Forward Pharma Reports Financial and Operating Results for the Year Ended December 31, 2021
COPENHAGEN, Denmark, April 08, 2022 (GLOBE NEWSWIRE) -- Forward Pharma A/S (NASDAQ:FWP) ("we," "Forward" or the "Company" and, together with its subsidiaries, the "Group"), today reported consolidated financial results for the year ended December 31, 2021. Our net loss for the year ended December 31, 2021 was $1.9 million, or $0.02 per share, versus a net loss of $6.4 million, or $0.07 per share, for the year ended December 31, 2020. Our research, development, general and administrative costs increased from $3.4 million for the year ended December 31, 2020 to $3.9 million for the year ended December 31, 2021. Our net loss for the year ended December 31, 2021 was favorably impacted by a non-cash foreign exchange gain of $2.2 million that is primarily related to our U.S. Dollar cash holdings and the strengthening of the U.S. Dollar compared to the Danish Kroner.
Operating Results for the Years Ended December 31, 2021 and 2020
Our research and development costs for the years ended December 31, 2021 and 2020 were $226,000 and $327,000, respectively. The decrease in research and development costs for the year ended December 31, 2021 is the result of lower costs incurred in connection with the EP2801355 patent ("‘355 Patent") opposition in Europe ("Opposition Proceeding") and lower share-based compensation.
Our general and administrative costs for the years ended December 31, 2021 and 2020 were $3.6 million and $3.1 million, respectively. The increase in general and administrative costs for the year ended December 31, 2021 is the result of increased professional fees and insurance costs offset by a reduction in share-based compensation.
During the year ended December 31, 2021, the Group recognized a foreign exchange gain of $2.2 million, which resulted primarily from the strengthening of the U.S. Dollar compared to the Danish Kroner during the period. During the year ended December 31, 2020, the Group recognized a foreign exchange loss of $3.0 million, which resulted primarily from the weakening of the U.S. Dollar compared to the Danish Kroner during the period.
Financial Position as of December 31, 2021
At December 31, 2021, the Group had cash and cash equivalents of $70.8 million and working capital of $70.8 million. The Group has no material long-term obligations. We believe we have sufficient liquidity to allow us to meet our planned operating activities in the normal course of business for the next several years. Unforeseen events, including a negative outcome in the tax audit being conducted in Germany, could negatively affect our ability to fund planned operations in the future.
Update on Intellectual Property Proceedings
On January 29, 2018, the Opposition Division of the European Patent Office ("EPO") concluded the oral proceedings concerning our ‘355 Patent. The Opposition Division revoked the ‘355 Patent after considering third-party oppositions from several opponents. We subsequently appealed the Opposition Division's decision to the Technical Board of Appeal ("TBA") of the EPO and after several postponements resulting from the coronavirus pandemic, the TBA heard our appeal on September 6, 2021. At the conclusion of the hearing on September 6, 2021, the TBA dismissed our appeal.
On January 27, 2022, we submitted a petition for review (the "Petition") to the Enlarged Board of Appeal (the "EBA") of the EPO, which requests that the EBA review the decision of the TBA in an effort to overturn the TBA's unfavorable ruling. We expect the EBA to decide whether to accept our Petition within about 6 to 12 months from the submission date. If the EBA accepts the Petition, the EBA will then need to rule on the matter. If the ruling of the EBA is favorable, the TBA will have to decide again on our appeal. The TBA may either confirm its previous decision or change its decision, after which the TBA may remit the case to the Opposition Division to resolve the remaining elements of the original Opposition Proceeding. In the favorable scenario, the steps from EBA acceptance of the Petition to completion of a new opposition proceeding is expected to take up to four years and possibly longer. The likelihood of the Petition being successful is low. The denial of the Petition would end the Opposition Proceeding in favor of the opponents. For all practical purposes, such denial of the Petition would represent an unsuccessful outcome of the Opposition Proceeding, resulting in no royalties being due to the Company from Biogen based on Biogen's net sales outside the United States, as defined in the settlement and license agreement entered into with subsidiaries of Biogen Inc. and certain other parties thereto.
Annual Report on Form 20-F
Investors are encouraged to read Forward's Annual Report on Form 20-F that was filed today with the U.S. Securities and Exchange Commission. Forward's Annual Report includes important information about the Group that is not disclosed herein including, but not limited to, risk factors and our audited financial statements as of December 31, 2021 and 2020 and for each of the years then ended.
| Forward Pharma A/S | ||||
| Condensed Consolidated Statement of Profit or Loss | ||||
| (in thousands, except per share amounts) | ||||
| Year Ended | ||||
| December 31, | ||||
| 2021 | 2020 | |||
| Research and development | $(226) | $(327) | ||
| General and administrative | (3,648) | (3,059) | ||
| Operating loss | (3,874) | (3,386) | ||
| Foreign exchange gain (loss), net | 2,170 | (2,970) | ||
| Other finance expense, net | (188) | (93) | ||
| Net loss | $(1,892) | $(6,449) | ||
| Net loss per share, basic and diluted | $(0.02) | $(0.07) | ||
| Weighted average number of shares used to compute net loss per share basic and diluted | 97,768 | 95,997 | ||
| Forward Pharma A/S | |||||
| Condensed Consolidated Statement of Financial Position | |||||
| (in thousands) | |||||
| December 31, | December 31, | ||||
| 2021 | 2020 | ||||
| Assets: | |||||
| Cash and cash equivalents | $70,770 | $79,087 | |||
| Other assets | 635 | 627 | |||
| Total assets | $71,405 | $79,714 | |||
| Equity and Liabilities: | |||||
| Shareholders' equity | $70,797 | $78,644 | |||
| Liabilities | 608 | 1,070 | |||
| Total equity and liabilities | $71,405 | $79,714 | |||
About Forward Pharma:
Forward Pharma A/S is a Danish biopharmaceutical company that commenced development in 2005 of a proprietary formulation of DMF for the treatment of inflammatory and neurological indications. The Company granted to Biogen an irrevocable license to all of its IP through the License Agreement and received from Biogen a non-refundable cash fee of $1.25 billion in February 2017, with the return of EUR 917.7 million to shareholders through a capital reduction in September 2017. The Company has the opportunity to receive royalties from Biogen on Biogen's net sales of Tecfidera® or other DMF products for multiple sclerosis outside the U.S., dependent on, among other things, a favorable outcome in Europe with respect to the Opposition Proceeding, including any appeal thereto.
The principal executive offices are located at Østergade 24A, 1st floor, 1100 Copenhagen K, Denmark and our American Depositary Shares are publicly traded on the Nasdaq Capital Market (FWP). For more information about the Company, please visit our website at http://www.forward-pharma.com.
Forward Pharma A/S Investor Relations Contact:
Forward Pharma A/S
Claus Bo Svendsen, MD, PhD
Chief Executive Officer
Investor Relations
[email protected]
Solebury Trout
Mike Biega
[email protected]
Forward Pharma A/S
Forward Looking Statements:
Certain statements in this press release may constitute "forward-looking statements" of Forward Pharma A/S within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements which contain language such as "believe," "expect," "anticipate," "estimate," "would," "may," "plan," and "potential." Forward-looking statements are predictions only, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, risks related to the following: our ability to obtain, maintain, enforce and defend issued patents with royalty-bearing claims; our ability to prevail in or obtain a favorable decision in the ‘355 patent European Opposition Proceeding, after all appeals, including the outcome of the Petition; the expected timing for key activities and an ultimate ruling in such legal proceedings; our ability to defend our tax filing positions; the outcome of the German tax audit, the solvency of our subsidiaries and the sufficiency of the Company's cash resources. Certain of these and other risk factors are identified and described in detail in certain of our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 20-F for the year ended December 31, 2021. We are providing this information as of the date of this release and do not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.
