TIDMAMYT
Amryt Reports Strong Q3 2021 Results
14.6% YoY revenue growth in Q3 to $56.5M
21.5% growth in metreleptin revenues YoY to $36.3M in Q3; 51.6%
growth YoY excluding the impact of sporadic LATAM orders
7(th) consecutive quarter of positive EBITDA generation
excluding Chiasma transaction costs
Cash of $123.2M at September 30, 2021
Reaffirming FY 2021 revenue guidance to $220M - $225M,
representing 20-23% YoY growth
Conference call and webcast today at 0830 EDT / 1230 GMT
DUBLIN, Ireland, and Boston MA, November 3, 2021, Amryt (Nasdaq:
AMYT, AIM: AMYT), a global, commercial-stage biopharmaceutical
company dedicated to acquiring, developing and commercializing
novel treatments for rare diseases, today provides a business
update and announces unaudited financial results for the third
quarter ended September 30, 2021.
Joe Wiley, CEO of Amryt Pharma, commented: "Q3 was an extremely
busy and productive period for Amryt and I am excited to report
today's strong operational and financial results. Our Q3 revenues
of $56.5M represent 14.6% YoY revenue growth. Metreleptin continues
to grow strongly and delivered 21.5% YoY growth in the quarter and
grew 51.6% during the period excluding the impact of sporadic LATAM
ordering. These results clearly demonstrate the strong performance
of metreleptin in all regions. Overall, the results also
demonstrate the strong growth we are experiencing across our
business and represent our seventh consecutive quarter of positive
EBITDA generation and this performance has been delivered despite
the challenging COVID pandemic.
We have also continued to progress the regulatory pathway and
filed marketing applications for Oleogel-S10 in both the US and
Europe and a target PDUFA date for Oleogel-S10 has been set for
November 30, 2021. Oleogel-S10 is eligible for a Priority Review
Voucher if approved under priority review by the FDA. If
Oleogel-S10 is approved, we will have four commercial products and
the team, financial flexibility, systems and global infrastructure
in place to bring Oleogel-S10 to market and to execute our
significant growth plans.
We completed the acquisition of Chiasma on August 5, 2021 and
since then we have made significant progress integrating the
Chiasma operations and portfolio into Amryt and we are very excited
about both the growth opportunities for Mycapssa(R) and the
potential to develop the underlying TPE platform in other
areas.
Given the strong performance of our business year to date, we
are reaffirming our full year 2021 revenue guidance of $220-$225
million, issued on September 13, 2021 which represents growth of
20%-23% over 2020."
Q3 2021 and Recent Business Highlights:
-- Chiasma, Inc. acquisition completed on August 5, 2021 and integration
proceeding well
-- Oleogel-S101 target PDUFA date set by the FDA for November 30, 2021
-- Oleogel-S10 MAA accepted by EMA and CHMP opinion expected in Q4 2021
-- Commercial launch plans well advanced for Oleogel-S10 launch, if
approved
-- FY 2021 revenue guidance increased in September to $220M - $225M,
representing 20-23% growth over 2020
Q3 2021 Commercial Product Performance:
Q3 2021 (unaudited)
-------------- ----------------------------------
US EMEA Other Total
-------------- ------- ------- ------- -------
US$'000 US$'000 US$'000 US$'000
-------------- ------- ------- ------- -------
Metreleptin 18,748 15,618 1,927 36,293
-------------- ------- ------- ------- -------
Lomitapide 8,568 6,406 3,564 18,538
-------------- ------- ------- ------- -------
Mycapssa(R) 1,453 - - 1,453
-------------- ------- ------- ------- -------
Other - 166 69 235
-------------- ------- ------- ------- -------
Total revenue 28,769 22,190 5,560 56,519
-------------- ------- ------- ------- -------
Q3 2020 (unaudited)
-------------- ----------------------------------
US EMEA Other Total
-------------- ------- ------- ------- -------
US$'000 US$'000 US$'000 US$'000
-------------- ------- ------- ------- -------
Metreleptin 15,877 6,423 7,578 29,878
-------------- ------- ------- ------- -------
Lomitapide 9,233 7,109 2,771 19,113
-------------- ------- ------- ------- -------
Mycapssa(R) - - - -
-------------- ------- ------- ------- -------
Other - 201 134 335
-------------- ------- ------- ------- -------
Total revenue 25,110 13,733 10,483 49,326
-------------- ------- ------- ------- -------
-- 14.6% YoY revenue growth in Q3 2021 to $56.5M (Q3 2020: $49.3M)
-- Excluding the impact of sporadic LATAM ordering and Mycapssa(R),
revenues grew 26.3% YoY and 5.7% QoQ
-- 21.5% increase in metreleptin revenues YoY to $36.3M in Q3 2021 (Q3
2020: $29.9M). Excluding the impact of sporadic LATAM ordering,
metreleptin revenue growth was 51.6% YoY.
-- US accounted for 51.7% of global metreleptin revenues and EMEA accounted
for 43.0% in Q3 2021
-- EMEA metreleptin revenues grew 143.2% YoY in Q3
-- US accounted for 46.2% of global lomitapide revenues and EMEA accounted
for 34.6% in Q3 2021
-- Mycapssa(R) delivered $1.45M in Q3 (from August 5 when Chiasma was
acquired)
-- Mycapssa(R) revenues in Q3 were impacted by pre-ordering in Q2;
normalised ordering patterns have returned in September with Mycapssa(R)
delivering $1.14M in the month
-- The integration of Chiasma is significantly advanced and we continue to
extract cost synergies
Q3 2021 Financial Highlights:
-- $21.4M operating loss before finance expense for Q3 2021 (Q3 2020: $3.6M
operating loss). Excluding non-cash items, share based compensation
expenses and Chiasma restructuring and acquisition costs, this resulted
in EBITDA3 before restructuring and acquisition costs of $6.2M.
-- Cash of $123.2M at September 30, 2021 (June 30, 2021: $142.9M) post
repayment of outstanding Chiasma revenue interest financing debt and
transaction related costs in the period
IFRS and non-GAAP adjusted Q3 2021 results:
Q3 2021
Q3 2020 Q3 2021 Non-cash Q3 2021 Non-GAAP
US$M (unaudited) (unaudited) adjustments(2) Adjusted
----------------------------------- ------------ ------------ --------------- ----------------
Revenue 49.3 56.5 - 56.5
----------------------------------- ------------ ------------ --------------- ----------------
Gross profit 22.3 29.3 13.1 42.4
----------------------------------- ------------ ------------ --------------- ----------------
R&D expenses (7.4) (11.0) - (11.0)
----------------------------------- ------------ ------------ --------------- ----------------
SG&A expenses (16.9) (25.7) 0.5 (25.2)
----------------------------------- ------------ ------------ --------------- ----------------
Restructuring and acquisitioncosts (0.1) (11.3) - (11.3)
----------------------------------- ------------ ------------ --------------- ----------------
Share based compensation
expenses (1.5) (2.7) 2.7 -
----------------------------------- ------------ ------------ --------------- ----------------
Operating (loss) / profit
before finance expense (3.6) (21.4) 16.3 (5.1)(3)
----------------------------------- ------------ ------------ --------------- ----------------
Operating (loss) / profit
before finance expense
and restructuring and acquisition
costs (3.5) (10.1) 16.3 6.2
----------------------------------- ------------ ------------ --------------- ----------------
(1) For the purposes of this announcement, we use the name
Oleogel-S10. Filsuvez(R) has been selected as the brand name for
the product but please note, Amryt does not, as yet, have
regulatory approval for Filsuvez(R) to treat EB.
(2) Non-cash items include amortisation of the acquired
metreleptin, lomitapide and Mycapssa(R) intangible assets ($12.7M),
amortisation of the inventory fair value step-up related to the
acquisition of Chiasma, Inc. ($0.4M), depreciation and amortisation
($0.5M) and share based compensation expenses ($2.7M).
(3) EBITDA is earnings before interest, tax, depreciation,
amortisation and share based compensation expenses. To supplement
Amryt's financial results presented in accordance with IFRS
generally accepted accounting principles, the Company uses EBITDA
as a key measure of company performance as the Company believes
that this measure is most reflective of the operational
profitability or loss of the Company and provides management and
investors with useful supplementary information which can enhance
their ability to evaluate the operating performance of the
business. EBITDA, as measured by the Company, is not meant to be
considered in isolation or as a substitute to operating profit /
loss attributable to Amryt and should be read in conjunction with
the Company's condensed consolidated financial statements prepared
in accordance with IFRS.
Guidance & Outlook:
Given the continued strong performance of the Company's
commercial products, the board is today reaffirming revenue
guidance for FY 2021 in the range of $220M - $225M which represents
growth of 20% to 23% on FY 2020.
Conference Call & Webcast:
Amryt will host a conference call and webcast for analysts and
investors today at 0830 EDT/1230 GMT.
Webcast Player URL:
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https://edge.media-server.com/mmc/p/yn6ztxz9
Telephone Dial in details:
United States +1 646 787 1226
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United Kingdom +44 (0) 203 009 5709
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Ireland +353 (1) 506 0626
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Confirmation Code 9357809
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A playback facility will be available from November 3, 2021 at
1430 EDT / 1830 GMT -- November 10, 2021 at 1330 EST / 1830 GMT.
Access details for the playback facility are as follows:
Confirmation Code: 9357809 | US: + 1 917 677 7532 | UK: +44 (0) 333
300 9785 | Ireland : +353 (1) 553 8777.
About Amryt
Amryt is a global commercial-stage biopharmaceutical company
focused on acquiring, developing and commercializing innovative
treatments to help improve the lives of patients with rare and
orphan diseases. Amryt comprises a strong and growing portfolio of
commercial and development assets.
Amryt's commercial business comprises three orphan disease
products -- metreleptin (Myalept(R)/ Myalepta(R)); oral octreotide
(Mycapssa(R)); and lomitapide (Juxtapid(R)/ Lojuxta(R)).
Myalept(R)/Myalepta(R) (metreleptin) is approved in the US
(under the trade name Myalept(R)) as an adjunct to diet as
replacement therapy to treat the complications of leptin deficiency
in patients with congenital or acquired generalized lipodystrophy
(GL) and in the EU (under the trade name Myalepta(R)) as an adjunct
to diet for the treatment of leptin deficiency in patients with
congenital or acquired GL in adults and children two years of age
and above and familial or acquired partial lipodystrophy (PL) in
adults and children 12 years of age and above for whom standard
treatments have failed to achieve adequate metabolic control. For
additional information, please follow this
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link.
Mycapssa(R) (oral octreotide) is approved in the US for
long-term maintenance therapy in acromegaly patients who have
responded to and tolerated treatment with octreotide or lanreotide.
Mycapssa(R) is the first and only oral somatostatin analogapproved
by the FDA. Mycapssa(R) has also been submitted to the EMA for
regulatory approval. For additional information, please follow this
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link.
Juxtapid(R)/Lojuxta(R) (lomitapide) is approved as an adjunct to
a low-fat diet and other lipid-lowering medicinal products for
adults with the rare cholesterol disorder, Homozygous Familial
Hypercholesterolaemia ("HoFH") in the US, Canada, Colombia,
Argentina and Japan (under the trade name Juxtapid(R)) and in the
EU, Israel and Brazil (under the trade name Lojuxta(R)). For
additional information, please follow this
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link.
Amryt's lead development candidate, Oleogel-S10 (Filsuvez(R)) is
a potential treatment for the cutaneous manifestations of
Junctional and Dystrophic Epidermolysis Bullosa ("EB"), a rare and
distressing genetic skin disorder affecting young children and
adults for which there is currently no approved treatment.
Filsuvez(R) has been selected as the brand name for Oleogel-S10.
The product does not currently have regulatory approval to treat EB
but has been submitted to the FDA for approval and in June 2021,
Amryt received confirmation from the FDA that its NDA for
Oleogel-S10 had been accepted and granted priority review. The FDA
also set a target PDUFA date of November 30, 2021. In Europe, a MAA
for Oleogel-S10 was accepted for assessment by the EMA in March
2021.
Amryt's pre-clinical gene therapy candidate, AP103, offers a
potential treatment for patients with Dystrophic EB, and the
polymer-based delivery platform has the potential to be developed
for the treatment of other genetic disorders.
Amryt also intends to develop oral medications that are
currently only available as injectable therapies through its
Transient Permeability Enhancer (TPE(R) ) technology platform. For
more information on Amryt, including products, please visit
https://www.globenewswire.com/Tracker?data=Rm6GdNiSSIB0mcUfxbNhGu_4_IlcJ12581sShzfDkMCUUnDXkITMqIB_fDAq3_ed0GEdjig_rdLMo3nFh_E3UztyNvYB_n2pkYY5O2c-eOM=
www.amrytpharma.com.
Financial Advisors
Shore Capital (Daniel Bush, Mark Percy, John More) are NOMAD and
Joint Broker to Amryt in the UK. Stifel (Ben Maddison) are Joint
Broker to the company in the UK.
Forward-Looking Statements
This announcement may contain forward-looking statements and the
words "expect", "anticipate", "intends", "plan", "estimate", "aim",
"forecast", "project" and similar expressions (or their negative)
identify certain of these forward-looking statements. The
forward-looking statements in this announcement are based on
numerous assumptions and Amryt's present and future business
strategies and the environment in which Amryt expects to operate in
the future. Forward-looking statements involve inherent known and
unknown risks, uncertainties and contingencies because they relate
to events and depend on circumstances that may or may not occur in
the future and may cause the actual results, performance or
achievements to be materially different from those expressed or
implied by such forward-looking statements. These statements are
not guarantees of future performance or the ability to identify and
consummate investments. Many of these risks and uncertainties
relate to factors that are beyond Amryt's ability to control or
estimate precisely, such as future market conditions, the course of
the COVID-19 pandemic, currency fluctuations, the behaviour of
other market participants, the outcome of clinical trials, the
actions of regulators and other factors such as Amryt's ability to
obtain financing, changes in the political, social and regulatory
framework in which Amryt operates or in economic, technological or
consumer trends or conditions. Past performance should not be taken
as an indication or guarantee of future results, and no
representation or warranty, express or implied, is made regarding
future performance. No person is under any obligation to update or
keep current the information contained in this announcement or to
provide the recipient of it with access to any additional relevant
information that may arise in connection with it. Such
forward-looking statements reflect the Company's current beliefs
and assumptions and are based on information currently available to
management.
Contacts
Joe Wiley, CEO / Rory Nealon, CFO/COO, +353 (1) 518 0200,
ir@amrytpharma.com
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Daniel Bush, Shore Capital, NOMAD +44 (0) 207 408 4090,
amrytcorporate@shorecap.co.uk
Tim McCarthy, LifeSci Advisors, LLC, +1 (212) 915 2564,
tim@lifesciadvisors.com
Amber Fennell, Consilium Strategic Communications, +44 (0) 203
709 5700, fennell@consilium-comms.com
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Amryt Pharma plc
Condensed Consolidated Statement of Comprehensive Loss
Three Months Ended Nine Months Ended
September 30, September 30,
---- -------------------------- --------------------------
2021 2020 2021 2020
Note (unaudited) (unaudited) (unaudited) (unaudited)
---- ------------ ------------
US$'000 US$'000 US$'000 US$'000
Revenue 3 56,519 49,326 167,713 140,085
Cost of sales (27,265) (27,057) (76,933) (89,148)
Gross profit 29,254 22,269 90,780 50,937
Research and development expenses (11,000) (7,350) (28,454) (22,481)
Selling, general and administrative
expenses (25,706) (16,889) (62,438) (56,883)
Restructuring and acquisition costs 5 (11,226) (105) (14,679) (1,005)
Share based payment expenses 4 (2,689) (1,533) (5,905) (3,136)
Operating loss before finance expense (21,367) (3,608) (20,696) (32,568)
============ ============ ============ ============
Non-cash change in fair value of
contingent consideration 5 (3,030) (2,126) (8,897) (8,150)
Non-cash contingent value rights
finance expense 5 (1,915) (1,557) (5,515) (4,498)
Net finance expense - other (6,424) (1,359) (20,163) (15,492)
Loss on ordinary activities before
taxation (32,736) (8,650) (55,271) (60,708)
Tax credit/(charge) on loss on ordinary
activities 15,527 (1,821) 14,726 3,171
Loss for the year attributable to
the equity holders of the Company (17,209) (10,471) (40,545) (57,537)
Exchange translation differences
which may be reclassified through
profit or loss 240 (1,921) 2,583 (2,850)
Total other comprehensive income/(loss) 240 (1,921) 2,583 (2,850)
Total comprehensive loss for the
year attributable to the equity holders
of the Company (16,696) (12,392) (37,962) (60,387)
Loss per share
Loss per share - basic and diluted,
attributable to ordinary equity holders
of the parent (US$) 6 (0.07) (0.07) (0.20) (0.37)
Amryt Pharma plc
Condensed Consolidated Statement of Financial Position
As at,
September December 31,
30, 2021 2020
Note (unaudited) (audited)
------------
US$'000 US$'000
Assets
Non-current assets
Goodwill 7 79,874 19,131
Intangible assets 7 488,733 305,369
Property, plant and equipment 8,402 7,574
Other non-current assets 1,646 1,542
Total non-current assets 578,655 333,616
Current assets
Trade and other receivables 8 52,793 43,185
Inventories 9 100,839 40,992
Cash and cash equivalents, including restricted
cash 10 123,177 118,798
Total current assets 276,809 202,975
Total assets 855,464 536,591
Equity and liabilities
Equity attributable to owners of the parent
Share capital 11 25,261 13,851
Share premium 11 310,778 51,408
Other reserves 11 246,080 236,488
Accumulated deficit (276,096) (235,605)
Total equity 306,023 66,142
Non-current liabilities
Contingent consideration and contingent
value rights 5 157,999 148,323
Deferred tax liability 37,001 6,612
Long term loan 12 91,820 87,302
Convertible notes 13 104,566 101,086
Provisions and other liabilities 14 4,213 25,951
Total non-current liabilities 395,599 369,274
Current liabilities
Trade and other payables 124,315 90,236
Provisions and other liabilities 14 29,527 10,939
Total current liabilities 153,842 101,175
Total liabilities 549,441 470,449
Total equity and liabilities 855,464 536,591
Amryt Pharma plc
Condensed Consolidated Statement of Cash Flows
Nine months ended
September 30,
2021 2020
Note (unaudited) (unaudited)
US$'000 US$'000
Cash flows from operating activities
Loss on ordinary activities after taxation (40,545) (57,537)
Net finance expense - other 20,163 15,492
Depreciation and amortization 35,238 33,313
Amortization of inventory fair value step-up 1,641 21,015
Share based payment expenses 4 5,905 3,136
Non-cash change in fair value of contingent
consideration 5 8,897 8,150
Non-cash contingent value rights finance
expense 5 5,515 4,498
Deferred taxation charge/(credit) (15,677) (2,452)
Movements in working capital and other
adjustments:
Change in trade and other receivables 8 (2,609) (6,695)
Change in trade and other payables (108,468) 21,875
Change in provision and other liabilities 14 (2,756) (12,328)
Change in inventories 39 (7,948)
Change in non-current assets 763 596
Net cash flow from operating activities (91,894) 21,115
Cash flow from investing activities
Net cash received on acquisition of subsidiary 107,942 --
Payments for property, plant and equipment (92) (147)
Payments for intangible assets (830) (298)
Deposit interest received 3 86
Net cash flow (used in)/from investing
activities 107,023 (359)
Cash flow from financing activities
Net costs from issue of equity instruments (116) --
Interest paid (7,597) (6,190)
Payment of leases (789) (846)
Net cash flow from financing activities (8,502) (7,036)
------------ ------------
Exchange and other movements (2,248) (5,567)
Net change in cash and cash equivalents 4,379 8,153
Cash and cash equivalents at beginning of the
period 118,798 67,229
Restricted cash at end of the period 10 50 792
Cash at bank available on demand at end of the
period 10 123,127 74,590
Total cash and cash equivalents at end of the
period 10 123,177 75,382
Amryt Pharma plc
Condensed Consolidated Statement of Changes in Equity
For the period ended September 30, 2021
(unaudited)
Share based Reverse Equity component Currency
Share Share Warrant Treasury payment Merger acquisition of convertible Other distributable translation Accumulated
Note capital premium reserve shares reserve reserve reserve notes reserves reserve deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at January 1, 2021
(audited) 13,851 51,408 14,762 (7,421) 7,860 42,627 (73,914) 29,210 217,634 5,730 (235,605) 66,142
Loss for the period -- -- -- -- -- -- -- -- -- -- (40,545) (40,545)
Foreign exchange translation
reserve -- -- -- -- -- -- -- -- -- 2,583 -- 2,583
Total comprehensive loss -- -- -- -- -- -- -- -- -- 2,583 (40,545) (37,962)
Transactions with owners
Issue of treasury shares
in exchange for warrants 11 23 99 -- 439 -- -- -- -- -- -- -- 561
Issue of treasury shares
for share options exercised 11 25 89 -- 465 (191) -- -- -- -- -- -- 388
Issue of shares and treasury
shares in exchange for warrants 11 749 7,496 (14,762) 6,517 -- -- -- -- -- -- -- --
Issue of shares in consideration
of Chiasma Acquisition 5 10,547 249,789 -- -- -- -- -- -- -- -- -- 260,336
Share based payment reserve
recognized on Chiasma acquisition 11 -- -- -- -- 10,157 -- -- -- -- -- -- 10,157
Issue of shares for share
options exercised and vesting
of RSUs 11 66 1,897 -- -- (1,467) -- -- -- -- -- -- 496
Share based payment expense 4 -- -- -- -- 5,905 -- -- -- -- -- -- 5,905
Share based payment expense
-- Lapsed -- -- -- -- (54) -- -- -- -- -- 54 --
Total transactions with
owners 11,410 259,370 (14,762) 7,421 14,350 -- -- -- -- -- 54 277,843
Balance at September 30,
2021 (unaudited) 25,261 310,778 -- -- 22,210 42,627 (73,914) 29,210 217,634 8,313 (276,096) 306,023
For the period ended September 30, 2020
(unaudited)
Share based Reverse Equity component Currency
Share Share Warrant Treasury payment Merger acquisition of convertible Other distributable translation Accumulated
Note capital premium reserve shares reserve reserve reserve notes reserves reserve deficit Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at January 1, 2020
(audited) 11,918 2,422 29,523 (7,534) 3,190 42,627 (73,914) 29,210 217,634 7,894 (131,137) 131,833
Loss for the period -- -- -- -- -- -- -- -- -- -- (57,537) (57,537)
Foreign exchange translation
reserve -- -- -- -- -- -- -- -- -- (2,850) -- (2,850)
Total comprehensive loss -- -- -- -- -- -- -- -- -- (2,850) (57,537) (60,387)
Transactions with owners
Issue of shares in exchange
for warrants 11 630 14,131 (14,761) -- -- -- -- -- -- -- --
Share based payment expense 4 -- -- -- -- 3,136 -- -- -- -- -- -- 3,136
Share based payment expense
-- Lapsed -- -- -- -- (56) -- -- -- -- -- 56 --
Total transactions with
owners 630 14,131 (14,761) -- 3,080 -- -- -- -- -- 56 3,136
Balance at September 30,
2020 (unaudited) 12,548 16,553 14,762 (7,534) 6,270 42,627 (73,914) 29,210 217,634 5,044 (188,618) 74,582
1. General information
Amryt is a global commercial-stage biopharmaceutical company
focused on acquiring, developing and commercializing innovative
treatments to help improve the lives of patients with rare and
orphan diseases. Amryt comprises a strong and growing portfolio of
commercial and development assets.
As used herein, references to "we," "us," "Amryt" or the "Group"
in these condensed consolidated interim financial statements shall
mean Amryt Pharma plc and its global subsidiaries, collectively.
References to the "Company" in these condensed consolidated interim
financial statements shall mean Amryt Pharma plc.
Amryt Pharma plc is a company incorporated in England and Wales.
The Company is listed on Nasdaq (ticker: AMYT) and the AIM market
of the London Stock Exchange (ticker: AMYT).
Amryt acquired Chiasma, Inc. ("Chiasma") in August 2021. The
combined company will be a global leader in rare and orphan
diseases with three on-market commercial products, a global
commercial and operational footprint and a significant development
pipeline of therapies with the financial flexibility to execute its
growth plans. Amryt's commercial business comprises three orphan
disease products -- metreleptin (Myalept(R)/ Myalepta(R)); oral
octreotide (Mycapssa(R)); and lomitapide (Juxtapid(R)/
Lojuxta(R)).
Amryt's lead development candidate, Oleogel-S10 (Filsuvez(R)) is
a potential treatment for the cutaneous manifestations of
Junctional and Dystrophic Epidermolysis Bullosa ("EB"), a rare and
distressing genetic skin disorder affecting young children and
adults for which there is currently no approved treatment.
Filsuvez(R) has been selected as the brand name for Oleogel-S10.
The product does not currently have regulatory approval to treat EB
but has been submitted to the FDA for approval and in June 2021,
Amryt received confirmation from the FDA that its NDA for
Oleogel-S10 had been accepted and granted priority review. The FDA
also set a target PDUFA date of November 30, 2021. In Europe, a MAA
for Oleogel-S10 was accepted for assessment by the EMA in March
2021.
2. Accounting policies
Basis of preparation
The condensed consolidated interim financial statements of the
Group have been prepared in accordance with IAS 34 Interim
Financial Reporting. They do not include all of the information
required in annual financial statements in accordance with
International Financial Reporting Standards ("IFRS") and should be
read in conjunction with the annual consolidated financial
statements for the year ended December 31, 2020. Selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the Group's financial
position and performance since the last annual financial
statements. The accounting policies used in the preparation of the
interim financial information are the same as those used in the
Group's audited financial statements for the year ended December
31, 2020 and those which are expected to be used in the financial
statements for the year ended December 31, 2021.
Results for the nine-month period ended September 30, 2021 are
not necessarily indicative of the results that may be expected for
the financial year ending December 31, 2021.
Basis of going concern
Having considered the Group's current financial position and
cash flow projections, the Board of Directors believes that the
Group will be able to continue in operational existence for at
least the next 12 months from the date of approval of these
condensed consolidated interim financial statements and that it is
appropriate to continue to prepare the condensed consolidated
interim financial statements on a going concern basis.
As part of their inquiries, the Board of Directors reviewed
budgets, projected cash flows, and other relevant information for a
period not less than 12 months from the date of approval of the
condensed consolidated interim financial statements for the period
ended September 30, 2021.
Basis of consolidation
The condensed consolidated interim financial statements comprise
the financial statements of the Group for the period ended
September 30, 2021. Subsidiaries are entities controlled by the
Company. Where the Company has control over an investee, it is
classified as a subsidiary. The Company controls an investee if all
three of the following elements are present: power over an
investee, exposure or rights to variable returns from its
involvement with the investee and the ability to use its power to
affect those variable returns. Control is reassessed whenever facts
and circumstances indicate that there may be a change in any of
these elements of control.
Subsidiaries are fully consolidated from the date that control
commences until the date that control ceases. Accounting policies
of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group. Intergroup
balances and any unrealized gains or losses, income or expenses
arising from intergroup transactions are eliminated in preparing
the condensed consolidated interim financial statements.
Presentation of balances
The condensed consolidated interim financial statements are
presented in U.S. dollars ("US$"), rounded to the nearest thousand,
which is the functional currency of the Company and presentation
currency of the Group.
The following table discloses the major exchange rates of those
currencies other than the functional currency of US$ that are
utilized by the Group:
Foreign currency units to 1
US$ EUR GBP CHF SEK NOK DKK
Average three-month period
to September 30, 2021 (unaudited) 0.8292 0.7253 0.9043 8.3868 8.5171 6.1669
Average nine-month period to
September 30, 2021 (unaudited) 0.8303 0.7157 0.9116 8.4230 8.3785 6.1747
At September 30, 2021 (unaudited) 0.8589 0.7417 0.9314 8.7634 8.7140 6.3870
Foreign currency units to 1
US$ EUR GBP CHF SEK NOK DKK
Average year ended December
31, 2020 (audited) 0.8777 0.7799 0.9391 9.2135 9.4206 6.5432
At December 31, 2020
(audited) 0.8141 0.7365 0.8829 8.1885 8.5671 6.0570
Foreign currency units to 1
US$ EUR GBP CHF SEK NOK DKK
Average three-month period
to September 30, 2020 (unaudited) 0.8905 0.7873 0.9508 9.4111 9.5480 6.6422
Average nine-month period to
September 30, 2020 (unaudited) 0.8562 0.7749 0.9203 8.8756 9.1384 6.3740
At September 30, 2020 (unaudited) 0.8543 0.7777 0.9220 9.0060 9.4528 6.3604
(EUR = Euro; GBP = Pounds Sterling, CHF = Swiss Franc, SEK =
Swedish Kroner, NOK = Norwegian Kroner, DKK = Danish Kroner)
Changes in accounting policies and disclosures
There are no new standards and amendments to IFRS effective as
of January 1, 2021 that are relevant to the Group.
Critical accounting judgements and key sources of estimation
uncertainty
In preparing these condensed consolidated interim financial
statements in conformity with IFRS management is required to make
judgements, estimates and assumptions that affect the application
of policies and amounts reported in the condensed consolidated
interim financial statements and accompanying notes. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The significant estimates, assumptions or judgements, applied in
the condensed consolidated interim financial statements were the
same as those applied in the Group's audited financial statements
for the year ended December 31, 2020.
Principal accounting policies
The condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies adopted in
the Group's audited financial statements for the year ended
December 31, 2020 other than for those applied in the acquisition
accounting for the Chiasma acquisition (see Note 5, Business
combinations and asset acquisitions).
3. Segment information
The Group is a global, commercial-stage biopharmaceutical
company dedicated to commercializing and developing novel
therapeutics to treat patients suffering from serious and
life-threatening rare diseases.
The Group currently operates as one business segment,
pharmaceuticals, and is focused on the development and
commercialization of three commercial products and a number of
development products. The Group derives its revenues primarily from
one source, being the pharmaceutical sector with high unmet medical
need.
The Group's Chief Executive Officer, Joseph Wiley, is currently
the Company's chief operating decision maker ("CODM"). The Group
does not operate any separate lines of business or separate
business entities with respect to its products. Accordingly, the
Group does not accumulate discrete financial information with
respect to separate service lines and does not have separate
reportable segments.
The following table summarizes total revenues from external
customers by product and by geographic region, based on the
location of the customer.
Three months ended September 30, 2021 (unaudited)
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 18,748 15,618 1,927 36,293
Lomitapide 8,568 6,406 3,564 18,538
Mycapssa(R) 1,453 -- -- 1,453
Other -- 166 69 235
Total revenue 28,769 22,190 5,560 56,519
Three months ended September 30, 2020 (unaudited)
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 15,877 6,423 7,578 29,878
Lomitapide 9,233 7,109 2,771 19,113
Mycapssa(R) -- -- -- --
Other -- 201 134 335
Total revenue 25,110 13,733 10,483 49,326
Nine months ended September 30, 2021 (unaudited)
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 52,726 39,594 16,992 109,312
Lomitapide 25,382 21,338 9,452 56,172
Mycapssa(R) 1,453 -- -- 1,453
Other -- 582 194 776
Total revenue 79,561 61,514 26,638 167,713
Nine months ended September 30, 2020 (unaudited)
U.S. EMEA Other Total
US$'000 US$'000 US$'000 US$'000
Metreleptin 45,457 26,233 13,014 84,704
Lomitapide 28,047 18,683 7,856 54,586
Mycapssa(R) -- -- -- --
Other -- 573 222 795
Total revenue 73,504 45,489 21,092 140,085
Major Customers
For the three and nine months ended September 30, 2021, one
customer accounted for 47% and 48%, respectively, of the Group's
net revenues (2020: 51% and 52%, respectively) and accounted for
42% of the Group's September 30, 2021 accounts receivable balance
(December 31, 2020: 42%).
4. Share based payments
Share-based Compensation Plans
Amryt's Equity Incentive Plan
Amryt's Equity Incentive Plan was established by a special
resolution on 23 September 2019 and was subsequently amended by the
Board on 18 May 2020 and 3 August 2021. The purpose of the Plan is
to provide for the granting of Equity Incentives to Directors and
Employees of, and Consultants to, the Company or any Associated
Company.
Chiasma Equity Incentive Plan
When Amryt acquired Chiasma in August 2021, the Chiasma Stock
Option and Incentive Plan transferred across to Amryt. Each
outstanding and unexercised Chiasma Stock Option or RSU, whether or
not vested, ceased to represent a right to acquire shares of
Chiasma common stock and were converted into an option to purchase
Amryt ADSs on the same terms and conditions as were applicable
under such Chiasma Stock Option and Incentive Plan immediately
prior to the acquisition.
No new stock option or RSUs will be granted under the Chiasma
stock option and incentive plan.
Terms and Conditions of New Grants and Grants Under the Chiasma
Equity Incentive Plan
The terms and conditions of new grants are as follows, whereby
all options are settled by physical delivery of shares:
Vesting conditions
The employee share options vest following a period of service by
the officer or employee. The required period of service is
determined by the Remuneration Committee at the date of grant of
the options (usually the date of approval by the Remuneration
Committee). There are no market conditions associated with the
share option vesting periods.
Contractual life
The term of an option is determined by the Remuneration
Committee provided that the term may not exceed a period of seven
to ten years from the date of grant. All options will terminate 90
days after termination of the option holder's employment, service
or consultancy with the Group except where a longer period is
approved by the Board of Directors. Under certain circumstances
involving a change in control of the Group, some options will
automatically accelerate and become exercisable in full as of a
date specified by the Board of Directors.
The number and weighted average exercise price (in Sterling
pence) of share options granted under Amryt's Equity Incentive Plan
and the Chiasma stock option and incentive plan is as follows:
Amryt Equity Incentive Chiasma Stock Option
Plan and Incentive Plan
Weighted average Weighted average
exercise price exercise price
(Sterling (Sterling
Units pence) Units pence)
Balance at 1 January 2020 14,481,720 116.00p -- --
Granted 4,432,000 144.76p -- --
Lapsed (87,119) 113.42p -- --
Exercised (72,953) 120.72p -- --
Outstanding at 31 December 2020
(audited) 18,753,648 122.79p -- --
Exercisable at 31 December 2020
(audited) 5,866,152 114.24p -- --
Balance at 1 January 2021 18,753,648 122.79p -- --
Granted 10,663,959 192.40p -- --
Transferred to Amryt on
acquisition -- 18,139,060 189.07p
Forfeited (1,162,976) 175.91p (257,335) 183.64p
Exercised (300,000) 93.00p (441,280) 0.98p
Outstanding at September 30, 2021
(unaudited) 27,954,631 147.45p 17,440,445 191.46p
Exercisable at September 30, 2021
(unaudited) 6,938,801 118.56p 13,552,670 185.75p
The fair value of the Amryt equity award is estimated at the
date of grant using the Black-Scholes pricing model, taking into
account the terms and conditions attached to the grant. The fair
value of the Chiasma equity awards transferred to Amryt on
acquisition were measured in accordance with IFRS 2. The portion of
the value of the equity transferred to Amryt attributable to
pre-combination service is included in the consideration at the
date of acquisition. The portion of the equity awards transferred
to Amryt attributable to post combination service is estimated at
the date of transfer using Black Scholes pricing model, taking into
account the terms and conditions attached to the grant.
The following are the inputs to the model for the equity
instruments granted during the period:
September
30, December 31,
2021 2020
Options Inputs Options Inputs
(unaudited) (audited)
Days to Expiration 2,555 2,555
Volatility 32% - 49% 33% - 37%
Risk free interest rate 0.77% - 0.94% 0.39% - 0.46%
Share price at grant 146.87 - 201.2p 123.5p -- 178.9p
In the nine months ended September 30, 2021, a total of
10,663,959 share options over ordinary shares exercisable at a
weighted average price of GBP1.92 were granted. The fair value of
share options granted in the nine months ended September 30, 2021
was GBP20,517,000/US$28,302,000.
The share options outstanding under the Amryt 2021 Equity
Incentive Plan as at September 30, 2021 have a weighted remaining
contractual life of 5.32 years with exercise prices ranging from
GBP0.76 to GBP2.012 per ordinary share.
The share options outstanding under the Chiasma Share Option and
Incentive Plan transferred across to Amryt on acquisition. As at
September 30, 2021 they have a weighted remaining contractual life
of 3.23 years with exercise prices ranging from GBP0.54 to GBP9.35
per ordinary share. No new share options will be granted under the
Chiasma Stock Option and Incentive Plan.
Restricted Share Units
Under the terms of Amryt's Equity Incentive Plan, restricted
share units ("RSUs") to purchase 1,604,205 ordinary shares were
outstanding at September 30, 2021. Under the terms of this plan,
RSUs are granted to officers, consultants and employees of the
Group at the discretion of the Remuneration Committee. For the
period ended September 30, 2021, a total of 551,405 RSUs were
granted to employees of the company. For the year ended December
31, 2020, a total of 1,556,960 RSUs were granted to employees of
the company. The fair value of the RSUs is based on the share price
at the date of grant, with the expense spread over the vesting
period. The fair value of RSUs granted in the period ended
September 30, 2021 was US$1,358,000. At September 30, 2021, the
total RSUs granted to date have a weighted remaining contractual
life of 2.1 years.
Under the terms of Chiasma's Stock Option and Incentive Plan
transferred to Amryt on acquisition, restricted share units
("RSUs") to purchase 157,225 ordinary shares were outstanding at
September 30, 2021. At September 30, 2021, the total RSUs granted
to date have a weighted remaining contractual life of 2.3 years. No
new RSUs will be granted under the Chiasma Stock Option and
Incentive Plan.
The following table summarizes the RSU activity for the
period:
Amryt Equity Incentive Chiasma Stock Option
Plan and Incentive Plan
Weighted average Weighted average
fair value fair value
Units (US$) Units (US$)
Balance at 1 January 2021 1,549,910 $2.35 -- --
Granted 551,405 $2.66 -- --
Transferred to Amryt on
acquisition -- -- 202,145 $2.75
Lapsed (134,255) $2.39 (36,610) $2.75
Vested (362,855) $2.34 (8,310) $2.75
Outstanding at 30 September 2021
(unaudited) 1,604,205 $2.44 157,225 $2.75
Warrants
There are no outstanding warrants at September 30, 2021
(December 31, 2020: 9,312,062). In August 2021, an Amryt
institutional investor exercised subscription rights relating to
8,966,520 zero cost warrants. These warrants were issued in
September 2019 as part of the Company's acquisition of Aegerion.
Certain institutional investors elected to receive warrants to
subscribe for new ordinary shares of GBP0.06 each in Amryt
("Ordinary Shares"), in place of the same number of Ordinary
Shares, as consideration for the Company's acquisition of Aegerion
and their equity investments in the Company in September 2019. Each
warrant entitled the holder to subscribe for one Ordinary Share for
no additional consideration.
Separate warrants consisting of 345,542 as at December 31, 2020,
which were issued in connection with the admission to the AIM in
2016, are no longer outstanding; 283,389 warrants were exercised in
March 2021 and 62,153 warrants lapsed in April 2021.
The number and weighted average exercise price (in Sterling
pence) of warrants per ordinary share is as follows:
Warrants
Units Weighted average
exercise price
(Sterling pence)
Balance at 1 January 2020 17,541,815 0.03p
Granted -- --
Lapsed -- --
Exercised (8,229,753) --
Outstanding at 31 December 2020 9,312,062 0.05p
(audited)
Exercisable at 31 December 2020 9,312,062 0.05p
(audited)
Balance at 1 January 2021 9,312,062 0.05p
Granted -- --
Lapsed (62,153) 1.44p
Exercised (9,249,909) 0.05p
Outstanding at September 30, 2021 -- 0.00p
(unaudited)
The value of share options and RSU's charged to the Condensed
Consolidated Statement of Comprehensive Loss during the period is
as follows:
Three months ended Nine months ended
September 30, September 30,
2021 2020 2021 2020
(unaudited) (unaudited) (unaudited) (audited)
------------ ----------
US$'000 US$'000 US$'000 US$'000
Share option
expense 2,173 1,307 4,525 2,910
RSU expense 516 226 1,380 226
Total share option
expense 2,689 1,533 5,905 3,136
5. Business combinations and asset acquisitions
Acquisition of Chiasma
On May 5, 2021, Amryt announced that it had signed a definitive
agreement to acquire Chiasma, Inc. (Nasdaq: CHMA) in an all-stock
combination. Under the terms of the transaction, each share of
Chiasma common stock issued and outstanding prior to the
consummation of the transaction was exchanged for 0.396 Amryt
American Depositary Shares ("ADSs"), each representing five Amryt
ordinary shares.
On August 5, 2021, Amryt completed the acquisition of Chiasma,
Inc and in conjunction with the completion Amryt allotted and
issued a total of 127,733,680 ordinary shares as consideration for
the acquisition. Following the completion, shareholdings in Chiasma
were rounded in being converted to Amryt shares using the exchange
ratio of 0.396. The roundings in converting Chiasma shareholdings
to Amryt shares were finalized in August 2021 and resulted in an
additional 7,015 ordinary shares being allotted and issued by Amryt
as consideration for the acquisition. In total, these ordinary
shares were issued to the former Chiasma Shareholders in the form
of 25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a
value of US$260,336,000.
On August 5, 2021, Chiasma had outstanding equity awards that
were held by Chiasma employees, the fair value of these awards
transferred to Amryt on acquisition were measured in accordance
with IFRS 2. The portion of the value of the equity transferred to
Amryt attributable to pre-combination service is included in the
consideration at the date of acquisition and this amounted to
US$10,157,000.
The combined company will be a global leader in rare and orphan
diseases with three on-market commercial products, a global
commercial and operational footprint and a significant development
pipeline of therapies with the financial flexibility to execute its
growth plans.
The table below reflects the fair value of the identifiable net
assets acquired in respect of the acquisition completed during the
period. Any amendments to fair values will be made within the
twelve-month period from the date of acquisition, as permitted by
IFRS 3 Business Combinations.
The acquired goodwill is attributable principally to the profit
generating potential of the businesses, the assembled workforce and
benefits arising from embedded infrastructure, that are expected to
be achieved from integrating the acquired businesses into the
Group's existing business. No amount of goodwill is expected to be
deductible for tax purposes.
In the post-acquisition period to September 30, 2021, the
business acquired during the current year contributed revenue of
US$1,453,000 and a trading loss of US$11,994,000 to the Group's
results. The full year unaudited revenue and trading loss had the
acquisition taken place at the start of the year has not been
disclosed as the initial accounting is incomplete.
The gross contractual value of trade and other receivables as at
the dates of acquisition amounted to US$7,000,000, which
approximated the fair value of these accounts as the amount not
expected to be collected was insignificant.
The Group incurred acquisition and restructuring related costs
of US$14,679,000 in the nine months ended September 30,2021,
relating to external legal fees, advisory fees, due diligence costs
and severance costs related to the acquisition of Chiasma. These
costs have been included in operating costs in the Condensed
Consolidated Statement of Comprehensive Loss.
The initial assignment of fair values to identifiable net assets
acquired has been performed on a provisional basis due to the
relative size of the acquisition and the timing of the transaction.
Any amendments to these fair values within the twelve-month
timeframe from the date of acquisition will be disclosed in the
2022 consolidated financial statements, as stipulated by IFRS
3.
Provisional Fair Value
as at August 5, 2021
(unaudited)
US$'000
Assets
Non-current assets
Intangible assets 220,000
Property, plant and equipment 950
Other non-current assets 866
Total non-current assets 221,816
Current assets
Trade and other receivables 7,000
Inventories 61,527
Cash and cash equivalents, including restricted
cash 107,942
Total current assets 176,469
Total assets 398,285
Non-current liabilities
Deferred tax liability 47,117
Total non-current liabilities 47,117
----------------------
Current liabilities
Trade and other payables 142,469
Total current liabilities 142,469
----------------------
Total liabilities 189,586
Total identifiable net assets at fair value 208,699
Goodwill arising on acquisition 61,794
Consideration 270,493
Consideration
Issue of fully paid up ordinary shares 260,336
Chiasma equity awards recognized as consideration
transferred upon the acquisition of Chiasma 10,157
Total consideration 270,493
Acquisition of Aegerion Pharmaceuticals
On May 20, 2019, Amryt entered into a Restructuring Support
Agreement (as subsequently amended on June 12, 2019) and Plan
Funding Agreement pursuant to which, among other matters, Amryt
agreed to the acquisition of Aegerion Pharmaceuticals, Inc.
("Aegerion", subsequently renamed as Amryt Pharmaceuticals Inc.), a
former wholly-owned subsidiary of Novelion Therapeutics Inc.
("Novelion"). On May 20, 2019, Aegerion and its U.S. subsidiary,
Aegerion Pharmaceuticals Holdings, Inc., filed voluntary petitions
under Chapter 11 of Title 11 of the U.S. Code in the Bankruptcy
Court. On September 24, 2019, Amryt completed the acquisition of
Aegerion. Amryt acquired Aegerion upon its emergence from
bankruptcy in an exchange for ordinary shares and zero cost
warrants in Amryt. Amryt issued 85,092,423 effective shares at
US$1.793 per share, which is made up of 77,027,423 ordinary shares
and 8,065,000 zero cost warrants, to acquire Aegerion for a value
of US$152,615,000.
As part of the acquisition of Aegerion, it was agreed, for
certain Aegerion creditors who wished to restrict their percentage
share interest in Amryt's issued share capital, to issue to the
relevant Aegerion creditor, as an alternative to Amryt's ordinary
shares, an equivalent number of new zero cost warrants to subscribe
for Amryt's ordinary shares to be constituted on the terms of the
zero cost warrant. As at 30 September, 2021, no zero cost warrants
were remaining and the remaining balance of zero cost warrants were
exercised during the three-month period ended June 30, 2021.
During the three-month and nine-month periods ended September
30, 2021, the Group incurred no additional acquisition and
restructuring related costs relating to external legal fees,
advisory fees, due diligence costs and severance costs related to
the acquisition of Aegerion (September 30, 2020: US$105,000 and
US$1,005,000, respectively).
Contingent Value Rights
Related to the Aegerion acquisition, Amryt issued Contingent
Value Rights ("CVRs") pursuant to which up to US$85,000,000 may
become payable to Amryt's shareholders and optionholders, who were
on the register prior to the completion of the acquisition on
September 20, 2019, if certain approval and revenue milestones are
met in relation Oleogel-S10, Amryt's lead product candidate. If any
such milestone is achieved, Amryt may elect to pay the holders of
CVRs by the issue of Amryt shares or loan notes. If Amryt elects to
issue Loan Notes to holders of CVRs, it will settle such loan notes
in cash 120 days after their issue. If none of the milestones are
achieved, scheme shareholders and optionholders will not receive
any additional consideration under the terms of the CVRs. In these
circumstances, the value of each CVR would be zero.
The terms of the CVRs are as follows:
-- The total CVR payable is up to US$85,000,000
-- This is divided into three milestones which are related to the success
of Oleogel-S10 (the Group's lead development asset)
-- FDA approval
-- US$35,000,000 upon FDA approval
-- 100% of the amount due if approval is obtained before December
31, 2021, with a sliding scale on a linear basis to zero if before
July 1, 2022
-- EMA approval
-- US$15,000,000 upon EMA approval
-- 100% of the amount due if approval is obtained before December
31, 2021, with a sliding scale on a linear basis to zero if before
July 1, 2022
-- Revenue targets
-- US$35,000,000 upon Oleogel-S10 revenues exceeding US$75,000,000
in any 12-month period prior to June 30, 2024
-- Payment can at the Board's discretion be in the form of either:
-- 120-day loan notes (effectively cash), or
-- Shares valued using the 30 day / 45-day VWAP.
The CVRs were contingent on the successful completion of the
acquisition and, accordingly, have been based on fair value as at
September 24, 2019. The CVRs have been classified as a financial
liability in the Condensed Consolidated Statement of Financial
Position. Given that CVRs were issued to legacy Amryt shareholders
in their capacity as owners of the identified acquirer as opposed
to the seller in the transaction, management concluded that the
most appropriate classification would be to recognize the CVR as a
distribution on consolidation instead of goodwill.
Measurement of CVRs
As at September 30, 2021, the carrying value of the CVRs was
US$66,932,000 (December 31, 2020: US$61,417,000). The value of the
potential payout was calculated using the probability-weighted
expected returns method. Using this method, the potential payment
amounts were multiplied by the probability of achievement and
discounted to present value. The probability adjusted present
values took into account published orphan drug research data and
statistics which were adjusted by management to reflect the
specific circumstances applicable to the type of product acquired
in the Amryt GmbH transaction. The market-based probability chance
of success is based on market benchmarks for orphan drugs was
estimated at 89% in the period ended September 30, 2021 (2020:
89%). Discount rates of 10% and 16.5%, as applicable, were used in
the calculation of the present value of the estimated contractual
cash flows for the period ended September 30, 2021 (December 31,
2020: 10% and 16.5%). Management was required to make certain
estimates and assumptions in relation to revenue forecasts, timing
of revenues and probability of achievement of commercialization of
Oleogel-S10. However, management notes that, due to issues outside
their control (i.e. regulatory requirements and the commercial
success of the product), the timing of when such revenue targets
may occur may change. Such changes may have a material impact on
the assessment of the expected cash flows of the CVRs.
Amryt reviews the expected cash flows on a regular basis as the
discount on initial recognition is being unwound as financing
expenses in the Condensed Consolidated Statement of Comprehensive
Loss over the life of the obligation. It is reviewed on a quarterly
basis and the appropriate finance charge is booked in the Condensed
Consolidated Statement of Comprehensive Loss on a quarterly basis.
The Group received positive topline data from the phase 3 EASE
trial of Oleogel-S10 in September 2020. The product does not
currently have regulatory approval to treat EB but has been
submitted to the FDA for approval and in June 2021, Amryt received
confirmation from the FDA that its NDA for Oleogel-S10 had been
accepted and granted priority review. The FDA also set a target
PDUFA date of November 30, 2021. In Europe, a MAA for Oleogel-S10
was accepted for assessment by the EMA in March 2021.
The total non-cash finance charge recognized in the Condensed
Consolidated Statement of Comprehensive Loss for the three and nine
months ended September 30, 2021 is US$1,915,000 and US$5,515,000
(September 30, 2020: US$1,557,000 and US$4,498,000,
respectively).
Acquisition of Amryt GmbH (previously "Birken")
Amryt DAC signed a conditional share purchase agreement to
acquire Amryt GmbH on October 16, 2015 ("Amryt GmbH SPA"). The
Amryt GmbH SPA was completed on April 18, 2016 with Amryt DAC
acquiring the entire issued share capital of Amryt GmbH. The
consideration included contingent consideration comprising
milestone payments and sales royalties as follows:
-- Milestone payments of:
-- EUR10,000,000 on receipt of first marketing approval by the EMA
of Episalvan, paid on the completion date (April 18, 2016);
-- Either (i) EUR5,000,000 once net ex-factory sales of Episalvan
have been at least EUR100,000 or (ii) if no commercial sales are
made within 24 months of EMA first marketing approval (being
January 14, 2016), EUR2,000,000 24 months after receipt of such
approval, which was paid in January 2018, and EUR3,000,000
following the first commercial sale of Episalvan;
-- EUR10,000,000 on receipt of marketing approval by the EMA or FDA
of a pharmaceutical product containing Betulin as its API for the
treatment of EB;
-- EUR10,000,000 once net ex-factory sales/net revenue of Oleogel
S-10 first exceed EUR50,000,000 in any calendar year;
-- EUR15,000,000 once net ex-factory sales/ net revenue of Oleogel
S-10 first exceed EUR100,000,000 in any calendar year;
-- Cash consideration of EUR150,000, due and paid on the completion date
(April 18, 2016); and
-- Royalties of 9% on sales of Oleogel-S10 products for 10 years from first
commercial sale.
Fair Value Measurement of Contingent Consideration
As at September 30, 2021, the fair value of the contingent
consideration was estimated to be US$91,067,000 (December 31, 2020:
US$86,906,000). The fair value of the contingent consideration
included milestone payments determined using probability adjusted
present values and probability weighted revenue forecasts (see Note
15, Fair value measurement and financial risk management, for fair
value hierarchy applied and impact of key unobservable impact
data). The probability adjusted present values took into account
published orphan drug research data and statistics which were
adjusted by management to reflect the specific circumstances
applicable to the type of product acquired in the Amryt GmbH
transaction. The market-based probability chance of success is
based on market benchmarks for orphan drugs was estimated at 89%
for the period ended September 30, 2021 (December 31, 2020: 89%)
following the positive results from our phase 3 EASE trial of
Oleogel-S10 earlier in the year. A discount rate of 14.4% was used
in the calculation of the fair value of the contingent
consideration for the three months ended September 30, 2021
(December 31, 2020: 14.4%).
The Group received positive top line results from the phase 3
EASE trial of Oleogel-S10 in September 2020. The product does not
currently have regulatory approval to treat EB but has been
submitted to the FDA for approval and in June 2021, Amryt received
confirmation from the FDA that its NDA for Oleogel-S10 had been
accepted and granted priority review. The FDA also set a target
PDUFA date of November 30, 2021. In Europe, a MAA for Oleogel-S10
was accepted for assessment by the EMA in March 2021. Amryt reviews
the contingent consideration on a regular basis as the probability
adjusted fair values are being unwound as financing expenses in the
Condensed Consolidated Statement of Comprehensive Loss over the
life of the obligation. The finance charge is being unwound as a
financing expense in the Condensed Consolidated Statement of
Comprehensive Loss on a quarterly basis.
The total non-cash finance charge recognized in the Condensed
Consolidated Statement of Comprehensive Loss for the three and nine
months ended September 30, 2021 is US$3,030,000 and US$8,897,000
(September 30, 2020: US$2,126,000 and US$8,150,000,
respectively).
6. Loss per share - basic and diluted
The weighted average number of shares in the loss per share
("LPS") calculation, reflects the weighted average total actual
shares of Amryt Pharma plc in issue at September 30, 2021.
Issued share capital - ordinary shares of GBP0.06 each
Number of shares Weighted average shares
---------------- ----------------------------------
Three months Nine months
As at ended September ended September
September 30, 30, 30,
----------------
2021 (unaudited) 316,904,642 264,368,691 207,876,731
2020 (unaudited) 162,718,438 158,303,972 155,776,507
The calculation of loss per share is based on the following:
Three months ended Nine months ended
September 30, September 30,
2021 2020 2021 2020
(unaudited) (unaudited) (unaudited) (unaudited)
------------ ------------
Loss after tax attributable to
equity holders of the Company (US$'000) (17,209) (10,471) (40,545) (57,537)
Weighted average number of ordinary
shares in issue 264,368,691 158,303,972 207,876,731 155,776,507
Fully diluted average number of
ordinary shares in issue 264,368,691 158,303,972 207,876,731 155,776,507
Basic and diluted loss per share
(US$) (0.07) (0.07) (0.20) (0.37)
Where a loss has occurred, basic and diluted LPS are the same
because the outstanding share options and warrants are
anti-dilutive. Accordingly, diluted LPS equals the basic LPS. The
share options, RSUs and warrants outstanding as at September 30,
2021 totaled 47,156,506 (September 30, 2020: 28,065,710) and are
potentially dilutive.
7. Intangible assets and goodwill
The following table summarizes the Group's intangible assets and
goodwill:
Developed Developed Developed
technology technology technology In process Other intangible Total intangible
- metreleptin - lomitapide - Mycapssa(R) R&D assets assets Goodwill
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Cost
At January 1, 2020
(audited) 176,000 123,000 -- 54,261 701 353,962 19,131
Additions -- -- -- -- 372 372 --
Acquired assets -- -- -- 591 -- 591 --
Disposals -- -- -- -- (246) (246) --
Foreign exchange movement -- -- -- 5,276 39 5,315 --
At December 31, 2020
(audited) 176,000 123,000 -- 60,128 866 359,994 19,131
Additions -- -- -- -- 830 830 --
Acquired assets -- -- 220,000 -- -- 220,000 61,794
Other movements -- -- -- -- -- -- (1,051)
Foreign exchange movement -- -- -- (3,137) (40) (3,177) --
At September 30, 2021
(unaudited) 176,000 123,000 220,000 56,991 1,656 577,647 79,874
Accumulated amortization
At January 1, 2020
(audited) 7,314 4,143 -- -- 178 11,635 --
Amortization charge 27,429 15,537 -- -- 202 43,168 --
Accumulated amortization
on disposals -- -- -- -- (246) (246) --
Foreign exchange movement -- -- -- -- 68 68 --
At December 31, 2020
(audited) 34,743 19,680 -- -- 202 54,625 --
Amortization charge 20,571 11,653 1,960 -- 90 34,274 --
Foreign exchange movement -- -- -- -- 15 15 --
At September 30, 2021
(unaudited) 55,314 31,333 1,960 -- 307 88,914 --
Net book value
At December 31, 2020
(audited) 141,257 103,320 -- 60,128 664 305,369 19,131
At September 30, 2021
(unaudited) 120,686 91,667 218,040 56,991 1,349 488,733 79,874
Developed technology on commercially marketed products
In connection with the acquisition of Aegerion in September
2019, the Group acquired developed technology, metreleptin and
lomitapide. These intangible assets are amortized over their
estimated useful lives and the remaining useful lives for
metreleptin and lomitapide are approximately 4.4 and 6.0 years,
respectively, as of September 30, 2021 (December 31, 2020: 5.2 and
6.7 years, respectively).
In connection with the acquisition of Chiasma in August 2021,
the Group acquired developed technology, octreotide. This
intangible asset is amortized over its estimated useful life and
the remaining useful life is approximately 14.3 years as of
September 30, 2021.
In-process R&D
As a result of the acquisition of Amryt GmbH, in 2016, the Group
recognized in-process R&D costs of EUR48,453,000/US$56,409,000
which is related to the Group's lead development asset,
Oleogel-S10. The remaining in-process R&D is a result of the
acquisition of Cala Medical Limited in October 2020.
Goodwill
During 2019, the Group completed the acquisition of Aegerion,
which resulted in aggregate goodwill of US$18,080,000. On August 5,
2021, the Group completed the acquisition of Chiasma, which
resulted in aggregate goodwill of US$61,794,000.
The Group reviews events or changes in circumstances that may
indicate a triggering event for impairment. Management applied its
judgment in determining that there were no events or changes in
circumstances causing any impairment triggers as of September 30,
2021. As such there was no impairment charge recorded during the
three and nine months ended September 30, 2021.
8. Trade and other receivables
As at
September December 31,
30, 2021 2020
(unaudited) (audited)
------------
US$'000 US$'000
Trade receivables 37,458 33,057
Accrued income and other debtors 9,808 8,423
VAT recoverable 5,527 1,705
Trade and other receivables 52,793 43,185
9. Inventories
As at
September December 31,
30, 2021 2020
(unaudited) (audited)
------------
US$'000 US$'000
Raw materials 29,462 25,462
Work in progress 31,550 3,903
Finished goods 39,827 11,627
Inventories 100,839 40,992
The increase in inventories for the nine months ended September
30, 2021, reflected the fair value of inventory acquired as part of
the acquisition of Chiasma on August 5, 2021. The fair value of the
acquired inventory amounted to US$61,527,000. Inventory on hand at
the date of acquisition was valued at the expected selling price
less the sum of remaining costs of disposal, cost to complete and a
reasonable profit margin for the selling effort of the acquiring
entity based on the EBITDA margin as a percentage of sales. The
costs to complete were calculated based on costs incurred on
recently completed finished goods. The costs to dispose were
calculated based on the average costs as a percentage of revenue
through the period in which the current finished goods inventory is
expected to be sold. This resulted in a non-cash step up at the
valuation of inventory at August 5, 2021 of US$40,414,000. The
non-cash step up in inventory is being unwound to the Condensed
Consolidated Statement of Comprehensive Loss over the period in
which this saleable inventory is sold. At September 30, 2021,
US$39,978,000 of this non-cash inventory step up is included in
inventory.
10. Cash and cash equivalents
As at
September December 31,
30, 2021 2020
(unaudited) (audited)
------------
US$'000 US$'000
Cash at bank available on demand 123,127 118,575
Restricted cash 50 223
Total cash and cash equivalents 123,177 118,798
Cash and cash equivalents include cash at bank available on
demand and restricted cash.
At September 30, 2021 there was US$50,000 restricted cash
(December 31, 2020: US$223,000). The balance at December 31, 2020
includes a deposit on a company credit card facility for an amount
of US$150,000. As at September 30, 2021 a letter of credit related
to US customs was put in place for an amount of US$50,000.
11. Share capital and reserves
Details of the number of issued ordinary shares with a nominal
value of Sterling 6 pence (2020: 6 pence) each are in the table
below.
Ordinary Treasury
shares shares Total
At January 1, 2020 154,498,887 4,864,656 159,363,543
Issue of shares in exchange for
warrants 8,229,753 -- 8,229,753
Issue of shares in equity fund raises 16,000,000 -- 16,000,000
Issue of treasury shares for share
options exercised 72,953 (72,953) --
At December 31, 2020 (audited) 178,801,593 4,791,703 183,593,296
Issue of treasury shares in exchange
for warrants 283,389 (283,389) --
Issue of treasury shares for share
options exercised 300,000 (300,000) --
Issue of shares in consideration of
Chiasma acquisition 127,740,695 -- 127,740,695
Issue of shares in exchange for
warrants 4,758,206 -- 4,758,206
Issue of treasury shares in exchange
for warrants 4,208,314 (4,208,314) --
Issue of shares for share options
exercised and RSUs vesting 812,445 -- 812,445
At September 30, 2021 (unaudited) 316,904,642 -- 316,904,642
The components of equity are detailed in the Condensed
Consolidated Statement of Changes in Equity and described in more
detail below.
As at September 30, 2021 there were 316,904,642 ordinary shares
issued with no treasury shares held (December 31, 2020:
183,593,296; 4,791,703).
In December 2020, the Company issued 16,000,000 ordinary shares
in the form of ADSs, as part of a US$40,000,000 private placement
equity raise to existing and new shareholders. The Company issued
4,000,000 and 4,229,753 ordinary shares on July 15, 2020, and
September 22, 2020, respectively, in exchange for certain
warrants.
On March 11, 2021, the Company issued 300,000 ordinary shares
from treasury shares following the exercise of share options. On
March 11, 2021, the Company issued 283,389 ordinary shares from
treasury shares in exchange for certain warrants. On August 5,
2021, the Company issued 127,740,695 ordinary shares, in the form
of ADSs, as consideration for the acquisition of Chiasma. On August
5, 2021, the Company issued 8,966,520 ordinary shares with
4,208,314 being issued from treasury shares in exchange for
warrants. During the three month period ended September 30, 2021,
there were 441,280 shares issued following the exercise of share
options and 371,165 shares issued following RSU vesting.
Share Capital
Share capital represents the cumulative par value arising upon
issue of ordinary shares of Sterling 6 pence each.
The ordinary shares have the right to receive notice of, attend
and vote at general meetings and participate in the profits of the
Company.
Share Premium
Share premium represents the consideration that has been
received in excess of the nominal value on issue of share capital
net of issue costs and transfers to distributable reserves.
Warrant reserve
The warrant reserve represents zero cost warrants issued as part
of the equity raise on September 24, 2019 net of issue costs
apportioned to warrants issued and additional warrants issued to
certain shareholders on November 14, 2019. Each warrant entitles
the holder to subscribe for one ordinary share at zero cost. The
Company issued 4,000,000 and 4,229,753 ordinary shares on July 15,
2020 and September 22, 2020, respectively, in exchange for certain
warrants. The remaining warrants were exchanged on August 5, 2021,
and the Company issued 8,966,520 ordinary shares, 4,208,314 of
which were issued from treasury shares. There were no remaining
warrants outstanding as at September 30, 2021.
Treasury Shares
In October 2020, the Company issued 72,953 ordinary shares from
treasury shares following the exercise of share options. In March
2021, the Company issued a total of 583,389 ordinary shares from
treasury shares, 300,000 ordinary shares relating to the exercise
of share options and 283,389 ordinary shares following the exchange
of certain warrants. In August 2021, the company issued 4,208,314
ordinary shares from treasury shares in conjunction with the
exchange of warrants. There were no treasury shares held as at
September 30, 2021.
Share based payment reserve
Share based payment reserve relates to the charge for share
based payments in accordance with IFRS 2. In March 2021, the
Company issued 283,389 ordinary shares in exchange for certain
warrants, respectively. In April 2021, 62,153 warrants lapsed.
During the nine month period ended September 30, 2021, the Company
issued 741,280 ordinary shares in relation to the exercise of share
options and RSUs.
As part of the acquisition of Chiasma, the Company replaced
share awards that were existing at the time of the acquisition.
This resulted in the recognition of a share-based payment reserve
of US$10,157,000 on acquisition.
Merger reserve
The merger reserve was created on the acquisition of Amryt DAC
by Amryt Pharma plc in April 2016. Ordinary shares in Amryt Pharma
plc were issued to acquire the entire issued share capital of Amryt
DAC. Under section 612 of the UK Companies Act 2006, the premium on
these shares has been included in a merger reserve.
Reverse acquisition reserve
The reverse acquisition reserve arose during the period ended
December 31, 2016 in respect of the reverse acquisition of Amryt
Pharma plc by Amryt DAC. Since the shareholders of Amryt DAC became
the majority shareholders of the enlarged Group, the acquisition is
accounted for as though there is a continuation of Amryt DAC's
financial statements. The reverse acquisition reserve is created to
maintain the equity structure of Amryt Pharma plc in compliance
with UK company law.
Equity component of convertible notes
The equity component of convertible notes represents the equity
component of the US$125,000,000 convertible debt and is measured by
determining the residual of the fair value of the instrument less
the estimated fair value of the liability component. The equity
component is recognized in equity and is not subsequently
remeasured.
Other distributable reserves
Other distributable reserves comprise the following:
-- Distribution of the share premium amount on 6 November 2019 of
US$268,505,000. By special resolution of the Company duly passed on 23
September 2019, it was resolved that the entire amount outstanding to the
credit of the share premium account and capital redemption reserve of the
Company be cancelled. The reduction in capital, amounting to
US$268,505,000, representing the entire amount of share premium at that
time, was approved by the High Court of Justice of England and Wales on 5
November 2019.
-- A deemed distribution of US$47,902,000 arising from the issuance of
CVRs.
-- A deemed distribution of US$2,969,000 arising from the scheme of
arrangement in September 2019 whereby Amryt Pharma plc, which was
incorporated in July 2019, became a 100% shareholder of Amryt Pharma
Holdings Limited (formerly named Amryt Pharma plc) (the "Acquisition of
subsidiary without a change of control")
Currency translation reserve
The currency translation reserve arises on the retranslation of
non-U.S. dollar denominated foreign subsidiaries.
Accumulated deficit
Accumulated deficit represents losses accumulated in previous
periods and the current year.
12. Long term loan
As at
September December 31,
30, 2021 2020
(unaudited) (audited)
------------
US$'000 US$'000
Long term loan principal 92,453 88,037
Unamortized debt issuance costs (633) (735)
Long term loan 91,820 87,302
============ ============
As part of the acquisition of Aegerion on September 24, 2019,
Aegerion entered into a new U.S. dollar denominated US$81,021,000
secured term loan debt facility ("Term Loan") with various lenders.
The Term Loan is made up of a US$54,469,000 loan that was in place
prior to the acquisition which was refinanced as part of the
acquisition and a US$26,552,000 additional loan that was drawn down
on September 24, 2019. The Term Loan has a five-year term from the
date of the draw down, September 24, 2019 and matures on September
24, 2024. Under the Term Loan, interest will be payable at the
option of the Group at the rate of 11% per annum paid in cash on a
quarterly basis or at a rate of 6.5% paid in cash plus 6.5% paid in
kind that will be paid when the principal is repaid, which rolls up
and is included in the principal balance outstanding, on a
quarterly basis. Unpaid accrued interest of US$1,511,000 as at
September 30, 2021 is recognized in current liabilities with trade
and other payables (December 31, 2020: $1,439,000). The Term Loan
may be prepaid, in whole or in part, by Aegerion at any time
subject to payment of an exit fee, which depending on the stage of
the loan term, ranges from 5.00% to 0.00% of the principal then
outstanding on the Term Loan.
In connection with the Term Loan, the Group incurred
approximately US$870,000 of debt issuance costs, which primarily
consisted of underwriting, legal and other professional fees. These
costs are being amortized over the expected life of the loan using
the effective interest method.
The Term Loan is guaranteed by Amryt and certain subsidiaries of
the Group. In connection with the loan agreement, fixed and
floating charges have been placed on property and undertakings of
Amryt and certain subsidiaries of the Group.
The Term Loan agreement includes affirmative and negative
covenants, including prohibitions on the incurrence of additional
indebtedness, granting of liens, certain asset dispositions,
investments, and restricted payments, in each case, subject to
certain exceptions set forth in the Loan Agreement. The Term Loan
agreement also includes customary events of default for a
transaction of this type and includes (i) a cross-default to the
occurrence of any event of default under material indebtedness of
Aegerion and certain subsidiaries of the Group and Amryt, including
the convertible notes, and (ii) Amryt or any of its subsidiaries
being subject to bankruptcy or other insolvency proceedings. Upon
the occurrence of an event of default, the lenders may declare all
of the outstanding Term Loan and other obligations under the Term
Loan agreement to be immediately due and payable and exercise all
rights and remedies available to the lenders under the Term Loan
agreement and related documentation. There have been no events of
default or breaches of the covenants occurring for the three and
nine months ended September 30, 2021 (December 31, 2020: no
events).
13. Convertible notes
Total
-------
US$'000
At January 1, 2020 96,856
Accreted interest 4,230
At December 31, 2020 (audited) 101,086
Accreted interest 3,480
At September 30, 2021 (unaudited) 104,566
As part of the Aegerion acquisition, Aegerion issued convertible
notes with an aggregate principal amount of US$125,000,000 to
Aegerion creditors.
The convertible notes are senior unsecured obligations and bear
interest at a rate of 5.0% per year, payable semi-annually in
arrears on April 1 and October 1 of each year, beginning on April
1, 2020. The convertible notes will mature on April 1, 2025, unless
earlier repurchased or converted.
The convertible notes are convertible into Amryt's ordinary
shares at a conversion rate of 386.75 ordinary shares per US$1,000
principal amount of the convertible notes. If the holders elect to
convert the convertible notes, Aegerion can settle the conversion
of the convertible notes through payment or delivery of cash,
common shares, or a combination of cash and common shares, at its
discretion. As a result of the conversion feature in the
convertible notes, the convertible notes were assessed to have both
a debt and an equity component. The two components were assessed
separately and classified as a financial liability and equity
instrument. The financial liability component was measured at fair
value based on the discounted cash flows expected over the expected
term of the notes using a discount rate based on a market interest
rate that a similar debt instrument without a conversion feature
would be subject to. Refer to Note 11, Share capital and reserves,
for further details on the equity component of the convertible
notes.
From September 24, 2019 until the close of business on the
second scheduled trading day immediately preceding the maturity
date, holders may convert all or any portion of their convertible
notes, in multiples of US$1,000 principal amount, at the option of
the holder.
The indenture does not contain any financial covenants or
restrict the Group's ability to repurchase securities, pay
dividends or make restricted payments in the event of a transaction
that substantially increases the Group's level of indebtedness in
certain circumstances.
The indenture contains customary terms and covenants and events
of default. If an event of default (other than certain events of
bankruptcy, insolvency or reorganization involving Aegerion, Amryt
and certain subsidiaries of the Group) occurs and is continuing,
the trustee by notice to Aegerion, or the holders of at least 25%
in principal amount of the outstanding convertible notes by written
notice to Aegerion and the trustee, may declare 100% of the
principal of and accrued and unpaid interest, if any, on all of the
convertible notes to be due and payable. Upon such a declaration of
acceleration, such principal and accrued and unpaid interest, if
any, will be due and payable immediately. Upon the occurrence of
certain events of bankruptcy, insolvency or reorganization
involving Aegerion, 100% of the principal and accrued and unpaid
interest, if any, on the convertible notes will become due and
payable automatically. Notwithstanding the foregoing, the indenture
provides that, upon Aegerion's election, and for up to 180 days,
the sole remedy for an event of default relating to certain
failures by Aegerion to comply with certain reporting covenants in
the indenture consists exclusively of the right to receive
additional interest on the convertible notes. There have been no
events of default or breaches of the covenants occurring for the
period ended September 30, 2021 (2020: no events).
14. Provisions and other liabilities
As at
September December 31,
30, 2021 2020
(unaudited) (audited)
------------
US$'000 US$'000
Non-current liabilities
Provisions and other liabilities -- 21,382
Leases due greater than 1 year 4,213 4,569
4,213 25,951
Current liabilities
Provisions and other liabilities 27,998 9,976
Leases due less than 1 year 1,529 963
29,527 10,939
Total provisions and other liabilities 33,740 36,890
Legal matters
Prior to the acquisition of Aegerion by Amryt, Aegerion entered
into settlement agreements with governmental entities including the
Department of Justice ("DOJ") and the FDA in connection with
Juxtapid investigations. The settlement agreements require Aegerion
to pay specified fines and engage in regulatory compliance efforts.
Subsequent to the acquisition, Aegerion made US$23,036,000 of
settlement payments, including interest. The settlements have been
paid in full with the last payment completed in Q1 2021. There is
no current liability recognized as at September 30, 2021 (December
31, 2020: US$3,976,000). There is no non-current liability at
September 30, 2021 (December 31, 2020: nil).
Other matters
The Group recognizes a liability for legal contingencies when it
believes that it is both probable that a liability has been
incurred and that it can reasonably estimate the amount of the
loss. The Group reviews these accruals and adjusts them to reflect
ongoing negotiations, settlements, rulings, advice of legal counsel
and other relevant information. To the extent new information is
obtained and the Group's views on the probable outcomes of claims,
suits, assessments, investigations or legal proceedings change,
changes in the Group's liability accrual would be recorded in the
period in which such determination is made. At September 30, 2021
the Group had recognized liabilities of US$6,000,000 in relation to
ongoing legal matters (December 31, 2020 US$6,000,000).
15. Fair value measurement and financial risk management
Categories of financial instruments
As at
September December 31,
30, 2021 2020
(unaudited) (audited)
------------
US$'000 US$'000
Financial assets (all at amortized cost):
Cash and cash equivalents 123,177 118,798
Trade receivables 37,458 33,057
Total financial assets 160,635 151,855
Financial liabilities:
At amortized cost
Trade payables and accrued expenses 123,095 89,300
Lease liabilities 5,742 5,532
Other liabilities 21,998 25,358
Convertible notes 104,566 101,086
Long term loan 91,820 87,302
Contingent value rights 66,932 61,417
At fair value
Contingent consideration 91,067 86,906
Total financial liabilities 505,220 456,901
Net (344,585) (305,046)
Financial instruments evaluated at fair value can be classified
according to the following valuation hierarchy, which reflects the
extent to which the fair value is observable:
-- Level 1: fair value evaluations using prices listed on active markets
(not adjusted) of identical assets or liabilities.
-- Level 2: fair value evaluations using input data for the asset or
liability that are either directly observable (as prices) or indirectly
observable (derived from prices), but which do not constitute listed
prices pursuant to Level 1.
-- Level 3: fair value evaluations using input data for the asset or
liability that are not based on observable market data (unobservable
input data).
The contingent consideration has been valued using Level 3. The
contingent consideration comprises:
-- Contingent consideration relating to the acquisition of Amryt GmbH (see
Note 5, Business combinations and asset acquisitions) that was measured
at US$91,067,000 as at September 30, 2021 (December 31, 2020:
US$86,906,000). The fair value comprises royalty payments which was
determined using probability weighted revenue forecasts and the fair
value of the milestones payments which was determined using probability
adjusted present values. It also included a revision to the discount rate
used, and revenue and costs forecasts have been amended to reflect
management's current expectations.
Impact of key unobservable input data
-- An increase of 10% in estimated revenue forecasts would result in an
increase to the fair value of US$6,370,000. A decrease would have the
opposite effect.
-- A 5% increase in the discount factor used would result in a decrease to
the fair value of US$13,979,000. A decrease of 5% would result in an
increase to the fair value of US$18,253,000.
-- A six-month delay in the launch date for Oleogel-S10 would result in a
decrease to the fair value of US$9,095,000.
16. Events after the reporting period
There were no significant events since the end of the reporting
period.
(END) Dow Jones Newswires
November 03, 2021 07:00 ET (11:00 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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