8-K

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 06, 2021

Recro Pharma, Inc.

(Exact name of Registrant as Specified in Its Charter)

Pennsylvania	001-36329	26-1523233
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1 E. Uwchlan Ave, Suite 112
Exton, Pennsylvania		19341
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: 770 534-8239

(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01	REPH	The NASDAQ Stock Market LLC

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 6, 2021, Recro Pharma, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2021. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The Company has scheduled a conference call and webcast for 4:30 p.m. Eastern time on May 6, 2021 to discuss these financial results and business updates.

The information disclosed under Item 2.02, including Exhibit 99.1, is being furnished and 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, and shall not be deemed to be 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 filing.

Item 7.01 Regulation FD Disclosure.

Attached as Exhibit 99.2 and furnished for purposes of Regulation FD is a presentation that the Company will post on its website on May 6, 2021 and may use from time to time in presentations or discussions with investors, analysts, and other parties.

The information in this Item 7.01 (including Exhibit 99.2) is being furnished solely to satisfy the requirements of Regulation FD and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are being furnished herewith:

Exhibit No.	Document
99.1	Press release of Recro Pharma, Inc., dated May 6, 2021
99.2	Investor presentation of Recro Pharma, Inc.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 thereunto duly authorized.

			Recro Pharma, Inc.
Date:	May 6, 2021	By:	/s/ J. David Enloe, Jr.
			J. David Enloe, Jr. President and Chief Executive Officer

EX-99.1

Recro Reports First Quarter 2021 Financial Results

Revenues of $16.8 Million Represent an Increase of 70% Compared to Q4 2020 Revenue

Multiple New Business Agreements Signed

Facilities Expansion and Enhancements Continue

Company to Host Conference Call Today at 4:30 p.m. ET

EXTON, PA, May 6, 2021— Recro Pharma, Inc. (“Recro”; NASD:REPH), a dedicated contract development and manufacturing organization (CDMO) solving complex formulation and manufacturing challenges for companies developing oral solid dose drug products, today reported financial results for the first quarter ended March 31, 2021.

“During my first full quarter at Recro, our team initiated execution of an ambitious plan for growth,” said David Enloe, president and chief executive officer. “As announced in March, the four pillars of this growth strategy are (1) expansion and diversification of Recro’s customer base; (2) strengthening our financial position in order to better support both organic and inorganic growth; (3) augmenting our leadership as well as restructuring our operational organization; and finally, (4) continuing to upgrade and expand our facilities and capabilities to support growing customer demand. Today, I am pleased to report that, during the first quarter, we made progress in each area of this strategy.

“The pandemic brought about a decrease in drug sales across multiple therapeutics categories in 2020. Recro was not immune to this slow down as the company was notified by two customers of their decision to terminate two commercial products in 2020. For this reason, we recognize the importance of building a broad and diverse client base that can withstand the fluctuations of a volatile market. With this in mind, we have worked diligently to reduce our dependency on a limited number of programs and are pleased to report that we were awarded multiple contracts in the first quarter alone. This represents one of the most productive quarters Recro has ever had in terms of contract execution for both new and incremental business. I credit this growth as much to Recro’s technical and execution reputation as to our new business development team. Typically, when a CDMO puts a new business development team into place, one can expect a time lag of several quarters before realizing tangible results in terms of new business being signed. We appreciate our business development team’s efforts as they have gotten up to speed and are now able to focus on selling our broad range of services. The contract wins during the first quarter are a combination of contracts with a new manufacturing client, a new clinical trial packaging client, and expansion of projects with several existing customers. These new projects span the entirety of Recro’s capabilities as well as reaching across the spectrum of product development activities, and each represents a step toward establishing sustainable profitability.

“The second step in our growth strategy is to strengthen the company’s financial position in order to better support both organic and inorganic growth. We also made great progress on this front during the quarter. By negotiating important amendments to our credit facility, we expect the company to save approximately $6 millionin cash on an annual basis from a reduction in interest expense. In addition, we expect that our multiple customer wins during the quarter will increase our topline revenue, and we believe the increase in capacity utilization will positively impact margins over time.

“The third prong in our strategy is to augment our leadership as well as to restructure our operational organization. Again, Recro made great strides in this area. First, the company appointed Jim Miller to its board of directors in February. Jim is a true thought-leader in the CDMO sector and we are very pleased to have his guidance and insights as we move forward. In addition, the company significantly enhanced its business development capability with the addition of six new members to its team. During the first quarter, this newly reconstituted team has gained considerable traction, and we look forward to reporting additional successes as they continue to build momentum in the future.

“Last but not least, we continue to enhance our facilities and capabilities in order to best support the needs of our growing customer base and its demand. We have completed validation of our new granulation suite during the first quarter of 2021 and are currently running a registration batch and a feasibility batch in this new suite for two of our new customers, and also running a registration batch phase on a different equipment train for a third customer. We are also seeing returns on our investment in packaging and labeling capabilities as evidenced by the new contracts we have put in place for these services.

“The achievements of the first quarter have demonstrated the deep dedication and significant capabilities of our team. Most importantly, these accomplishments have placed Recro on a strong footing from which to execute through the balance of 2021 as evidenced by our guidance of 2021 revenue growth outlined later in this release.”

First quarter 2021 and recent highlights

Strengthened leadership and organizational improvements:

James (“Jim”) Miller was appointed to the Recro board of directors in February 2021. Mr. Miller is a well-known and highly regarded advisor on drug manufacturing strategy and a pre-eminent authority on the biopharmaceutical CDMO industry. He is founder and former president of PharmSource, the CDMO industry’s principal source of market intelligence, which was sold to Global Data, a London-based, publicly-traded provider of market intelligence services in 2016.

The company recently added six new members to its business development team including sales representatives for its clinical trial services business, as well as regional representatives bolstering the company’s reach in critical life science markets in Northern and Southern California, Boston and the Midwest. With these additions, Recro’s business development team is now comprised of eleven experienced professionals, led by longtime global sales and marketing executive, William Hirschman.

New business growth:

New manufacturing customers. Historically, Recro has specialized in the manufacture of complex, solid, oral dose, commercial stage products. During the first quarter, the company signed a new customer for which it will be performing development work for a modified release capsule. The addition of a new client to this portfolio is an important win for Recro as it allows the company to leverage its expertise and demonstrate its unique capabilities in the CDMO sector.

Existing customer project expansions. During the first quarter, several of Recro’s existing customers signed orders for the expansion of current projects or for the initiation of projects with new molecules. Such expansions are particularly gratifying as they inherently offer efficiencies compared to new customer projects that are being onboarded for the first time. Further, they signify the degree to which Recro’s existing customers value the company’s service, expertise and quality deliverables.

Clinical trial support services. While Recro’s Clinical Trial Support (CTS) services business is less than a year old, it continues to build momentum. Following the recent completion of the company’s first CTS project, Recro has been able to secure and begin work on additional CTS projects during the first quarter. The company believes that the work conducted with these earlier stage projects will provide an important opportunity to win later stage projects with these customers. As such, Recro expects its CTS business to become an important contributor for future growth.

Corporate and financial developments:

Second Amendment to Credit Agreement with Athyrium. During the first quarter, Recro announced the signing of a second amendment to its existing credit facility with Athyrium Capital Management. Through the first amendment, which was announced in Q4 2020, Recro prepaid $9 million of principal without penalty and favorably adjusted the agreement’s leverage ratios and liquidity parameters. Under the terms of the second amendment, the credit facility’s outstanding debt balance was reduced from $116 million to $100 million and the interest rate governing the facility was decreased by 1.5 percent. Furthermore, there will be no additional principal amortization during the remainder of the term of the facility, which runs through March 2023. Athyrium reduced interest and a portion of the principal under the credit agreement in exchange for $9 million of shares of the company’s common stock priced at-the-market under Nasdaq rules, which the company believes demonstrates Athyrium’s support for Recro’s growth potential. Together, these amendments have resulted in Recro successfully de-levering a total of $25 million of debt from its balance sheet, which the company expects to result in cash interest savings of approximately $5 million in 2021 and approximately $6 million for the full year 2022.

Financial results for the three months ended March 31, 2021

At March 31, 2021, Recro had cash and cash equivalents of $11.6 million.

Revenue was $16.8 million for the three months ended March 31, 2021 compared to $21.8 million for the comparable period of 2020. The decrease of $5.0 million was primarily the result of the discontinuation of two commercial product lines by our commercial partners and customer ordering patterns in early 2020. Higher revenues from our clinical trial materials new business growth activities has partially offset the decrease, including revenue from a previously announced new commercial product tech transfer project.

Cost of sales was $14.4 million for three months ended March 31, 2021 compared to $18.4 million for the comparable period of 2020. The decrease of $4.0 million was primarily due to lower commercial manufacturing volumes and reflects lower costs due to the prior year reduction in force as well as certain employment incentive tax credits in 2021.

Selling, general and administrative expenses were $4.7 million for three months ended March 31, 2021 compared to $5.4 million for the comparable period of 2020. The decrease of $0.7 million was primarily related to lower public company costs and stock based compensation expense.

Interest expense was $3.9 million for the three months ended March 31, 2021 and $5.1 million for the comparable period of 2020. The decrease of $1.2 million was primarily due to reduced term loan borrowings under the Credit Agreement with Athyrium as well as a decrease in the LIBOR base rate of interest on our term loans under the Credit Agreement.

Recro reported a net loss of $6.8 million or $0.23 per diluted share for the three months ended March 31, 2021. This compared to a net loss of $7.7 million or $0.33 per diluted share for the comparable period of 2020. EBTIDA, as adjusted* for the period was $2.7 million compared to $2.8 million in the prior year period.

Financial Guidance

For the full year 2021, the company expects revenue to be approximately $68 to $72 million, EBITDA, as adjusted* to be in the range of $15 to $17 million, and net loss to be in the range of $(15.6) million to $(13.6) million. This guidance takes into consideration overcoming the impact from the loss of two commercial programs in 2020, existing market forces, contracts, timing of customer orders, the accuracy of our customers’ product market estimations, and the company’s current beliefs and estimations with respect to success and timing related to growing and diversifying the company’s new business development services revenue. Experience shows that a new business development organization, as there is at Recro, usually takes multiple quarters to optimize performance. The company cautions against extrapolating quarterly results to estimate full year results.

*EBITDA, as adjusted is a non-GAAP financial measure (see reconciliation of non-GAAP financial measures in this release).

Non-GAAP Financial Measures

To supplement our financial results determined by U.S. generally accepted accounting principles (“GAAP”), we have certain non-GAAP information for our business, including EBITDA, as adjusted. We believe this non-GAAP financial measure is helpful in understanding our business as it is useful to investors in allowing for greater transparency of supplemental information used by management. This measure is used by investors, as well as management in assessing our performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. Please see the section of this press release titled “Reconciliation of GAAP to Non-GAAP Financial Measures” for a reconciliation of non-GAAP adjusted EBITDA to its most directly comparable GAAP measure.

Conference call and webcast

Recro management will be hosting a conference call and webcast today beginning at 4:30 p.m. ET. To access the conference call, please dial (844) 243-4691 (local) or (225) 283-0379 (international) at least 10 minutes prior to the start time and refer to conference ID 4898666. A live audio webcast of the call will be available under "Events" in the Investor section of the company's website, https://ir.recropharma.com/events. An archived webcast will be available on the company's website approximately two hours after the event and will be available for 30 days.

About Recro

Recro (NASD: REPH) is a contract development and manufacturing organization (CDMO) with capabilities from early feasibility to commercial manufacturing. With an expertise in solving complex manufacturing problems, Recro is a CDMO providing oral solid dosage form development, end-to-end regulatory support, clinical and commercial manufacturing, and packaging and logistics services to the global pharmaceutical market.

In addition to our experience in handling DEA controlled substances and developing and manufacturing modified release oral solid dosage forms, Recro has the expertise to deliver on our clients’ pharmaceutical development and manufacturing projects, regardless of complexity level. We do all of this in our best-in-class facilities, which total 120,000 square feet, in Gainesville, Georgia.

For more information about Recro’s CDMO solutions, visit recrocdmo.com.

Cautionary statement regarding forward looking statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements, among other things, relate to the company’s financial guidance; ability to manage costs and to achieve its financial goals; to operate under increased leverage and associated lending covenants; to pay its debt under its credit agreement and to maintain relationships with CDMO commercial partners and develop additional commercial partnerships. The words "anticipate", "believe", "could", "estimate", “upcoming”, "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases may be used to identify forward-looking statements in this press release. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Factors that could cause the company’s actual outcomes to differ materially from those expressed in or underlying these forward-looking statements include the ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the customer ordering patterns or inventory rebalancing or disruption in raw materials or supply chain; demand for the company’s services, which depends in part on customers’ research and development and the clinical plans and market success of their products; customers' changing inventory requirements and manufacturing plans; customers and prospective customers decisions to move forward with the company’s manufacturing services; the average profitability, or mix, of the products the company manufactures; the company’s ability to enhance existing or introduce new services in a timely manner; fluctuations in the costs, availability, and suitability of the components of the products the company manufactures, including active pharmaceutical ingredients, excipients, purchased components and raw materials, or the company’s customers facing increasing or new competition. These forward-looking statements should be considered together with the risks and uncertainties that may affect our business and future results presented herein along with those risks and uncertainties discussed in our filings with the Securities and Exchange Commission at www.sec.gov. These forward-looking statements are based on information currently available to us, and we assume no obligation to update any forward-looking statements except as required by applicable law.

Contacts

Stephanie Diaz (Investors)

Vida Strategic Partners

(415) 675-7401

sdiaz@vidasp.com

Tim Brons (Media)

Vida Strategic Partners

(415) 675-7402

tbrons@vidasp.com

Ryan D. Lake (CFO)

Recro

(484) 395-2436

ryan.lake@recroCDMO.com

RECRO PHARMA, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(amounts in thousands, except share and per share data)	March 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	11,558		$	23,760
Accounts receivable		12,428			9,033
Contract asset		6,994			7,330
Inventory		8,636			11,612
Prepaid expenses and other current assets		2,325			2,334
Total current assets		41,941			54,069
Property, plant and equipment, net		42,770			43,841
Intangible assets, net		54			700
Goodwill		4,319			4,319
Other assets		470			486
Total assets	$	89,554		$	103,415
Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable	$	1,538		$	1,804
Current portion of debt		2,579			1,474
Accrued expenses and other current liabilities		3,989			4,525
Total current liabilities		8,106			7,803
Debt, net		88,899			108,097
Other liabilities		1,273			1,615
Total liabilities		98,278			117,515
Commitments and contingencies
Shareholders’ deficit:
Preferred stock, $0.01 par value. 10,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $0.01 par value. 50,000,000 shares authorized, 31,013,319 and 28,601,358 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		310			286
Additional paid-in capital		232,111			219,998
Accumulated deficit		(241,145	)		(234,384	)
Total shareholders’ deficit		(8,724	)		(14,100	)
Total liabilities and shareholders’ deficit	$	89,554		$	103,415

RECRO PHARMA, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

	Three months ended March 31,
(amounts in thousands, except share and per share data)	2021			2020
Revenue	$	16,803		$	21,777
Operating expenses:
Cost of sales (excluding amortization of intangible assets)		14,337			18,254
Selling, general and administrative		4,683			5,446
Amortization of intangible assets		646			646
Total operating expenses		19,666			24,346
Operating loss		(2,863	)		(2,569	)
Interest expense		(3,898	)		(5,123	)
Net loss	$	(6,761	)	$	(7,692	)
Loss per share, basic and diluted	$	(0.23	)	$	(0.33	)
Weighted average shares outstanding		29,737,864			23,394,767

RECRO PHARMA, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Measures

(Unaudited)

To supplement our financial results determined by U.S. generally accepted accounting principles (“GAAP”), we have disclosed in the tables below the following non-GAAP information about EBITDA, as adjusted.

EBITDA, as adjusted, is net income or loss as determined under GAAP excluding interest, depreciation, amortization, non-cash stock-based compensation and charges related to reductions in force as well as the impact of Accounting Standards Update 2014-09 in order to remove the impact of the timing of revenue recognized from profit-sharing arrangements upon transfer of control of the product, which more closely aligns revenue with expected cash receipt.

We believe that non-GAAP financial measures are helpful in understanding our business as it is useful to investors in allowing for greater transparency of supplemental information used by management. EBITDA, as adjusted, is used by investors, as well as management in assessing our performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared.

First quarter results

	Three months ended March 31,
(amounts in millions)	2021			2020
Net loss (GAAP)	$	(6.8	)	$	(7.7	)
Interest expense		3.9			5.1
Depreciation		1.5			1.6
Amortization of intangible assets		0.6			0.6
Stock-based compensation		3.1			3.2
Reduction in force (a)		—			0.8
Revenue recognition (b)		0.4			(0.9	)
EBITDA, as adjusted	$	2.7		$	2.7

Full year guidance

	Year ended December 31,
(amounts in millions)	2021		2020
	(estimate)
Net loss (GAAP)	$(15.6) - (13.6)		$	(27.5	)
Interest expense		14.6		19.2
Depreciation		6.2		6.9
Amortization of intangible assets		0.7		2.6
Stock-based compensation		7.7		10.1
Reduction in force (a)		—		1.1
Revenue recognition (b)		1.4		1.6
EBITDA, as adjusted	$15.0 - 17.0		$	14.0

a)In March 2020, a reduction in force was executed that affected approximately 10% of the work force and were driven by lower commercial volumes.

b)To exclude the impact of Accounting Standards Update 2014-09, "Revenue Recognition," related to non-cash changes in our contract asset.

EX-99.2

InvestorPresentation May 2021 Exhibit 99.2

Non-GAAP To supplement our financial results determined by U.S. generally accepted accounting principles (“GAAP”), we have certain non-GAAP information for our business, including EBITDA, as adjusted. We believe this non-GAAP financial measure is helpful in understanding our business as it is useful to investors in allowing for greater transparency of supplemental information used by management. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Please see the “Reconciliation of GAAP to Non-GAAP Financial Measures” at the end of this presentation for a reconciliation of non-GAAP adjusted EBITDA to its most directly comparable GAAP measure. This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements, among other things, relate to the company’s financial guidance; ability to manage costs and to achieve its financial goals; to operate under increased leverage and associated lending covenants; to pay its debt under its credit agreement and to maintain relationships with CDMO commercial partners and develop additional commercial partnerships. The words "anticipate", "believe", "could", "estimate", “upcoming”, "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases may be used to identify forward-looking statements in this presentation. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Factors that could cause the company’s actual outcomes to differ materially from those expressed in or underlying these forward-looking statements include the ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the customer ordering patterns or inventory rebalancing or disruption in raw materials or supply chain; demand for the company’s services, which depends in part on customers’ research and development and the clinical plans and market success of their products; customers' changing inventory requirements and manufacturing plans; customers and prospective customers decisions to move forward with the company’s manufacturing services; the average profitability, or mix, of the products the company manufactures; the company’s ability to enhance existing or introduce new services in a timely manner; fluctuations in the costs, availability, and suitability of the components of the products the company manufactures, including active pharmaceutical ingredients, excipients, purchased components and raw materials, or the company’s customers facing increasing or new competition. These forward-looking statements should be considered together with the risks and uncertainties that may affect our business and future results presented herein along with those risks and uncertainties discussed in our filings with the Securities and Exchange Commission at www.sec.gov. These forward-looking statements are based on information currently available to us, and we assume no obligation to update any forward-looking statements except as required by applicable law. Forward Looking Statements

Recro is a Leading CDMO For Oral Solid Dosage Forms 2 DEA-regulated and high potency compounds Regulatory guidance and support from concept through commercial Flexible-scale clinical and commercial manufacturing and packaging Simple to complex formulation approaches Modified Release (MR) technology Phase-appropriate analytical approaches Development Manufacturing

14 3 Multiple Powerful Industry Tailwinds in the CDMO Market Drug Candidates by Therapeutic Compound Total % Outsourced(2) 28.8% 29.6% 30.4% 31.3% 32.2% 33.7% 35.7% Continued outsourced penetration as biotech and pharma sponsors recognize the value of CDMO services 6.6% 6.4% 6.1% 8.1% 2015-2021 CAGR Large and Growing CDMO Market(1) Source: William Blair Equity Research. Drug product outsourced market. Source: QuintilesIMS / IQVIA Recro market focus is ~50% of total CDMO market Development Phase Small Oligos Large ADCs Others Total Phase 1 1,458 66 1,076 47 459 3,106 Phase 2 1,560 83 1,057 29 496 3,225 Phase 3 506 21 355 6 114 1,002 Registration 203 4 119 -- 70 396 Launched 2,114 12 1,182 6 550 3,864 Total 5,841 186 3,789 88 1,689 11,593

Investment Highlights Re-Organized Company Poised for Growth and Diversification Success in Robust Market State-of-the-Art, Newly Upgraded Facilities, Available Capacity 30+ Years of Successful Commercial Manufacturing for Multiple Global Customers Solid Base of Development and Commercial Customers Highly Experienced Management Team and Talented Workforce to Drive Future Growth Strong Regulatory Track Record Spanning Multiple Countries and Agencies NDA Ownership and Profit-Sharing Structure for Multiple Drug Assets End-to-End Capabilities with Unique Expertise Solving Complex Solid Oral Dose Formulation & Development Challenges 4

Executing on Near-Term Reorganization Plan to Strengthen Business In 2020 and 2021, key CDMO executives appointed to leadership and board in addition to strengthening the business development team with six new hires Deploying best practices across entire organization Strengthening Leadership and Organization Strengthening Balance Sheet Recently restructured and reduced debt to improve balance sheet $25M reduction in debt principal balance and a 1.5% interest rate reduction Stronger balance sheet best positions company for organic and inorganic growth Expanding and Diversifying Customer Base Continuing to add new manufacturing customers as well as expanding existing customer projects Commercial manufacturing business continues to grow In 2020, launched clinical trials materials business to support early-stage customers Upgrading and expanding capabilities to best support clinical stage projects, expanding commercial programs, and high value tech transfers Constructed two new manufacturing suites, as well as adding capabilities for smaller scale production, high potency, and clinical trial support services Enhancing Capabilities and Competencies 5

A Leading CDMO with Fully-Integrated Solutions for Oral Solid Dose Drug Products Capabilities Overview Formulation Development Analytical Methods Development Pharmaceutical Manufacturing Regulatory Support Formulation Development Optimization CTM Manufacture Scale-Up Regulatory Filing PPQ ProductLaunch Commercial Supply Development Expertise Quality Assurance Manufacturing Expertise Ability to Take Oral Solid Dose Products from Early Development to Commercialization Pharma Packaging and Logistics Contract packaging and logistics to maintain safety and integrity of products Single line operation with annual maximum capacity of 2.5M bottles per shift Able to package round or square bottles 40cc – 500cc and up to 500 units/bottle Primary and secondary packaging, DSCSA-compliant serialization services, and timely shipping Formulation services support the development of a range of pharma products for capsules and tablets (at a development scale) Expertise in complex formulations including extended release, high potency, and other complex oral formulation, often resulting in IP generation Reformulation capabilities Physical characterization and excipient compatibility Conduct feasibility studies, identify critical variables and inefficiencies, and optimize process Diverse analytical services designed to assess quality Best-in-class facilities house full range of analytical equipment and testing Analytical testing: Raw material, WIP, and finished product testing ICH stability Method development / validation Analytical equipment: Chromatography Spectroscopy Stability chambers Capable of serving clients from small, early-phase batches to clinical and commercial production Structured tech transfer services Key technologies: Milling Blending Compression Spray granulation Rotary granulation Particle / bead coating Encapsulation Extensive experience across all steps of drug approval (e.g., IND, NDA, DMF) Strong regulatory support services, including handling communications with the FDA on behalf of sponsor companies and consultation and guidance for client FDA meetings and responses Utilizes industry best practices including standardized reports for eCTD submission and pharmacovigilance reporting support “Start with Recro, Stay with Recro” 6

Solid Base of Development & Commercial Customers Development Customers Commercial Customers End-to-end solutions for customers from early-stage development to scaled commercial production Biotech and / or specialty pharma focused companies with NCE or 505(b)(2) oral dosage forms Small / mid-size NCE public companies or well-funded, venture-backed private companies Early in drug development process and looking to move quickly and / or have time sensitive projects Development revenue is expected to account for a high single digit percentage of total revenue for 2021E Strong commercial customer base stabilizes business and minimizes fluctuations in revenues Long-term relationships (20+ years) with key commercial partners and fully contracted through 2023 at the earliest, 2025 at the far end Commercial customer forecasts (generally 12-to-24-month projections) with binding PO’s typically for first three months, provides demand visibility and helps optimize supply chain execution Current Development Pipeline (1) 7 Verapamil PM/Verelan™ SR/PM Recro owns NDA and DMF Branded & authorized generic sustained release capsules Complex formulation and manufacturing – proprietary know-how Exclusive sole supplier Mature relatively stable/flat(2) single player market Verapamil SR Recro owns NDA and DMF Authorized generic sustained release capsules, including an exclusive dosage form Complex formulation and manufacturing–proprietary ‘know-how’ Exclusive sole supplier Mature relatively stable/flat(2) two player market – Teva maintains ~50% market share Ritalin LA ™/Focalin XR Recro owns DMF Branded & authorized generic sustained release capsules – sold US/OUS Complex formulation and manufacturing Exclusive sole supplier Mature market dominated by Novartis/Sandoz(2) Regulatory & tech transfer risk and cost given Recro quality track record and lifecycle of product Represents new business projects which are signed as of April 2021. Excludes impact of COVID-19 on market dynamics.

Profit-Sharing Programs Strengthen Recro’s Business Five-year contract extension to December 2023. Six-year contract extension through 2024. Three-year contract extension through 2024. Ritalin LA® Once daily ADHD treatment marketed by Novartis(1) Focalin XR® Extended-release ADHD treatment marketed by Novartis(1) Verapamil / Verelan CV/high blood pressure treatments marketed by Teva(2) and Lannett(3) Recro owns certain NDAs and related Authorized Generic Licenses and receives profit-sharing revenue from product sales in addition to manufacturing revenue Elevated profitability with late lifecycle products 8

State-of-the-Art Facilities Commercial and Controlled Substance Development and High Potency “Chestnut facility” in Gainesville, GA 24,000 ft2 ~30 FTEs Opened 2018 Current capacity (single shift): 20-25% Leased through 2025 with renewal options “Gould facility” in Gainesville, GA Size: 97,000 ft2 on ~150 acres ~170 FTEs Opened 1990 Current capacity (single shift): ~50% Facility and site fully owned Significant experience transitioning projects from late-phase development to robust, long-term commercial production Chestnut performs development and cGMP (pre-commercial) development manufacturing work before tech transfer to Gould site. High potency commercial production remains at Chestnut 9

Highly Experienced Management Team and Talented Workforce to Drive Future Growth Workforce Overview Management Overview ~200 FTEs Highly educated team ~20% hold advanced degrees ~60% hold Bachelor’s degree or higher Average employee tenure: ~10 years Employee turnover well below industry average Experienced management team with an average of >9 years of experience at Recro Employees by Function(1) As of February 2021. Other Indirect includes warehouse, materials management, facilities, validation, site services, and regulatory affairs. Support includes finance, admin, IT, HR, and BD. (2) (3) Name and Title Years’ Experience Select Prior Experience David EnloeChief Executive Officer 25+ Ryan LakeChief Financial Officer 20+ Scott RizzoSVP, General Manager 25+ Bill Hirschman VP, Sales and Marketing 30+ Shazib Jamil VP, Supply Chain 20+ Carla Lusby VP, Finance 20+ Dr. Richard Sidwell VP, Chief Scientific Officer 25+ David Smithwick VP, Technical Operations ~25 Sherida Vandiver VP, Quality 30+ R. Wayne Wiley VP, Regulatory Affairs & Pharmacovigilance 30+ 10

Successful inspection history with FDA, DEA, and Foreign Health Ministries. Regular Quality audits by clients and consultants. Strong Compliance and Inspection History 8 DEA inspections over 10 years 8 FDA audits since 2006 7 Foreign Health Ministries audits over 15 years 2 Quality Audits per Month 8 Successful PAI’s with 3 Waived FDA Agencies include: ANVISA Danish Inspectorate Turkish MOH 11

Opportunities for Continued Growth and Improvement 12 Value-add Director appointment Leadership team additions with deep industry expertise Business Development, Technical staff expansion Continued training and application of industry best practices Additional early phase client wins Broaden relationships and business with current client base Expand second source supply agreements for products in-market Broaden to new clinical trials to further support contracts Continue positive free cash flow generation from current operations Additional reduction of debt Generate revenue growth to further strengthen cash position Expansion of clinical trial service offerings Enhance tech transfer expertise with current Japanese project Add incremental capabilities through inorganic growth under evaluation Strengthening Leadership and Organization Expanding and Diversifying Customer Base Strengthening Balance Sheet Enhancing Capabilities and Competencies

Financial Highlights 13 Q1 2021 Financial Results Revenue: $16.8 million Net Loss: $(6.8) million EBITDA, as adjusted(1): $2.7 million Cash and Cash Equivalents: $11.6 million Revenue and cash flow positive contract development and manufacturing (CDMO) business Full Year 2021 Forecasted Financial Results Revenue: $68 to $72 million Net Loss: $(15.6) to $(13.6) million EBITDA, as adjusted(1): $15 to $17 million New business growth in Formulation & Development Services CTM and Logistics Services launched in Q2 2020 seeing positive results; expanding business development team Recently amended Credit Agreement with its partner Athyrium successfully de-levering $25 million in debt and strengthening balance sheet EBITDA, as adjusted is a non-GAAP financial measure. See reconciliation on last page of presentation.

Reconciliation of Non-GAAP Financial Measures (unaudited) To supplement our financial results determined by U.S. generally accepted accounting principles (“GAAP”), we have disclosed in the tables below the following non-GAAP information about EBITDA, as adjusted. EBITDA, as adjusted, is net income or loss as determined under GAAP excluding interest, depreciation, amortization, non-cash stock-based compensation and charges related to reductions in force as well as the impact of Accounting Standards Update 2014-09 in order to remove the impact of the timing of revenue recognized from profit-sharing arrangements upon transfer of control of the product, which more closely aligns revenue with expected cash receipt. We believe that non-GAAP financial measures are helpful in understanding our business as it is useful to investors in allowing for greater transparency of supplemental information used by management. EBITDA, as adjusted, is used by investors, as well as management in assessing our performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. In March 2020, a reduction in force was executed that affected approximately 10% of the work force and were driven by lower commercial volumes. To exclude the impact of Accounting Standards Update 2014-09, "Revenue Recognition" related to non-cash changes in our contract asset. 14 First Quarter Results: Full Year 2021 Guidance:

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Document And Entity Information	May 06, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 06, 2021
Entity Registrant Name	Recro Pharma, Inc.
Entity Central Index Key	0001588972
Entity Emerging Growth Company	false
Entity File Number	001-36329
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	26-1523233
Entity Address, Address Line One	1 E. Uwchlan Ave, Suite 112
Entity Address, City or Town	Exton
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19341
City Area Code	770
Local Phone Number	534-8239
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.01
Trading Symbol	REPH
Security Exchange Name	NASDAQ