UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): November 9, 2016
BIOSPECIFICS TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
Delaware | 001-34236 | 11-3054851 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
35 Wilbur Street | 11563 |
Lynbrook, NY | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 516.593.7000
N/A
(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 (see General Instruction A.2. below):
[ ] 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))
Introductory Comment
Throughout this Current Report on Form 8-K, the terms we, us, our and Company refer to BioSpecifics Technologies Corp.
Item 2.02. | Results of Operations and Financial Condition |
On November 9, 2016, the Company announced its financial and operating results for the fiscal quarter ended September 30, 2016. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be 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 shall be expressly set forth by specific reference in such filing
Item 9.01. | Financial Statements and Exhibits |
(d) |
Exhibits. |
Exhibit | Description |
99.1 | Press Release dated November 9, 2016 |
SIGNATURE
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.
Dated: November 9, 2016
BioSpecifics Technologies Corp. | |
By: | /s/ Thomas L. Wegman |
Name: Thomas L. Wegman | |
Title: President |
EXHIBIT INDEX
Exhibit No. | Description |
99.1 | Press Release dated November 9, 2016 |
BioSpecifics Technologies Corp. Reports Third Quarter 2016 Financial Results
LYNBROOK, NY November 9, 2016 BioSpecifics Technologies Corp. (NASDAQ: BSTC), a biopharmaceutical company that originated and continues to develop collagenase based-therapies with a first in class collagenase-based product collagenase clostridium histolyticum, or CCH, marketed as XIAFLEX® in the U.S. and Xiapex® in Europe announced today its financial results for the third quarter ended September 30, 2016 and provided a corporate update.
"BioSpecifics concentrates on developing XIAFLEX for medically necessary indications, and we look forward to the initiation of our Phase 1 clinical trial for the treatment of uterine fibroids by the end of this year, said Thomas L. Wegman, President of BioSpecifics. Our partner Endo continues to see XIAFLEX as a core U.S. branded product and growth driver going forward. Cellulite is their main focus for non-marketed indications and they plan to announce Phase 2b data upon the completion of that trial. Endo is conducting a full commercial assessment and analysis of the R&D pipeline which will determine the clinical trial timelines moving forward.
Third Quarter 2016 Financial Results
BioSpecifics reported net income of $3.1 million for the third quarter ended September 30, 2016, or $0.43 per basic share and $0.42 per share on a fully diluted basis, compared to net income of $2.9 million, or $0.42 per basic share and $0.39 per share on a fully diluted basis, for the same period in 2015.
Total revenue for the third quarter ended September 30, 2016 was $6.9 million, compared to $6.3 million for the same period in 2015. The increase in total revenue was due to increased royalties received and licensing fees related to the exercise of an opt-in right by Endo International plc (Endo) for the human lipoma indication.
Royalty and mark-up on cost of goods sold (COGS) revenues recognized under BioSpecifics' agreement with Endo for the third quarter ended September 30, 2016 were $6.1 million, compared to $5.3 million for the same period in 2015, an increase of $0.8 million, or 15 percent. This increase in royalties and the mark-up on cost of goods sold was primarily due to the increase in sales of XIAFLEX for the treatment of Dupuytrens contracture and Peyronies disease.
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Licensing revenue consists of licensing fees, sublicensing fees and milestones. BioSpecifics recognized licensing fees related to the exercise of an opt-in right by Endo for the human lipoma indication of $750,000 for the three months ended September 30, 2016 as compared to zero in the corresponding 2015 period. In addition, the Company recognized certain licensing fees related to the cash payments received under the agreement with Endo in prior years and amortized them over the expected development period. For each of the three month periods ended September 30, 2016 and 2015, the Company recognized licensing revenue related to the development of injectable collagenase of approximately $12,000.
Milestone revenue recognized for the three months ended September 30, 2016 was zero as compared to $1.0 million for the corresponding 2015 period. The $1.0 million milestone revenue recognized in the corresponding 2015 period related to the first commercial sale of XIAFLEX by Asahi Kasei Pharma Corporation for the treatment of Dupuytren's contracture in Japan.
Research and development (R&D) expenses for each of the third quarters ended September 30, 2016 and 2015 were $0.3 million.
General and administrative expenses for the third quarter ended September 30, 2016 were $1.8 million, compared to $1.7 million for the same period in 2015.
Provision for income taxes for the third quarter ended September 30, 2016 were $1.8 million, compared to $1.5 million for the same period in 2015.
As of September 30, 2016, BioSpecifics had cash and cash equivalents and investments of $51.3 million, compared to $37.1 million as of December 31, 2015.
XIAFLEX U.S. Commercial Highlights
On November 8, 2016, Endo reported U.S. commercial highlights for XIAFLEX for the third quarter of 2016 (Endos third quarter 2016 financials are reported in BioSpecifics fourth quarter 2016 financials). For the third quarter of 2016, U.S. net sales were $47.7 million, an increase of 19 percent compared to the third quarter of 2015.
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CCH Pipeline Updates and Anticipated Upcoming Milestones
BioSpecifics manages the development of collagenase clostridium histolyticum (CCH) for uterine fibroids, and initiates the development of CCH in new potential indications, not licensed by Endo. In addition to Dupuytrens contracture and Peyronies disease, Endos licensed rights include human and canine lipoma, adhesive capsulitis, cellulite, lateral hip fat and plantar fibromatosis.
|
BioSpecifics expects to initiate a Phase 1 clinical trial of CCH in uterine fibroids in the fourth quarter of 2016. | |
|
Top-line data for the Phase 2b clinical trial of CCH for cellulite will be reported upon the completion of that trial. | |
|
Endo has announced that they are conducting a full commercial assessment and analysis for the R&D pipeline to determine the clinical trial timelines moving forward. |
BioSpecifics will present a company update at the upcoming Stifel 2016 Healthcare Conference on Tuesday, November 15, 2016 at 8:00 AM E.T. in New York, NY.
Webcast and Conference Call
BioSpecifics will host a
conference call today at 5:00 p.m. ET to discuss these third quarter 2016
results. In order to participate in the conference call, please dial
1-866-364-3867 (domestic) or 1-412-902-4213 (international). The live webcast
can be accessed under Events and Presentation in the Investors section of
the Companys website at www.biospecifics.com or you may use the link:
https://www.webcaster4.com/Webcast/Page/967/17954.
A replay of the call will be available one hour after the end of the conference on November 9, 2016 until 5:00 p.m. ET on November 16, 2016. To access the replay, please dial 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and reference the access code 10095321. The archived webcast will be available for ninety days in the Investors section of BioSpecifics website at www.biospecifics.com.
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About BioSpecifics Technologies Corp.
BioSpecifics
Technologies Corp. is a biopharmaceutical company that has developed injectable
collagenase for twelve clinical indications to date. Injectable collagenase is
marketed as XIAFLEX® in the U.S. for the treatment of Dupuytren's contracture
and Peyronie's disease by BioSpecifics' partner, Endo International plc (Endo).
XIAFLEX® is also commercialized in Japan, Europe, Canada and Australia for
Dupuytren's contracture and also for Peyronie's disease in Europe and Australia.
Swedish Orphan Biovitrum AB (Sobi) has marketing rights for Xiapex® (the
European tradename for XIAFLEX) in Europe and certain Eurasian countries and
Asahi Kasei Pharma Corporation (Asahi) has marketing rights in Japan. Sobi is
selling Xiapex in Europe for the treatment of Dupuytren's contracture and
Peyronie's disease and Asahi is selling XIAFLEX for the treatment of Dupuytren's
contracture in Japan. The XIAFLEX research and development pipeline includes several
additional promising indications. Endo is currently managing development of CCH
for Dupuytrens nodules, cellulite, adhesive capsulitis, human and canine
lipoma, lateral hip fat and plantar fibromatosis. BioSpecifics is managing the
development of CCH for uterine fibroids and plans to initiate clinical
development in the fourth quarter of 2016. For more information, please visit
www.biospecifics.com.
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Forward-Looking Statements
This earnings release
includes forward-looking statements within the meaning of, and made pursuant
to the safe harbor provisions of, the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact, including
statements regarding the companys strategy, future operations, future financial
position, future revenues, projected costs, prospects, plans and objectives of
management, expected revenue growth, and the assumptions underlying or relating
to such statements, are forward-looking statements. The forward-looking
statements in this earnings release include statements concerning, among other
things, the timing of initiation of a Phase 1 clinical trial of CCH in uterine
fibroids; whether Endo will continue to see XIAFLEX as a core U.S. branded
product and growth driver going forward; the timing of Endos announcement of
Phase 2b data of CCH for cellulite; whether and when BioSpecifics will hear from
Endo the results of their full commercial assessment and analysis regarding the
CCH pipeline; and the timing of Endos determination of clinical trial timelines
for additional indications. In some cases, these statements can be identified by
forward-looking words such as believe, expect, plan, may, will, can,
and could, the negative or plural of these words, and other similar
expressions. These forward-looking statements are predictions based on
BioSpecifics current expectations and its projections about future events and
various assumptions. There can be no assurance that BioSpecifics will realize
its expectations or that BioSpecifics beliefs will prove correct. There are a
number of important factors that could cause BioSpecifics actual results to
differ materially from those indicated by such forward-looking statements,
including the timing of regulatory filings and action; the ability of Endo and
its partners, Asahi Kasei Pharma Corporation and Swedish Orphan Biovitrum AB, to
achieve their objectives for XIAFLEX in their applicable territories; the market
for XIAFLEX in, and timing, initiation and outcome of clinical trials for,
additional indications including adhesive capsulitis, cellulite, human lipoma,
canine lipoma, uterine fibroids, plantar fibromatosis, lateral hip fat and
Dupuytrens nodules all of which will determine the amount of milestone,
royalty, mark-up on cost of goods sold, license and sublicense income
BioSpecifics may receive; the potential of CCH to be used in additional
indications; Endo modifying its objectives or allocating resources other than to
XIAFLEX; and other risk factors identified in BioSpecifics Annual Report on
Form 10-K for the year ended December 31, 2015, Quarterly Report on Form 10-Q
for the quarter ended March 31, 2016, Quarterly Report on Form 10-Q for the
quarter ended June 30, 2016 and BioSpecifics Current Reports on Form 8-K filed
with the Securities and Exchange Commission. All forward-looking statements
included in this earnings release are made as of the date hereof, are expressly
qualified in their entirety by the cautionary statements included in this earnings release and, except as may
be required by law, BioSpecifics assumes no obligation to update these
forward-looking statements.
Contact: |
BioSpecifics Technologies Corp. |
Thomas L. Wegman, President |
(516) 593-7000 |
thomas_wegman@biospecifics.com |
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BioSpecifics Technologies Corp. |
Condensed Consolidated Income Statement |
(Unaudited) |
Three months ended | Nine months ended | |||||||||||
September 30, | September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Revenues: | ||||||||||||
Royalties | $ | 6,119,815 | $ | 5,277,494 | $ | 18,843,273 | $ | 15,574,234 | ||||
Licensing revenue | 762,345 | 1,012,345 | 787,034 | 1,037,034 | ||||||||
Total Revenues | 6,882,160 | 6,289,839 | 19,630,307 | 16,611,268 | ||||||||
Costs and expenses: | ||||||||||||
Research and development | 312,907 | 258,837 | 1,005,884 | 755,038 | ||||||||
General and administrative | 1,843,368 | 1,709,044 | 5,909,785 | 5,307,431 | ||||||||
Total costs and expenses | 2,156,275 | 1,967,881 | 6,915,669 | 6,062,469 | ||||||||
Operating income | 4,725,885 | 4,321,958 | 12,714,638 | 10,548,799 | ||||||||
Other income: | ||||||||||||
Interest income | 80,674 | 26,744 | 200,704 | 58,946 | ||||||||
Other, net | 6,254 | 1,477 | 37,448 | 6,110 | ||||||||
86,928 | 28,221 | 238,152 | 65,056 | |||||||||
Income before income tax expense | 4,812,813 | 4,350,179 | 12,952,790 | 10,613,855 | ||||||||
Provision for income tax expense | (1,759,220 | ) | (1,479,200 | ) | (4,497,359 | ) | (3,654,772 | ) | ||||
Net income | $ | 3,053,593 | $ | 2,870,979 | $ | 8,455,431 | $ | 6,959,083 | ||||
Earnings per share: | ||||||||||||
Basic | $ | 0.43 | $ | 0.42 | $ | 1.20 | $ | 1.02 | ||||
Diluted | $ | 0.42 | $ | 0.39 | $ | 1.16 | $ | 0.96 | ||||
Shares used in calculation of earnings per share: | ||||||||||||
Basic | 7,062,543 | 6,892,637 | 7,031,068 | 6,797,506 | ||||||||
Diluted | 7,280,375 | 7,316,287 | 7,277,780 | 7,259,338 |
BioSpecifics Technologies Corp. |
Selected Condensed Consolidated Balance Sheet Data |
(Unaudited) | ||||||
September 30, | December 31, | |||||
2016 | 2015(1) | |||||
Cash and cash equivalents | $ | 4,747,745 | $ | 5,137,875 | ||
Investments | 46,518,669 | 31,944,083 | ||||
Accounts and income tax receivable | 3,846,752 | 3,464,763 | ||||
Deferred tax assets | 3,370,836 | 622,972 | ||||
Working capital | 52,867,271 | 37,530,357 | ||||
Total assets | 62,436,648 | 45,698,113 | ||||
Long-term liabilities | 6,642,441 | 49,379 | ||||
Total stockholders' equity | 53,221,390 | 44,810,209 |
(1) The selected consolidated balance sheet information for the year ended December 31, 2015 have been derived from the audited financial statements but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.