Eagle Pharmaceuticals Reports First Quarter 2021 Results

Q1 2021 net loss was $0.03 per basic and diluted share and adjusted non-GAAP net income was $0.24 per basic and diluted share

Anticipate vasopressin approval and launch this year; completed last required study; expect to respond to vasopressin Complete Response Letter (“CRL”) in full by mid-year

Expects approximately $20-$25 million from combined royalty and milestone revenue in 2022 for TREAKISYM (bendamustine) Ready-to-Dilute (“RTD”) and Rapid Infusion (“RI”) formulations

Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) (“Eagle” or the “Company”) today announced financial results for the three months ended March 31, 2021.

Business and Recent Highlights:

• Completed the last study required by FDA for the Company’s vasopressin product and expect to have the results shortly. Eagle plans to respond to the CRL issued for its first-to-file Abbreviated New Drug Applicable (“ANDA”) for vasopressin in full by mid-year. The Company’s patent trial against Endo Par Innovation Company, LLC was postponed and is now scheduled to begin on July 7, 2021. The Company believes it will have first-to-file 180 day exclusivity for vasopressin;
• Approval of TREAKISYM (bendamustine) RTD formulation, in combination with rituximab for treatment of relapsed or refractory diffuse large B-cell lymphoma (“r/r DLBCL”) received from the Pharmaceuticals and Medical Devices Agency (“PMDA”) in Japan. This represents a meaningful extension of Eagle’s bendamustine franchise and is expected to significantly increase the market opportunity;
• Filing of TREAKISYM RI (50ml) liquid formulation with the PMDA in Japan. Eagle expects approximately $20-$25 million from combined royalty and milestone revenue in 2022 for TREAKISYM (bendamustine) RTD and RI formulations;
• Appointed former FDA Official and Public Health Expert Dr. Luciana Borio to its Board of Directors; and
• In active discussions for several promising in-licensing and acquisition candidates that the Company believes will strengthen its portfolio and pipeline going forward.

Financial Highlights

First Quarter 2021

Total revenue for Q1 2021 was $41.2 million, compared to $46.0 million in Q1 2020, primarily reflecting decreased product sales of RYANODEX^® and royalty revenue of BENDEKA^®.

• Q1 2021 net loss was $0.4 million, or $0.03 per basic and diluted share, compared to net loss of $2.9 million, or $0.21 per basic and diluted share in Q1 2020.
• Q1 2021 adjusted non-GAAP net income was $3.2 million, or $0.24 per basic and diluted share, compared to adjusted non-GAAP net income of $11.7 million, or $0.86 per basic and $0.84 per diluted share, in Q1 2020.
• Cash and cash equivalents were $105.2 million, net accounts receivable was $44.9 million, and debt was $32.0 million as of March 31, 2021.

“Vasopressin is tracking as expected. The trial is now less than two months away and we have now completed the last study required to submit our response to the CRL to the FDA. Our expectation remains that we will receive final approval in time to bring the product to market this year. We believe we also have an outstanding and large opportunity with TREAKISYM in Japan representing another extension of our bendamustine franchise. Equally important and exciting is the PEMFEXY^™ launch early next year, which gives us four months of initial exclusivity,” stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.

“We are now in late-stage diligence for several in-licensing opportunities that would leverage our capabilities, meet our criteria and broaden our portfolio and pipeline. We will aim to finalize a few such transactions that have the potential to bolster our earnings both in the short and longer term,” concluded Tarriff.

First Quarter 2021 Financial Results

Total revenue for the three months ended March 31, 2021 was $41.2 million, as compared to $46.0 million for the three months ended March 31, 2020.

Q1 2021 BELRAPZO^® product sales were $5.7 million, compared to $4.6 million in Q1 2020.

Q1 2021 RYANODEX product sales were $6.8 million, compared to $11.4 million in Q1 2020.

Royalty revenue was $24.1 million in the first quarter of 2021, compared to $28.3 million in the first quarter of 2020. BENDEKA royalties were $23.8 million in the first quarter of 2021, compared to $28.0 million in the first quarter of 2020. A summary of total revenue is outlined below:

Gross Margin was 74% during the first quarter of 2021, as compared to 83% in the first quarter of 2020. The compression in gross margin for the first quarter of 2021 was driven by revenue mix including the launch of TREAKISYM product sales to our partner in the first quarter of 2021, on which we earn no profit.

R&D expense was $14.3 million for the first quarter of 2021, compared to $9.4 million in the first quarter of 2020. The increase is largely attributable to $2.6 million in development costs for vasopressin, a $0.9 million increase in the cost for fulvestrant, and a $0.9 million increase in development costs for RYANODEX related projects. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense during the first quarter of 2021 was $13.1 million.

SG&A expenses in the first quarter of 2021 totaled $19.9 million compared to $24.8 million in the first quarter of 2020. The decrease is primarily related to the non-recurrence of a $2.5 million charge for the Tyme transaction, and lower marketing, travel, entertainment, and trade show expenses as a result of reduced travel due to the COVID-19 pandemic. Excluding stock-based compensation and other non-cash and non-recurring items, first quarter 2021 SG&A expense was $13.4 million.

Net loss for the first quarter of 2021 was $0.4 million, or $0.03 per basic and diluted share, compared to net loss of $2.9 million, or $0.21 per basic and diluted share, in the first quarter of 2020, due to the factors discussed above.

Adjusted non-GAAP net income for the first quarter of 2021 was $3.2 million, or $0.24 per basic and diluted share, compared to adjusted non-GAAP net income of $11.7 million or $0.86 per basic and $0.84 per diluted share in the first quarter of 2020. For a full reconciliation of adjusted non-GAAP net income to the most comparable GAAP financial measures, please see the tables at the end of this press release.

2021 Expense Guidance

• R&D spend in 2021, on a non-GAAP basis, is expected to be $26-$30 million, as compared to $27.8 million in 2020.

• SG&A spend in 2021, on a non-GAAP basis, is expected to be $52-$56 million, as compared to $50.9 million in 2020. This represents a reduction from earlier guidance for 2021 SG&A spend of $56-60 million.

The guidance provided in this section represents forward-looking information, and actual results may vary. Please see the risks and assumptions referred to in the Forward-Looking Statements section of this press release.

Liquidity

As of March 31, 2021, the Company had $105.2 million in cash and cash equivalents plus $44.9 million in net accounts receivable. The Company had $32.0 million in outstanding debt. Therefore, as of March 31, 2021, the Company had net cash plus receivables of $118.1 million.

In the first quarter of 2021, the Company purchased $1.4 million of its common stock as part of its $160.0 million Share Repurchase Program. From August 2016 through March 31, 2021, the Company has repurchased $208.3 million of its common stock.

Conference Call

As previously announced, Eagle management will host its first quarter 2021 conference call as follows:

A replay of the conference call will be available for one week after the call's completion by dialing 800-839-6980 (US) or 402-220-6062 (International) and entering conference call ID EGRXQ121. The webcast will be archived for 30 days at the aforementioned URL.

About Eagle Pharmaceuticals, Inc.

Eagle is a fully integrated pharmaceutical company with research and development, clinical, manufacturing and commercial expertise. Eagle is committed to developing innovative medicines that result in meaningful improvements in patients’ lives. Eagle’s commercialized products include RYANODEX^®, BENDEKA^®, BELRAPZO^®, and its oncology and CNS/metabolic critical care pipeline includes product candidates with the potential to address underserved therapeutic areas across multiple disease states. Additional information is available on Eagle’s website at www.eagleus.com.

Forward-Looking Statements

This press release contains forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and other securities laws. Forward-looking statements are statements that are not historical facts. Words and phrases such as “anticipated,” “forward,” “will,” “would,” “may,” “remain,” “potential,” “prepare,” “expected,” “believe,” “plan,” “near future,” “belief,” “guidance,” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding future events such as: the number and timing of potential product launches, development initiatives or new indications for the Company’s product candidates; the period of market exclusivity for any of the Company’s product candidates; the Company's clinical development plan for the product candidates in its portfolio; the potential benefits and efficacy of RYANODEX, including the potential for RYANODEX as a treatment for additional indications; the ability of the Company’s executive team to execute on the Company’s strategy and build stockholder value; the timing, scope or likelihood and timing of regulatory filings and approvals from the FDA for the Company’s product candidates; the timing of the Company's PEMFEXY launch, if ever; the success of the Company's collaborations with its strategic partners and the timing and results of these partners’ preclinical studies and clinical trials, including the Company’s collaboration with its Japanese licensing partner, SymBio, with respect to the commercialization of SymBio’s product TREAKISYM; the future commercial success of TREAKISYM RTD and, if approved, TREAKISYM RI, including anticipated royalty and milestone revenue and potential market opportunity; the Company’s timing and ability to enroll patients in ongoing and upcoming clinical trials; the ability of the Company to obtain and maintain coverage and adequate reimbursement for its products; the implementation of certain healthcare reform measures; the Company's timing and ability to repurchase additional shares of the Company's common stock, if any, under its Share Repurchase Program; the Company's ability to deliver value in 2021 and over the long term; the Company’s ability to utilize its cash and other assets to increase shareholder value; the Company’s ability to effectively manage and control expenses in line with its budget; and the Company's plans and ability to advance the products in its pipeline. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the Company's control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Such risks and uncertainties include, but are not limited to: the impacts of the COVID-19 pandemic, including disruption or impact in the sales of the Company's marketed products, interruptions or other adverse effects to clinical trials, delays in regulatory review, manufacturing and supply chain interruptions, adverse effects on healthcare systems, disruption in the operations of the Company's third party partners and disruption of the global economy, and the overall impact of the COVID-19 pandemic on the Company's business, financial condition and results of operations; risks that the Company's business, financial condition and results of operations will be impacted by the spread of COVID-19 in the geographies where the Company's third-party partners operate; whether the Company will incur unforeseen expenses or liabilities or other market factors; whether the Company will successfully implement its development plan for its product candidates; delay in or failure to obtain regulatory approval of the Company's product candidates; whether the Company can successfully market and commercialize its product candidates; the success of the Company's relationships with its partners; the availability and pricing of third party sourced products and materials; the outcome of litigation involving any of our products or that may have an impact on any of our products; successful compliance with the FDA and other governmental regulations applicable to product approvals, manufacturing facilities, products and/or businesses; general economic conditions, including the potential adverse effects of public health issues, including the COVID-19 pandemic, on economic activity and the performance of the financial markets generally; the strength and enforceability of the Company's intellectual property rights or the rights of third parties; competition from other pharmaceutical and biotechnology companies and the potential for competition from generic entrants into the market; the risks inherent in the early stages of drug development and in conducting clinical trials; and those risks and uncertainties identified in the “Risk Factors” sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2021, as updated by the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, which the Company expects to file with the SEC on May 10, 2021, and its other subsequent filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and the Company does not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events.

Non-GAAP Financial Performance Measures

In addition to financial information prepared in accordance with U.S. GAAP, this press release also contains adjusted non-GAAP net income and adjusted non-GAAP earnings per share attributable to Eagle. The Company believes these measures provide investors and management with supplemental information relating to operating performance and trends that facilitate comparisons between periods and with respect to projected information.

Adjusted non-GAAP net income excludes stock-based compensation expense, depreciation expense, amortization expense, severance, non-cash interest expense, expense related to collaboration with Tyme, fair value adjustments on equity investment, and the tax effect of these adjustments. The Company believes these non-GAAP financial measures help indicate underlying trends in the Company’s business and are important in comparing current results with prior period results and understanding projected operating performance. Non-GAAP financial measures provide the Company and its investors with an indication of the Company’s baseline performance before items that are considered by the Company not to be reflective of the Company’s ongoing results. See the attached Reconciliation of GAAP to Adjusted Non-GAAP Net Income and Adjusted Non-GAAP Earnings per Share and Reconciliation of GAAP to Adjusted Non-GAAP EBITDA for details of the amounts excluded and included to arrive at adjusted non-GAAP net income, adjusted non-GAAP earnings per share amounts, and adjusted non-GAAP EBITDA amounts, respectively.

These adjusted measures are non-GAAP and should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP. The Company strongly encourages investors to review its consolidated financial statements and publicly-filed reports in their entirety and cautions investors that the non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

-- Financial tables follow --

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