 June 2019.
Issued share capital - Ordinary Shares of GBP0.01 each
Weighted
average
Number of shares shares
------------------ ----------------- -------------
1 January 2018 274,817,283 223,075,123
------------------ ----------------- -------------
30 June 2018 274,817,283 274,817,283
------------------ ----------------- -------------
31 December 2018 274,817,283 274,817,283
30 June 2019 274,817,283 274,817,283
------------------ ----------------- -------------
The calculation of loss per share is based on the following:
6 months 6 months 12 months
to to to 31 December
30 June 30 June 2018
2019 2018
------------------------------------------ ------------ ------------ -----------------
Loss after tax attributable to equity
holders of the Company (EUR'000) (14,735) (11,384) (25,777)
Weighted average number of Ordinary
Shares in issue 274,817,283 274,817,283 274,817,283
Fully diluted average number of Ordinary
Shares in issue 274,817,283 274,817,283 274,817,283
------------------------------------------ ------------ ------------ -----------------
Basic and diluted loss per share (cent) (5.36) (4.14) (9.38)
------------------------------------------ ------------ ------------ -----------------
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 30 June 2019
totalled 27,926,108 (30 June 2018: 42,800,067) (31 December 2018:
42,415,082) and are potentially dilutive in the future.
In July 2019 the shareholders approved a resolution to cancel
the deferred shares and to consolidate six ordinary shares into one
new ordinary share (note 7).
6. Intangible Assets
In process Software Other Total
R&D
EUR'000 EUR'000 EUR'000 EUR'000
---------------------------------- ----------- --------- -------- ---------
Cost
At 1 January 2018 52,515 8 87 52,610
Additions - - 131 131
Disposals - (1) - (1)
At 31 December 2018 (audited) 52,515 7 218 52,740
---------------------------------- ----------- --------- -------- ---------
At 1 January 2019 52,515 7 218 52,740
Additions - - - -
At 30 June 2019 (unaudited) 52,515 7 218 52,740
Accumulated amortisation
At 1 January 2018 - 4 - 4
Amortisation charge 2018 - 1 41 42
Amortisation charge on disposals - (1) - (1)
---------------------------------- ----------- --------- -------- ---------
At 31 December 2018 (audited) - 4 41 45
---------------------------------- ----------- --------- -------- ---------
At 1 January 2019 - 4 41 45
Amortisation charge 2019 - - 24 24
---------------------------------- ----------- --------- -------- ---------
At 30 June 2019 (unaudited) - 4 65 69
---------------------------------- ----------- --------- -------- ---------
Net book value
Net book value at 31 December
2018 (audited) 52,515 3 177 52,695
---------------------------------- ----------- --------- -------- ---------
Net book value at 30 June 2019
(unaudited) 52,515 3 153 52,671
---------------------------------- ----------- --------- -------- ---------
The Group reviews the carrying amounts of its intangible assets
on an annual basis to determine whether there are any indications
that those assets have suffered an impairment loss. If any such
indications exist, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss. Impairment
indications include events causing significant changes in any of
the underlying assumptions used in the income approach utilised in
valuing in process R&D. These key assumptions are: the
probability of success; the discount factor; the timing of future
revenue flows; market penetration and peak sales assumptions; and
expenditures required to complete development.
7. Share capital - Company
Details of ordinary shares of 1p each issued are in the table
below:
Number of Number of Total Share Total Share
Date ordinary deferred Capital Premium
shares shares EUR'000 EUR'000
--------------------------- ------------ ----------- ------------ ------------
At 31 December 2018 and
30 June 2019 274,817,283 43,171,134 21,173 57,334
--------------------------- ------------ ----------- ------------ ------------
Share Capital
Share capital represents the cumulative par value arising upon
issue of ordinary shares of 1p each and deferred shares of 29.4p
each.
The ordinary shares have the right to receive notice of, attend
and vote and general meetings and participate in the profits of the
Company.
The deferred shares were issued as part of the reverse takeover
in 2016 because the nominal value of the existing shares was above
the trading price. As a result, a resolution was passed by the
shareholders to reduce the nominal value of the existing ordinary
shares substantially below their market value in order to provide
the Company with the ability to make future share issues.
Consequently, a share reorganisation was implemented such that each
holding of every 8 or more existing shares were consolidated into
one new ordinary share and one deferred share. The deferred shares
had no right to receive notice of general meetings nor any right to
attend or vote at general meetings and no right to participate in
the profits of the Company.
At the Company's Annual General Meeting held in July 2019, the
shareholders of the Amryt approved a resolution to authorise the
Company to purchase and cancel 43,171,134 deferred ordinary shares
in the capital of the Company. In addition, the shareholders gave
authority to the Company to undertake a consolidation of existing
ordinary shares in the capital of the Company under which every six
existing ordinary shares will be consolidated into one new ordinary
share. The purpose and rationale for this capital reorganisation
was to reduce the total number of shares in issue to increase the
value of the Company's shares to a figure more appropriate for a
listed company in light of the proposed acquisition of Aegerion
Pharmaceuticals, Inc. and associated increase in scale of the
enlarged group. The Deferred Shares are effectively valueless as
they do not carry any rights to vote nor any dividend rights, are
not listed to be traded on the AIM or Euronext Markets and are not
transferrable. As such, the cancellation of the Deferred Shares has
no impact on shareholders.
Share Premium
Share premium represents the consideration that has been
received in excess of the nominal value on issue of share
capital.
Share based payment reserve
Share based payment reserve relates to the charge for share
based payments in accordance with International Financial Reporting
Standard 2.
Merger reserve
The merger reserve was created on the acquisition of Amryt DAC
by Amryt Pharma plc in April 2016. Ordinary shares in Amryt Pharma
plc were issued to acquire the entire issued share capital of Amryt
DAC. Under section 612 of the Companies Act 2006, the premium on
these shares has been included in a merger reserve.#
8. Long term loan
30 June 31 December
2019 2018
EUR'000 EUR'000
----------------------------- -------- ------------
Long term loan 20,000 15,000
Long term loan interest 2,479 1,614
Long term loan and interest 22,479 16,614
----------------------------- -------- ------------
In December 2016, Amryt DAC entered into a EUR20m facility
agreement ("facility") with the EIB on attractive terms for the
Group. The facility was significant because it provides
non-dilutive funding that secures the Group's near and mid-term
funding needs for its lead product, AP101.
The facility was split into three tranches, with EUR10 million
available immediately and two further tranches of EUR5 million
available upon the achievement of certain milestones. In April
2017, the Group drew down the first tranche of EUR10 million. In
October 2017, the terms of the second tranche of EUR5 million were
amended by the EIB resulting in the Group being given option to
draw this amount down on demand. The Group drew down this second
tranche of EUR5 million in September 2018. In December 2018, the
terms of the third tranche were amended by the EIB to give the
Group the option to draw down this final tranche on demand on the
condition that the EASE Phase 3 trial interim efficacy results were
positive. In January 2019, the Group received the results of this
unblinded interim efficacy analysis. The Independent Monitoring
Committee recommended that the trial should continue with a modest
increase in patients and following this positive result the final
tranche of EUR5 million was drawn down in February 2019.
The facility was secured over the Intellectual Property assets
of the Group and there was also a negative pledge whereby Amryt
cannot permit any security to be granted over any of its assets
over the course of the loan period.
The facility had a five-year term from the date of drawdown for
each tranche. The facility had an interest rate of 3% to be paid on
an annual basis, the first instalment of short-term interest on the
EUR10 million tranche 1 was paid in April 2018 and the second
annual instalment paid in April 2019. No short term interest has
been paid to date on tranche 2 and tranche 3 of the loan. The first
interest payment on tranche 2 and tranche 3 was due for payment in
September 2019 and February 2020, respectively. A further annual
fixed rate of 10% is payable together with the outstanding
principal amount on expiry of each tranche in the facility.
At 30 June 2019, the Group has short term interest payable
accrued amounting to EUR263,000 (31 December 2018: EUR279,000) and
long-term interest payable of EUR2,479,000 (31 December 2018:
EUR1,614,000) which represents the present value of the long-term
interest accrued but not payable until each tranche matures.
Tranche 1 matures in April 2022, tranche 2 matures in September
2023 and tranche 3 matures in February 2024.
On 24 September 2019, in conjunction with the acquisition of
Aegerion, the EIB facility was repaid.
9. Leases
IFRS 16 Leases disclosures:
Land & Buildings
EUR'000 Other Total
EUR'000 EUR'000
Leased right-of use assets
At 30 June 2019 (unaudited)
At 1 January 2019, net carrying amount - - -
Effect of adopting IFRS 16 725 98 823
Additions at cost 45 - 45
Depreciation charge for the period (108) (16) (124)
----------------- ---------- ----------
At 30 June 2019, net carrying amount
(unaudited) 662 82 744
----------------- ---------- ----------
Lease liabilities
At 30 June 2019 (unaudited)
At 1 January 2019 - - -
Effect of adopting IFRS 16 725 98 823
Addition of right-in-use assets 45 - 45
Payments (125) (18) (143)
Discount unwinding 7 1 8
----------------- ---------- ----------
At 30 June 2019 (unaudited) 652 81 733
----------------- ---------- ----------
10. Copy of the Interim Report
Copies of the Interim Report are available to download from the
Company's website at
www.amrytpharma.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR SDEFISFUSESU
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