WOODCLIFF LAKE, N.J.--(BUSINESS WIRE)--Eagle Pharmaceuticals, Inc. (Nasdaq:EGRX) today announced its financial results for the three months and full year ended December 31, 2018. Highlights of, and subsequent to, the fourth quarter of 2018 include:

Business and Recent Highlights:

• Commenced enrollment in a study to evaluate the neuroprotective effects of RYANODEX® (dantrolene sodium) in collaboration with the United States Army Medical Research Institute of Chemical Defense (“USAMRICD”), the nation's leading science and technology laboratory in the area of medical chemical countermeasures research and development;
• Announced positive results of pre-clinical study conducted to evaluate effects of RYANODEX in Acute Radiation Syndrome (“ARS”);
• On February 20, 2019, the FDA issued a decision in favor of Eagle regarding the scope of BENDEKA’s Orphan Drug Exclusivity (“ODE”), further protecting the longevity of the BENDEKA franchise; and
• Executed a $50.0 million accelerated share repurchase (“ASR”) as part of our $150.0 million share repurchase program (the “Share Repurchase Program”).

Financial Highlights:

Fourth Quarter 2018

• Total revenue for the fourth quarter of 2018 was $56.1 million, compared to $46.8 million in the fourth quarter of 2017;
• Q4 2018 bendamustine hydrochloride 500ml solution (“Big Bag” or “BELRAPZO”) product sales were $6.8 million; in February of 2019, the Company achieved peak market share of 10%, according to IQVIA Holdings Inc.;
• Q4 2018 RYANODEX product sales were $5.1 million, up 10% compared to Q4 2017;
• Q4 2018 net income was $12.6 million, or $0.88 per basic and $0.86 per diluted share, compared to net income of $9.1 million, or $0.61 per basic and $0.58 per diluted share in Q4 2017;
• Q4 2018 adjusted non-GAAP net income was $17.7 million, or $1.23 per basic and $1.20 per diluted share, compared to adjusted non-GAAP net income of $15.6 million, or $1.05 per basic and $1.00 per diluted share in Q4 2017; and
• Q4 2018, Eagle executed a $50.0 million ASR of common stock as part of the Share Repurchase Program.

Full Year 2018

• Total revenue for the twelve months ended December 31, 2018 was $213.3 million, compared to $236.7 million in 2017 including $37.5 million in milestone payments for BENDEKA, reflecting revenue growth of 7% when excluding milestone payments;
• 2018 net income was $31.9 million, or $2.16 per basic and $2.09 per diluted share, compared to net income of $51.9 million, or $3.44 per basic and $3.27 per diluted share in 2017;
• 2018 adjusted non-GAAP net income was $59.2 million, or $4.01 per basic and $3.87 per diluted share, compared to adjusted non-GAAP net income of $69.0 million, or $4.57 per basic and $4.34 per diluted share in 2017;
• From August 2016 through December 31, 2018, Eagle has repurchased $154.0 million of its common stock; and
• Cash and cash equivalents were $78.8 million, accounts receivable was $66.5 million, and debt was $45.0 million as of December 31, 2018.

“We had another outstanding quarter, nearly doubling our product sales in Q4 2018 compared to Q4 2017 and generating 20% growth in total quarterly revenue year over year. We were able to deliver substantial cash flow throughout the year, repurchase $78 million of our own shares, and maintain a very strong balance sheet with which to execute our development and commercial activities,” stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.

“There are multiple exciting opportunities we plan to advance in 2019. The study initiated with the U.S. Military to evaluate RYANODEX in the treatment of nerve agent exposure is progressing nicely. Three of the six animal cohorts have now been challenged. The results of our pre-clinical study to evaluate the effect of RYANODEX in treating ARS are encouraging, and we are continuing our dialogue with the FDA regarding a path forward for EHS. As the year unfolds, we look forward to gaining greater clarity regarding our pipeline, exploring new opportunities with existing products, and delivering a very efficient business model that provides the cash necessary to execute our development, commercial activities, and potential licensing opportunities,” concluded Tarriff.

Fourth Quarter 2018 Financial Results

Total revenue for the three months ended December 31, 2018 was $56.1 million, as compared to $46.8 million for the three months ended December 31, 2017. Royalty revenue was $35.7 million, compared to $36.4 million in the fourth quarter of 2017. BENDEKA royalties were $31.9 million, compared to $34.7 million in the fourth quarter of 2017. A summary of total revenue is outlined below:

Three Months Ended December 31, 2018
Twelve Months Ended December 31, 2018
2018	2017
(unaudited)	(unaudited)
Revenue (in thousands):
Product sales	$70,385	$45,327
Royalty revenue	142,927	153,880
License and other income	—	37,500
Total revenue	$213,312	$236,707

The increase in product sales in 2018 was driven primarily by the launch of Big Bag, as well as continued growth in RYANODEX revenue. Royalty revenue totaled $142.9 million in 2018 compared to $153.9 million in 2017. In 2018, Eagle did not earn any license and other income. In 2017, Eagle earned certain contractual milestones in connection with the Company’s BENDEKA licensing agreement with Teva, as well as an upfront payment associated with the SymBio collaboration covering Japanese rights for bendamustine hydrochloride ready-to-dilute and rapid infusion injection products.Gross margin was 71% in 2018, as compared to 76% in 2017. The year over year compression in gross margin resulted from the introduction of Big Bag revenue was partly offset by an expansion in RYANODEX gross margin.R&D expense increased to $44.4 million in 2018, compared to $32.6 million in 2017, reflecting the cost of the fulvestrant trial as well as the vasopressin analytical work. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense in 2018 was $37.8 million.

SG&A expenses decreased by $10.9 million to $60.5 million in 2018, compared to $71.4 million in 2017. In 2017, SG&A included increased marketing expense related to exertional heat stroke (“EHS”) and the contract sales force agreement with Spectrum. The elimination of those expenses in 2018 was partly offset by an increase in external legal expenses. Excluding stock-based compensation and other non-cash and non-recurring items, SG&A expense in 2018 was $43.1 million.

Net income for the year ended December 31, 2018 was $31.9 million or $2.16 per basic and $2.09 per diluted share as compared to net income of $51.9 million or $3.44 per basic and $3.27 per diluted share for the year ended December 31, 2017, as a result of the factors discussed above.

Adjusted non-GAAP net income for 2018 was $59.2 million, or $4.01 per basic and $3.87 per diluted share, compared to adjusted non-GAAP net income of $69.0 million, or $4.57 per basic and $4.34 per diluted share in 2017.

Liquidity

As of December 31, 2018, the Company had $78.8 million in cash and cash equivalents and $66.5 million in net accounts receivable, $41.8 million of which was due from Teva Pharmaceutical Industries Ltd. The Company had $45.0 million in outstanding debt.

In the fourth quarter of 2018, we purchased $50.0 million of Eagle’s common stock as part of our $150.0 million Share Repurchase Program. From August 2016 through December 31, 2018, we have repurchased $154.0 million of our common stock, including the $50.0 million ASR. As disclosed on October 30, 2018, the Company’s Board of Directors retired the prior share repurchase programs and approved the new $150.0 million Share Repurchase Program (which includes the ASR).

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 main 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.