WOODCLIFF LAKE, N.J.--(BUSINESS WIRE)--Eagle Pharmaceuticals, Inc. (Nasdaq:EGRX) today announced its financial results for the three- and six-months ended June 30, 2016. Highlights of and subsequent to the second quarter of 2016 include:

Business Highlights:

• Bendeka® total market share rose to 80%, as of Aug 5, 2016;
• US Food and Drug Administration (“FDA”) determined that no additional human safety and efficacy data is required for the submission of Eagle’s New Drug Application (“NDA”) for Ryanodex® for the treatment of exertional heat stroke (“EHS”), further confirming that a hybrid development program comprised of clinical data from EHS patients and positive preclinical data from animal studies constitutes an adequate regulatory pathway for the NDA submission;
• Eagle reduced royalty payments owed for Ryanodex from 15% to 3% for a purchase price of $15 million in cash;
• Discussions with the FDA regarding the design of a human study for RTU bivalirudin are underway;
• Michael Graves appointed Chairman of the Board of Directors, Douglas Braunstein and Robert Glenning joined the board; and,
• Eagle’s Board of Directors authorized a share repurchase program of up to $75 million in Eagle stock.

Financial Highlights:

• Total revenue was $40.9 million during the second quarter of 2016 compared to $6.0 million for the three months ended June 30, 2015;
• Product sales increased to $9.6 million during the second quarter of 2016 compared to $3.7 million for the three months ended June 30, 2015;
• Sales of Ryanodex grew 81% quarter over quarter to $3.4 million during the second quarter of 2016;
• Net income was $13.1 million, or $0.84 per basic and $0.80 per diluted share, compared to a net loss of $8.2 million, or $(0.53) per basic and diluted share, for the three months ended June 30, 2016 and 2015, respectively; and,
• Cash and cash equivalents were $75.6 million and accounts receivable were $52.0 million as of June 30, 2016.

“During the quarter, we gained clarity on Bendeka and its associated cash flows through 2019. And, we are confident in our ability to continue to drive growth beyond 2019. Our meeting with the FDA provides us with an agreement for Ryanodex expansion. And, our Company’s cash position allows us to optimize the deployment of capital for our shareholders, a process we have already begun. With our new board in place, we are well positioned to take full advantage of the opportunities before us,” said Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

“Bendeka now commands 80% of a branded market and will be an important earnings driver through at least 2019. With Eagle’s right to launch our bendamustine 500mL formulation at any time and the right, under certain circumstances, to take back Bendeka in 2019, we believe our bendamustine franchise will be a solid contributor to Eagle’s growth for many years to come,” added Tarriff.

“Likewise, we are excited about the potential of our pipeline to drive value beyond 2020. We expect the Ryanodex portfolio to be a key contributor to our growth. The FDA’s determination that the pivotal study we conducted on EHS patients combined with the clinical animal studies we are working on now will be sufficient to complete our NDA submission means that, if approved, Ryanodex for EHS could be on the market as early as next year, assuming the animal studies are successful. In parallel, we continue to explore additional indications for Ryanodex in the treatment of Ecstasy and methamphetamine intoxication, and are advancing multiple other product candidates through the development process, each of which could open up significant new markets for us,” added Tarriff.

“As Eagle transitioned to a fully commercial company, we were able to grow our cash position significantly without incurring any debt. We are committed to deploying our excess capital prudently. As such, we signed an agreement that reduces our royalty obligations for Ryanodex. Eagle’s board has also approved the purchase of up to $75 million in Eagle’s stock. We will continue to evaluate opportunistic ways to invest our capital, reflecting our commitment to maximizing the value of our formulations and ensuring the long term earnings potential of the business,” concluded Tarriff.

Product sales increased $5.9 million to $9.6 million driven by increases in Bendeka, Non-Alcohol Docetaxel Injection, Argatroban, and Ryanodex net product sales, offset by a decrease in net product sales of diclofenac-misoprostol. Royalty income increased $29.0 million to $31.3 million, as a result of the launch of Bendeka in January 2016.

Cost of revenue increased by $8.1 million to $11.5 million in the three months ended June 30, 2016 from $3.3 million in the three months ended June 30, 2015. This $8.1 million net increase resulted from $0.5 million in cost of revenue for Non-Alcohol Docetaxel Injection, an increase of $7.0 million related to the cost of Bendeka product sales, an increase of $0.5 million in cost of revenue for Ryanodex, and an increase of $0.1 million in cost of revenue for EP-1101.

Research and development expenses decreased by $2.2 million to $3.7 million in the three months ended June 30, 2016, compared to $5.9 million in the prior year quarter. The decrease is due to a decrease in spending on bivalirudin and cost reimbursement for Bendeka, offset by an increase in spending for the successful completion of the clinical treatment portion of the safety and efficacy study of Ryanodex for exertional heatstroke, an increase in project spending for pemetrexed, and investment in other pipeline projects.

SG&A expenses increased $6.9 million to $12.1 million in the second quarter of 2016 compared to $5.1 million in the three months ended June 30, 2015. Personnel-related expenses accounted for the bulk of the $7.0 million increase and were due to overall expansion of the business.

Net income for the second quarter was $13.1 million, or $0.84 per basic share and $0.80 per diluted share, compared to a net loss of $8.2 million, or $0.53 per basic and diluted share in the three months ended June 30, 2015, as a result of the factors discussed above.

Liquidity

As of June 30, 2016, the Company had $75.6 million in cash and cash equivalents; $52.0 million in receivables, with approximately $40 million due from Teva Pharmaceutical Industries Ltd. (“Teva”); $202.7 million in additional paid in capital; $107.8 million in stockholders’ equity; and no debt.

Events Subsequent to the End of the Second Quarter

Eagle purchased the majority of the royalty obligation on Ryanodex net sales, reducing its obligation from 15% to 3% in exchange for $15 million in cash.

Changes in the structure of Eagle’s shareholders’ stock holdings, which occurred in the second quarter of 2016 may trigger how Eagle utilizes accumulated Net Operating Losses (“NOL”). Eagle is evaluating whether or not these changes have, or soon will, trigger a technical change of control, as it is defined in Section 382 of the Internal Revenue Code. Upon a Section 382 change of control, the Company is required to amortize NOL utilization. How the Company utilizes accumulated NOL of approximately $99 million may be impacted by the outcome of this process. Eagle’s preliminary assessment is that the Company is close to a technical change of control. We estimate that should the Company be required to amortize NOL, there will be a cash impact of approximately $10 million incurred over the next few quarters.

On August 2, 2016, the Board of Directors has approved a share repurchase program, under which Eagle may repurchase up to $75 million of its outstanding common stock. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. Repurchases under the program will be made from time to time on the open market at prevailing market prices or in privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, as determined by management and the Board of Directors in their discretion and subject to market conditions, applicable legal requirements, and other relevant factors.

About Eagle Pharmaceuticals, Inc.

Eagle is a specialty pharmaceutical company focused on developing and commercializing injectable products that address the shortcomings, as identified by physicians, pharmacists and other stakeholders, of existing commercially successful injectable products. Eagle’s strategy is to utilize the FDA's 505(b)(2) regulatory pathway. Additional information is available on the company’s website at www.eagleus.com.