Aerie Pharmaceuticals has generated first quarter 2020 net revenues of $20.3 million, with net cash used in operating activities for the quarter ended March 31, 2020 on a U.S. GAAP basis totaled approximately $41.8 million, resulting in $264.7 million in cash and cash equivalents and investments as of March 31, 2020.
DURHAM, N.C.–(BUSINESS WIRE)–Aerie Pharmaceuticals, Inc. (NASDAQ:AERI), an ophthalmic pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with open-angle glaucoma, dry eye, retinal diseases and potentially other diseases of the eye, today reported financial results for the first quarter ended March 31, 2020 and provided a general business update, including the impact of the COVID-19 pandemic on company operations.
Aerie First Quarter Highlights
- The Aerie glaucoma franchise, including Rhopressa® (netarsudil ophthalmic solution) 0.02% and Rocklatan® (netarsudil and latanoprost ophthalmic solution) 0.02%/0.005%, generated first quarter 2020 net revenues of $20.3 million, equivalent to an average of $88 per bottle. Wholesaler shipments totaled 232,000 bottles during the first quarter of 2020 compared to 206,000 bottles shipped during the fourth quarter of 2019. The net revenue per bottle is lower than prior quarters reflecting higher penetration of Medicare Part D and other government-funded programs.
- Market access for Medicare Part D plans increased considerably effective May 1, 2020. Rhopressa® now has market access for 88 percent of lives covered under Medicare Part D plans, up from 75 percent previously. Rocklatan® currently has market access for 55 percent of Medicare Part D lives, up from 38 percent previously, and currently has an additional 15 percent of remaining Medicare Part D lives, which, while not yet covered on formulary, have affordable access through U.S. government funded Low Income Subsidy programs through which co-pays are less than $10 per month. Commercial coverage for Rhopressa® and Rocklatan® remain at 90 percent and 88 percent of covered lives, respectively.
- Aerie remains focused on its dry eye product candidate now named AR-15512 obtained through the December 2019 acquisition of Avizorex Pharma S.L. (Avizorex). Toxicology studies are underway as part of the evaluation of different concentrations of the product candidate, and Aerie plans to initiate a large Phase 2b study in late 2020.
- Aerie’s retina program continues to advance. The AR-1105 (dexamethasone steroid implant) Phase 2 clinical trial, which commenced in March 2019 for macular edema due to RVO (retinal vein occlusion), was fully enrolled ahead of schedule in October 2019 with a readout expected in the second half of 2020. The first-in-human clinical trial for AR-13503 (Rho kinase and Protein kinase C inhibitor implant) commenced in the third quarter of 2019 for neovascular age-related macular degeneration and DME (diabetic macular edema). Aerie currently expects to commence enrollment of the Phase 2 clinical trial in the second half of 2020, with a readout expected in 2021.
- Aerie held a meeting with the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) in April 2020 to discuss Phase 3 trial designs for Rhopressa®, while continuing to prepare for the trials. Aerie expects to initiate a Rhopressa® Phase 3 clinical trial in Japan, potentially commencing in the second half of 2020, along with exploring a collaboration with a potential partner in Japan to advance Aerie’s clinical development and ultimately commercialize Rhopressa® and Rocklatan® in Japan.
- Aerie received approval from the U.S. Food and Drug Administration (FDA) in January 2020 to produce Rocklatan® in Aerie’s Athlone, Ireland, manufacturing facility for commercial distribution in the U.S. market. The manufacturing plant began production of commercial supplies of Rocklatan® during the first quarter of 2020. Aerie also plans to file a Prior Approval Supplement with the FDA in second-quarter 2020 to obtain FDA approval to manufacture Rhopressa® in Athlone for commercial distribution in the U.S. market.
- The European Commission granted a centralised marketing authorisation for Rhokiinsa® (netarsudil ophthalmic solution) 0.02% in November 2019. The European Medicines Agency (EMA) accepted for review the marketing authorisation application (MAA) for Roclanda® (netarsudil and latanoprost ophthalmic solution) 0.02%/0.005% (marketed as Rocklatan® in the U.S.) in December 2019. An opinion from the EMA’s Committee for Medicinal Products for Human Use on the MAA for Roclanda® is expected in the fourth quarter of 2020. Topline data from the Rocklatan® Mercury 3 Phase 3 clinical trial in Europe is expected potentially in late 2020, the results of which will help determine commercial prospects in the region.
Impact of the COVID-19 Pandemic
- In December 2019, there was an outbreak of a new strain of coronavirus (COVID-19) and on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation due to “shelter-in-place” restrictions by various governments worldwide and created significant volatility and disruption of financial markets.
- While Aerie sales volumes increased in the first quarter of 2020 compared to the fourth quarter of 2019 for both Rhopressa® and Rocklatan®, total prescription volumes, as seen within the entire pharmaceutical market according to IQVIA data, has declined as the COVID-19 impact grew commencing in late March 2020. There has been a partial volume offset for Aerie due to an increasing proportion of prescriptions for 90-days’ supply, however, with many eye care professionals’ offices closed or operating with limited capacity, new prescription growth has slowed. Our sales force remains engaged with eye care professionals primarily through virtual means, and we are diligently managing our expenses including reducing travel and meeting expenses.
- Aerie does not yet know whether or how the progress of the COVID-19 pandemic will affect clinical operations or the timing of the approval by the EMA of the MAA for Roclanda®.
- Aerie has observed no disruptions to date in its supply chain for production of Rhopressa® and Rocklatan®. Aerie believes it has approximately three years of starting materials and active pharmaceutical ingredient in inventory, and adequate supply of finished product on hand to support its commercial efforts for at least the next six months. Production of Rhopressa® and Rocklatan® is continuing.
2020 Guidance
- Considering the rapidly evolving status of the unprecedented COVID-19 situation and the uncertainty around its ultimate impact, Aerie announced on April 9, 2020 the withdrawal of its 2020 guidance for net revenues and net cash used in operations. Guidance will be updated when there is clarity going forward.
“First and foremost, we are focused on the health and safety of our employees and their families, along with our patients and eye care professionals as we endure the COVID-19 pandemic. I am personally very grateful to our employees for their diligence in executing their responsibilities in a largely virtual environment. 2020 was off to a strong start for Aerie, but the momentum was unfortunately cut short by the COVID-19 impact late in the first quarter and continuing to the second quarter of this year. While we have seen a reduction in total prescriptions and particularly in new prescriptions, our average weekly sales-out to pharmacies was approximately 17,000 bottles in April, consistent with volumes experienced during the fourth quarter of 2019. It is difficult to project if this trend will continue but we appear to be experiencing a lower level of weekly decreases in the last few weeks than in early April. Further, we are delighted to have gained significant additional Medicare Part D coverage effective May 1 and, certainly once in a ‘normal’ environment, this should bode very well for our future volume growth,” said Vicente Anido, Jr., Ph.D., Chairman and Chief Executive Officer.
“Our clinical programs and plans, both in the United States and abroad remain largely on track, and we remain well-funded with approximately $265 million of cash and investments as of March 31, 2020.”
First Quarter 2020 Financial Results
As of March 31, 2020, Aerie had cash and cash equivalents and investments of $264.7 million. For the first quarter ended March 31, 2020, Aerie reported net product revenues of $20.3 million related to the combined sales of Rhopressa®, which was launched in the United States in April 2018, and Rocklatan®, which was launched in the United States in May 2019. Aerie reported a U.S. GAAP net loss of $49.1 million, or $1.07 loss per share, for the first quarter of 2020, compared to a net loss of $48.0 million and $1.06 loss per share for the first quarter of 2019. The weighted average number of shares outstanding utilized in the calculation of net loss per share was 45.8 million and 45.3 million for the first quarters of 2020 and 2019, respectively. Total shares outstanding as of March 31, 2020 were 46.5 million.
The $49.1 million net loss for the first quarter of 2020 is primarily comprised of $14.2 million of gross profit, including $6.1 million in cost of goods sold, and $58.2 million in total operating expenses, including $36.9 million in selling, general and administrative expenses, $2.1 million in pre-approval commercial manufacturing expenses and $19.2 million in research and development expenses. Excluding $10.5 million of stock-based compensation expense, for the first quarter of 2020 adjusted cost of goods sold was $5.6 million and adjusted total operating expenses were $48.2 million, with adjusted selling, general and administrative expenses of $30.0 million, adjusted pre-approval commercial manufacturing expenses of $1.8 million and adjusted research and development expenses of $16.3 million. Total adjusted net loss for the first quarter of 2020 was $38.6 million, and adjusted net loss per share was $0.84.
The $48.0 million net loss for the first quarter of 2019 was primarily comprised of $58.6 million in total operating expenses, including $36.3 million in selling, general and administrative expenses, $4.5 million in pre-approval commercial manufacturing expenses and $17.9 million in research and development expenses. Excluding $12.6 million of stock-based compensation expense, adjusted total operating expenses for the first quarter of 2019 were $46.0 million, with adjusted selling, general and administrative expenses of $27.2 million, adjusted pre-approval commercial manufacturing expenses of $3.6 million and adjusted research and development expenses of $15.2 million. Total adjusted net loss for the first quarter of 2019 was $35.3 million, and adjusted net loss per share was $0.78.