Paratek Pharmaceuticals Announces Second Quarter 2023 Revenue of $40.0 Million
-- NUZYRA® (omadacycline) Net U.S. Sales of $33.8 Million from the Core Commercial Business, a 35% Increase Over Second Quarter 2022
--Previously Announced Agreement to be Acquired by Gurnet Point Capital and Novo Holdings A/S; Transaction Expected to Close in the Third Quarter
BOSTON, Aug. 03, 2023 (GLOBE NEWSWIRE) -- Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK), ("Paratek" or "the Company"), a commercial-stage biopharmaceutical company focused on the development and commercialization of novel life-saving therapies for life-threatening diseases and other public health threats for civilian, government and military use, today reported financial results and provided an update on corporate activities for the second quarter ended June 30, 2023.
Recent Highlights
- BARDA Contract Modification: The Company executed a modification to its Project BioShield contract with the Biomedical Advanced Research and Development Authority ("BARDA"), part of the Administration for Strategic Preparedness and Response ("ASPR") within the U.S. Department of Health and Human Services, in July 2023.
- BARDA and Paratek have agreed the next procurement of NUZYRA anthrax treatment courses will be split into two equal procurements based on the achievement of specific development milestones toward both treatment and post-exposure prophylaxis ("PEP") indications of pulmonary anthrax.
- The first of these procurements will be triggered by the delivery of positive top-line data from a dose-ranging efficacy study for PEP of inhalation anthrax in non-human primates ("NHPs"). The company expects this data to be available in the first quarter of 2024.
- The second of these procurements will be triggered by BARDA's receipt of positive top-line data from a combination of two studies, a dose-ranging efficacy study in NHPs and a pivotal efficacy study in rabbits for the treatment of inhalation anthrax, which the company anticipates could be available as early as the fourth quarter of 2024.
- The first of these procurements will be triggered by the delivery of positive top-line data from a dose-ranging efficacy study for PEP of inhalation anthrax in non-human primates ("NHPs"). The company expects this data to be available in the first quarter of 2024.
- BARDA and Paratek have agreed the next procurement of NUZYRA anthrax treatment courses will be split into two equal procurements based on the achievement of specific development milestones toward both treatment and post-exposure prophylaxis ("PEP") indications of pulmonary anthrax.
- Non-Tuberculous Mycobacteria ("NTM") Rare Disease Program: The Company announced that the European Medicines Agency ("EMA") Committee for Orphan Medicinal Products ("COMP") recommended a positive opinion for orphan medicinal product designation for NUZYRA for the treatment of NTM lung disease in June 2023. The European Commission officially designated NUZYRA as an orphan medicinal product in July 2023.
Second Quarter 2023 Financial Results
Total revenue for the second quarter of 2023 was $40.0 million compared to $29.6 million for the same period in the prior year. Total revenue for the second quarter of 2023 was comprised of the following:
- NUZYRA net U.S. sales of $33.8 million, which represented a 35% increase from $25.1 million for the same period in the prior year.
- Government contract service and grant revenue earned from cost reimbursement under the BARDA contract of $5.6 million, a 40% increase from $4.0 million for the same period in the prior year.
- Collaboration and royalty revenue of $0.6 million, consistent with $0.6 million for the same period in the prior year, both of which primarily represent royalty revenues earned on sales of NUZYRA in China and on sales of SEYSARA® (sarecycline) in the United States.
Research and development ("R&D") expenses were $8.8 million for the second quarter of 2023, compared to $7.6 million for the same period in the prior year.
Selling, general and administrative ("SG&A") expenses were $36.3 million for the second quarter of 2023, compared to $30.3 million for the same period in the year. The increase in SG&A expenses is primarily the result of costs incurred in connection with the potential acquisition of Paratek by Gurnet Point and Novo Holdings.
Paratek reported a net loss of $14.6 million, or $(0.25) per share, for the second quarter of 2023, compared to a net loss of $17.7 million, or $(0.33) per share, for the same period in the prior year.
Paratek had cash and cash equivalents of $42.7 million as of June 30, 2023. Based upon the Company's current operating plan, if it is unable to consummate the merger with Gurnet Point and Novo Holdings, as described below, there is substantial doubt about the Company's ability to operate as a going concern.
Proposed Gurnet Point Capital and Novo Holdings A/S Transaction
On June 6, 2023, Paratek announced it entered into a definitive agreement to be acquired by Gurnet Point Capital ("Gurnet Point") and Novo Holdings A/S ("Novo Holdings") in a transaction valued at approximately $462 million, including the assumption of debt and assuming full payment of a Contingent Value Right ("CVR"). Debt financing of $175 million for this transaction will be provided by funds managed by Oaktree Capital Management, L.P.
Under the terms of the merger agreement, Gurnet Point, a leading healthcare investment firm, and Novo Holdings, a holding and investment company responsible for managing the assets and wealth of the Novo Nordisk Foundation, will acquire all outstanding shares of Paratek for $2.15 per share in cash at close, plus a CVR of $0.85 per share payable upon the achievement of $320 million in U.S. NUZYRA net sales (excluding certain permitted deductions, payments under Paratek's contract with ASPR-BARDA, certain government payments and certain royalty revenue) in any calendar year ending on or prior to December 31, 2026.
The transaction, which the Paratek Board of Directors has unanimously approved, is expected to close in the third quarter of 2023, subject to customary closing conditions, including approval by Paratek shareholders and receipt of regulatory approvals. Following completion, Paratek will become a private company and will no longer be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, nor be traded on Nasdaq Global Market.
Due to the pending transaction, Paratek will not host a conference call to discuss its quarterly financial results or comment on its financial guidance for the year ending December 31, 2023.
About Paratek Pharmaceuticals, Inc.
Paratek Pharmaceuticals, Inc. is a commercial-stage biopharmaceutical company focused on the development and commercialization of novel life-saving therapies for life-threatening diseases or other public health threats for civilian, government and military use.
The company's lead commercial product, NUZYRA® (omadacycline), is a once-daily oral and intravenous antibiotic available in the United States for the treatment of adults with community-acquired bacterial pneumonia (CABP) and acute bacterial skin and skin structure infections (ABSSSI). Paratek has a collaboration agreement with Zai Lab for the development and commercialization of omadacycline in the greater China region and retains all remaining global rights.
Paratek is also conducting a Phase 2b study with NUZYRA in a rare disease, nontuberculous mycobacterial (NTM) pulmonary disease, caused by Mycobacterium abscessus complex. Paratek estimates this opportunity represents a potential $1 billion addressable market in the United States.
Paratek exclusively licensed U.S. rights and rights to the greater China territory for SEYSARA® (sarecycline), a once-daily oral therapy for the treatment of moderate to severe acne vulgaris, to Almirall, LLC. Paratek retains the development and commercialization rights for sarecycline in the rest of the world.
In 2019, Paratek was awarded a contract from the U.S. Department of Health and Human Services' Biomedical Advanced Research and Development Authority (BARDA), now valued at up to $304 million, to support the development and U.S.-based manufacturing of NUZYRA for pulmonary anthrax.
For more information, visit www.ParatekPharma.com or follow us on LinkedIn and Twitter.
About NUZYRA®
NUZYRA® (omadacycline) is a novel antibiotic with both once-daily oral and intravenous (IV) formulations for the treatment of community-acquired bacterial pneumonia (CABP) and acute bacterial skin and skin structure infections (ABSSSI). A modernized tetracycline, NUZYRA is specifically designed to overcome tetracycline resistance and exhibits activity across a spectrum of bacteria, including Gram-positive, Gram-negative, atypicals and other drug-resistant strains.
Forward Looking Statements
This press release contains forward-looking statements including statements related to the expected timing of closing of our sale to Gurnet Point and Novo Holdings, our overall strategy, products, prospects, potential and expected results, including statements about our expectations regarding the Company's future growth and performance, revenue and operating expense projections, our ability to continue to execute and deliver on our BARDA contract, the status of our NTM development program, and our ability to operate as a going concern.
All statements, other than statements of historical facts, included in this press release are forward-looking statements, and are identified by words such as "expect," "anticipate," "continue," "will" and other words and terms of similar meaning. These forward-looking statements are based upon our current expectations and involve substantial risks and uncertainties. We may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in our forward-looking statements and you should not place undue reliance on these forward-looking statements. Our actual results and the timing of events could differ materially from those included in such forward-looking statements as a result of these risks and uncertainties. These and other risk factors are discussed under "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022 and our other filings with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein.
PARATEK PHARMACEUTICALS, INC.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
| As of June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Cash, cash equivalents and marketable securities | $ | 42,685 | $ | 34,248 | ||||
| Total assets | 145,792 | 172,538 | ||||||
| Working capital | (97,392 | ) | 99,454 | |||||
| Total current liabilities | 202,619 | 37,388 | ||||||
| Long-term debt | 94,285 | 256,946 | ||||||
| Common stock and additional paid-in capital | 763,780 | 759,407 | ||||||
| Accumulated deficit | (965,145 | ) | (930,449 | ) | ||||
| Total stockholders' deficit | (201,365 | ) | (171,042 | ) |
| Condensed Consolidated Statement of Operations (unaudited) (in thousands, except loss per share data) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Product revenue, net | $ | 33,800 | $ | 25,082 | $ | 60,013 | $ | 45,000 | ||||
| Government contract service revenue | 3,620 | 1,896 | 5,301 | 4,068 | ||||||||
| Government contract grant revenue | 1,931 | 2,082 | 4,084 | 4,182 | ||||||||
| Collaboration and royalty revenue | 642 | 577 | 1,831 | 1,248 | ||||||||
| Net revenue | $ | 39,993 | $ | 29,637 | $ | 71,229 | $ | 54,498 | ||||
| Expenses: | ||||||||||||
| Cost of product revenue | 4,368 | 4,878 | 10,612 | 8,372 | ||||||||
| Research and development | 8,772 | 7,592 | 16,080 | 15,069 | ||||||||
| Selling, general and administrative | 36,264 | 30,335 | 69,753 | 57,937 | ||||||||
| Total operating expenses | 49,404 | 42,805 | 96,445 | 81,378 | ||||||||
| Loss from operations | (9,411 | ) | (13,168 | ) | (25,216 | ) | (26,880 | ) | ||||
| Other income and expenses: | ||||||||||||
| Interest income | 252 | 133 | 473 | 240 | ||||||||
| Interest expense | (5,287 | ) | (4,546 | ) | (9,763 | ) | (9,025 | ) | ||||
| Other (losses) gains, net | (56 | ) | (38 | ) | (78 | ) | 138 | |||||
| Net loss before provision for income taxes | $ | (14,502 | ) | $ | (17,619 | ) | $ | (34,584 | ) | $ | (35,527 | ) |
| Provision for income taxes | (51 | ) | — | (111 | ) | — | ||||||
| Net loss | (14,553 | ) | (17,619 | ) | (34,695 | ) | (35,527 | ) | ||||
| Other comprehensive (loss) | ||||||||||||
| Unrealized (loss) on available-for-sale securities, net of tax | — | (53 | ) | — | (224 | ) | ||||||
| Comprehensive loss | $ | (14,553 | ) | $ | (17,672 | ) | $ | (34,695 | ) | $ | (35,751 | ) |
| Basic and diluted net loss per common share | $ | (0.25 | ) | $ | (0.33 | ) | $ | (0.61 | ) | $ | (0.67 | ) |
| Weighted average common stock outstanding | ||||||||||||
| Basic | 57,282,239 | 53,023,350 | 57,093,876 | 53,310,091 | ||||||||
| Diluted | 57,282,239 | 53,023,350 | 57,093,876 | 53,310,091 | ||||||||
CONTACT:
Investor Relations:
PJ Kelleher
LifeSci Advisors
[email protected]
Phone: 617-430-7579
Media:
Christine Fanelle
Scient PR
[email protected]
Phone: 215-595-5211
