UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 2017
Intersect ENT, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36545 | 20-0280837 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Intersect ENT, Inc.
1555 Adams Drive
Menlo Park, California 94025
(Address of principal executive offices, including zip code)
(650) 641-2100
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
On May 2, 2017, Intersect ENT, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2017. A copy of the press release is furnished as an Exhibit 99.1 to this Current Report and is incorporated herein by reference.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit No. |
Description | |
| 99.1 | Press release entitled “Intersect ENT Reports First Quarter 2017 Results” dated May 2, 2017. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Intersect ENT, Inc. | ||||||
| Dated: May 2, 2017 | ||||||
| By: | /s/ Jeryl L. Hilleman | |||||
| Jeryl L. Hilleman | ||||||
| Chief Financial Officer | ||||||
INDEX TO EXHIBITS
| Exhibit |
Description | |
| 99.1 | Press release entitled “Intersect ENT Reports First Quarter 2017 Results” dated May 2, 2017. | |
Exhibit 99.1
Intersect ENT Reports First Quarter 2017 Results
MENLO PARK, Calif.—May 2, 2017 — Intersect ENT, Inc. (NASDAQ:XENT), a company dedicated to improving the quality of life for patients with ear, nose and throat conditions, today reported financial results for the first quarter ended March 31, 2017.
First Quarter Financial Highlights
| • | First quarter 2017 revenue was $20.5 million, a 23% increase over the first quarter 2016. |
| • | First quarter 2017 gross margin was 86% compared to 81% in the first quarter 2016. |
First Quarter Business Highlights
| • | In February 2017, the company received approval from the U.S. Food and Drug Administration (FDA) for its PROPEL® Contour steroid releasing sinus implant. PROPEL Contour features an innovative hourglass design that facilitates treatment of patients with chronic sinusitis in the frontal (behind the forehead) and maxillary (behind the cheeks) sinuses. With this approval, Intersect ENT’s PROPEL® family of steroid releasing implants allows for treatment of patients undergoing ethmoid, frontal or maxillary surgeries, which represent the majority of procedures for the treatment of chronic sinusitis. |
| • | In March 2017, the company announced the submission of a New Drug Application (NDA) to the FDA for review and approval of its investigational RESOLVE steroid releasing implant designed to provide a cost-effective, less invasive solution for patients that have had ethmoid sinus surgery, yet suffer from recurrent sinus obstruction. The RESOLVE implant is designed to be placed in the ethmoid sinus in a procedure conducted in the physician’s office as an alternative to other treatment options such as further medical therapy or revision surgery. |
First Quarter Financial Results
Total revenue grew to $20.5 million for the first quarter of 2017, compared to $16.7 million for the same period of 2016, an increase of 23%. The increase in revenue was primarily attributable to growth in adoption of PROPEL® and PROPEL® Mini, including an increase in the average selling price, and to initial sales of PROPEL Contour.
Gross profit for the first quarter of 2017 was $17.6 million, representing an 86% gross margin, compared to $13.5 million, representing an 81% gross margin, in the same period of the prior year. The increase in gross profit was primarily attributable to the continued increases in production efficiency, an increase in price and sales of PROPEL Contour inventory that was produced prior to FDA approval and expensed in the fourth quarter of 2016.
Operating expenses for the first quarter of 2017 were $24.5 million, compared to $21.9 million in the same period of the prior year, representing an increase of 12%. R&D expenses decreased slightly, dropping to $4.2 million in the first quarter of 2017 from $4.5 million in the same period of 2016. SG&A increased to $20.3 million from $17.4 million in the first quarter of 2016, primarily driven by increased headcount and personnel costs.
Cash, cash equivalents and short-term investments totaled $98.4 million as of March 31, 2017.
Outlook
The company expects to achieve revenue in the second quarter 2017 of $22.5-$22.7 million. For the full year 2017, the company is raising the revenue outlook to $89-$91 million from the prior guidance of $87-$89 million. The company expects to achieve a full year 2017 gross margin of approximately 84%, on the high end of the previously stated outlook of 83-84%, and operating expenses in the range of $96-$98 million.
Webcast and Conference Call Information
Intersect ENT will host a conference call today at 4:30 p.m. ET to discuss the company’s first quarter 2017 results and business outlook. To access the conference call via the internet, go to the “Investor Relations” page of the company’s web site at www.intersectENT.com. To access the live conference call via phone, dial 1-844-850-0548 and ask to join the Intersect ENT call. International callers may access the live call by dialing 1-412-317-5205. Participants may expedite telephone access by pre-registering for the call using the following link: http://dpregister.com/10104115.
A replay of the conference call may be accessed that same day after 8:00 p.m. ET at www.intersectENT.com or via phone at 1-877-344-7529 or 1-412-317-0088 for international callers. The reference number to enter the replay of the call is 10104115. The dial-in replay will be available for a week after the call and via the internet for approximately one month.
About Intersect ENT
Intersect ENT is dedicated to transforming the landscape of care for patients with ear, nose and throat conditions. The company’s PROPEL family of dissolvable steroid releasing implants are clinically proven to improve outcomes for chronic sinusitis patients undergoing sinus surgery. In addition, Intersect ENT is continuing to expand its portfolio of products based on the company’s unique localized steroid releasing technology and is committed to broadening patient access to less invasive and more cost effective care.
Intersect ENT: Delivering Innovation. Where It’s Needed.
For additional information on the company or the products including risks and benefits please visit www.IntersectENT.com.
The RESOLVE steroid releasing implant has not been approved by the FDA and is available for investigational use only.
Intersect ENT® and PROPEL® are registered trademarks of Intersect ENT, Inc.
Forward-Looking Statements
The statements in this press release regarding Intersect ENT’s continued growth, financial outlook, and product development are “forward-looking” statements. These forward-looking statements are based on Intersect ENT’s current expectations and inherently involve significant risks and uncertainties. These statements and risks include Intersect ENT’s ability to provide solutions to improve surgical outcomes, Intersect ENT’s ability to expand the use and adoption of its current products and advance its pipeline, Intersect ENT’s ability to obtain and maintain FDA or other regulatory approvals, the ability to procure and maintain adequate coverage and reimbursement for our products and/or the procedures in which they are used, and Intersect ENT’s projections about 2017 revenue, gross margin, operating expenses and cash usage. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties which are described in the company’s filings on Form 10-K, Form 10-Q and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov). Intersect ENT does not undertake any obligation to update forward-looking statements and expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein.
XENT-F
Intersect ENT, Inc.
Jeri Hilleman, 650-641-2105:
ir@intersectENT.com
Intersect ENT, Inc.
Condensed Statements of Operations
(in thousands, except percentages and per share data)
(unaudited)
| Three Months Ended March 31, |
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| 2017 | 2016 | |||||||
| Revenue |
$ | 20,474 | $ | 16,692 | ||||
| Cost of sales |
2,884 | 3,210 | ||||||
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| Gross profit |
17,590 | 13,482 | ||||||
| Gross margin |
86 | % | 81 | % | ||||
| Operating expenses: |
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| Selling, general and administrative |
20,319 | 17,393 | ||||||
| Research and development |
4,220 | 4,495 | ||||||
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| Total operating expenses |
24,539 | 21,888 | ||||||
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| Loss from operations |
(6,949 | ) | (8,406 | ) | ||||
| Interest income and other, net |
268 | 185 | ||||||
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| Net loss |
$ | (6,681 | ) | $ | (8,221 | ) | ||
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| Net loss per share, basic and diluted |
$ | (0.23 | ) | $ | (0.29 | ) | ||
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| Weighted average common shares used to compute net loss per share, basic and diluted |
28,708 | 28,207 | ||||||
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Intersect ENT, Inc.
Condensed Balance Sheets
(in thousands)
(unaudited)
| March 31, 2017 |
December 31, 2016 |
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| Assets |
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| Current assets: |
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| Cash, cash equivalents and short-term investments |
$ | 98,364 | $ | 103,945 | ||||
| Accounts receivable, net |
12,328 | 14,421 | ||||||
| Inventory |
7,099 | 5,613 | ||||||
| Prepaid expenses and other current assets |
1,389 | 1,313 | ||||||
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| Total current assets |
119,180 | 125,292 | ||||||
| Property and equipment, net |
4,188 | 4,127 | ||||||
| Other non-current assets |
308 | 358 | ||||||
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| Total assets |
$ | 123,676 | $ | 129,777 | ||||
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| Liabilities and Stockholders’ Equity |
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| Current liabilities: |
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| Accounts payable |
$ | 2,289 | $ | 3,267 | ||||
| Accrued compensation |
9,323 | 10,152 | ||||||
| Other current liabilities |
978 | 945 | ||||||
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| Total current liabilities |
12,590 | 14,364 | ||||||
| Deferred rent |
925 | 1,016 | ||||||
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| Total liabilities |
13,515 | 15,380 | ||||||
| Total stockholders’ equity |
110,161 | 114,397 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 123,676 | $ | 129,777 | ||||
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