UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
____________________________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 2018
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OPTINOSE, INC.
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE | 001-38241 | 42-1771610 |
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File No.) | (I.R.S. Employer Identification No.) |
1020 Stony Hill Road, Suite 300
Yardley, Pennsylvania 19067
(Address of principal executive offices and zip code)
(267) 364-3500
(Registrant’s telephone number, including area code)
(Former name or former address, if changed from last report)
____________________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
q | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
q | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
q | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
q | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-14(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
ý | Emerging growth company |
ý | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 2.02 Results of Operations and Financial Condition.
On May 14, 2018, OptiNose, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2018. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
Corporate Presentation
On May 14, 2018, the Company presented an updated Corporate Presentation during its financial results and corporate update call. A copy of the presentation is furnished hereto as Exhibit 99.2 and is incorporated by reference herein.
* * *
The information included in Item 2.02 (including Exhibit 99.1) and Item 7.01 (including Exhibit 99.2) of this Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any Company filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1 | ||
99.2 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
OptiNose, Inc. | ||
By: /s/ Keith A. Goldan | ||
Keith A. Goldan | ||
Chief Financial Officer | ||
Date: May 14, 2018
Exhibit 99.1
Optinose Reports First Quarter 2018 Financial Results
and Recent Operational Highlights
Optinose confirms retail pharmacy availability of XHANCE commenced in early April
Company reports more than 1,300 physicians have prescribed XHANCE through the Xperience program
YARDLEY, Pa., May 14, 2018 Optinose (NASDAQ:OPTN), a pharmaceutical company focused on patients treated by ear, nose and throat (ENT) and allergy specialists, today reported financial results for the quarter ended March 31, 2018, and provided recent operational highlights.
“I am pleased to report that XHANCE is now available in retail pharmacies following our commercial launch in early April,” commented CEO Peter Miller. “We have achieved our initial objective with respect to creating brand awareness, we are making good progress with payer coverage, and we are encouraged by the early results for trial and adoption by physicians and the patients they treat. While we are pleased with the progress of our launch to date, we know that long-term success of XHANCE depends on successfully meeting the challenges ahead. Our team is focused on increasing the breadth and depth of prescribers, retaining patients beyond their initial trial phase, increasing the number of patients with "low-hassle" access to XHANCE, and on initiating a clinical program in the fourth quarter of 2018 in pursuit of an additional indication for XHANCE for the treatment of chronic sinusitis.”
First Quarter and Recent Highlights
Commercialization of XHANCETM (fluticasone propionate) nasal spray 93mcg
Brand Awareness
The Company believes that a high level of product awareness will facilitate adoption. Therefore, multiple product awareness initiatives were undertaken in the months following product approval with multi-channel efforts directed at the ENT and allergy specialty audience. Based on our recent market research, aided brand awareness amongst ENT and allergy physicians is 87 percent, which achieves the Company's objective of 85 percent awareness during the launch phase.
Payer Coverage
Recognizing that insurance coverage is important to product acceptance and uptake, the Company has engaged with key pharmacy benefit managers (PBMs) and health plans estimated to represent over 80 percent of U.S. adult commercial lives. Based on currently available third-party data and our internal analyses, the Company believes approximately 74 percent of commercial lives are in a plan in which XHANCE is covered in a Tier 3 formulary position and approximately 61 percent of commercial lives are in a plan that covers XHANCE in a Tier 3 formulary position that is either unrestricted or requires a single step edit. Coverage includes commercial lives represented by two of the three largest PBMs in the U.S. Where permissible, the Company has implemented co-pay assistance and other patient affordability programs to further support patient access.
Sales Force
The Company has engaged approximately 80 sales personnel (through a contract sales organization) who have been trained on XHANCE and have begun interactions with targeted ENT and allergy specialists. These territory managers are deployed primarily in regions where commercial market access is expected to meet or exceed the Company’s launch target of 65 percent. The Company anticipates its launch efforts will benefit from active transitions between previously deployed clinical nurse educators and new territory managers. The Company is prepared to flexibly expand the number of territory managers based on market access and experience in the marketplace.
XHANCE Xperience
In March 2018, Optinose introduced an innovative launch program, the XHANCE Xperience program, offering
physicians and their patients an opportunity to gain initial experience with XHANCE. Physicians can enroll eligible patients in this program, and patients will receive up to two XHANCE prescriptions at no cost to them ($0 co-pay) while physicians will receive feedback on early patient responses to treatment. The Company believes this program will accelerate the ability of physicians to acquire positive patient treatment experiences and therefore improve demand for XHANCE during the early phases of product launch. The program launched on March 5, 2018, and as of May 4, 2018 more than 1,300 unique physicians have prescribed XHANCE and approximately 5,200 units have been dispensed to patients.
Additional Highlights
First Quarter 2018 Financial Results
Revenue
The Company generated $0.9 million in net revenue through the sales of XHANCE in the three-month period ended March 31, 2018. A large majority of the revenue corresponded with the stocking of the retail distribution channel, with a portion of the revenue related to XHANCE sales through the Xperience program.
Operating expenses and net loss
For the three-month period ended March 31, 2018, research and development expenses were $1.7 million and selling, general and administrative expenses totaled $28.0 million. Net loss for the period was $30.6 million, or $0.81 per share.
Cash
The Company had cash and cash equivalents of $209.8 million as of March 31, 2018.
Corporate Guidance
Research and development
In order to support a meeting planned for the next few months, Optinose has submitted questions and key elements of a draft protocol for a planned clinical trial program to the U.S. Food and Drug Administration (FDA). This program is planned in pursuit of the additional indication for XHANCE for "treatment of chronic sinusitis." Pending FDA feedback, the Company expects to initiate the clinical program in the fourth quarter of 2018.
Operating Expenses
The Company believes that total operating expenses (selling, general & administrative expenses and research & development expenses) for 2018 will be in the range of $119 - $125 million.
Financial
The Company believes its current cash and cash equivalents are sufficient to fund its operations and debt service obligations through the end of 2019.
Company to Host Conference Call
Members of the Company’s leadership team will host a conference call and presentation to discuss financial results and corporate updates beginning at 8:00 a.m. Eastern Time today.
To participate on the conference call, please dial (866) 916-4761 from the U.S. or +1 (409) 216-6496 from outside the U.S. In addition, following the completion of the call, a telephone replay will be accessible until May 21, 2018 by dialing (855) 859-2056 from the U.S. or +1 (404) 537-3406 from outside the U.S. and entering conference ID # 6968158. A simultaneous webcast of the call and presentation can be accessed by visiting the Investors section of Optinose’s website at www.optinose.com. In addition, a replay of the webcast will be available on the Company website for 60 days following the event.
OptiNose, Inc. | |||||||||
Condensed Consolidated Statement of Operations | |||||||||
(in thousands, except share and per share data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2018 | 2017 | ||||||||
Net product revenues | $ | 865 | $ | — | |||||
Cost of product sales | 200 | — | |||||||
Gross margin | 665 | — | |||||||
Operating expenses: | |||||||||
Research and development | 1,701 | 4,230 | |||||||
Selling, general and administrative | 28,011 | 3,073 | |||||||
Total operating expenses | 29,712 | 7,303 | |||||||
Loss from operations | (29,047 | ) | (7,303 | ) | |||||
Other expense | 1,525 | 772 | |||||||
Net loss | $ | (30,572 | ) | $ | (8,075 | ) | |||
Deemed dividend | — | 3,067 | |||||||
Accretion to redemption value | — | 528 | |||||||
Net loss attributable to common stockholders | $ | (30,572 | ) | $ | (11,670 | ) | |||
Net loss per share of common stock | |||||||||
basic | $ | (0.81 | ) | $ | (2.87 | ) | |||
diluted | $ | (0.81 | ) | $ | (2.87 | ) | |||
Weighted average common shares outstanding | |||||||||
basic | 37,849,199 | 4,067,717 | |||||||
diluted | 37,849,199 | 4,067,717 | |||||||
OptiNose, Inc. | ||||||||
Condensed Consolidated Balance Sheet Data | ||||||||
(in thousands) | ||||||||
March 31, | December 31, | |||||||
2018 | 2017 | |||||||
(Unaudited) | ||||||||
Cash and cash equivalents | $ | 209,771 | $ | 234,854 | ||||
Other assets | 10,791 | 6,282 | ||||||
Total assets | $ | 220,562 | $ | 241,136 | ||||
Total current liabilities | $ | 22,488 | $ | 14,777 | ||||
Long-term debt, net | 71,963 | 71,863 | ||||||
Total stockholders' equity | 126,111 | 154,496 | ||||||
Total liabilities and stockholders' equity | $ | 220,562 | $ | 241,136 | ||||
About Optinose
Optinose is a global specialty pharmaceutical company focused on serving the needs of patients cared for by ear, nose and throat (ENT) and allergy specialists. Optinose has offices in the U.S., the U.K. and Norway. To learn more, please visit www.optinose.com or follow us on Twitter and LinkedIn.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements that are not historical facts are hereby identified as forward-looking statements for this purpose and include, among others, statements relating to the initiation and timing of a clinical program of XHANCE for chronic sinusitis; projected Company operating expenses for 2018; the adequacy of the Company's current cash and cash equivalents to fund operations and debt service obligations through the end of 2019; the potential benefits of XHANCE and the Xperience Program; and other statements regarding the Company's future operations, financial performance, financial position, prospects, objectives and other future events. Forward-looking statements are based upon management’s current expectations and assumptions and are subject to a number of risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others: the Company’s ability to successfully commercialize XHANCE; physician and patient acceptance of XHANCE; the Company’s ability to obtain adequate third-party reimbursement for XHANCE (market access); our ability to successfully commercialize XHANCE without the support provided by the Xperience program; market opportunities for XHANCE may be smaller than expected; uncertainties and delays relating to the initiation, enrollment and completion of clinical trials; unanticipated costs; and the risks, uncertainties and other factors discussed under the caption "Item 1A. Risk Factors" and elsewhere in our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission - which are available at www.sec.gov. As a result, you are cautioned not to place undue reliance on any forward-looking statements. Any forward-looking statements made in this press release speak only as of the date of this press release, and we undertake no obligation to update such forward-looking statements, whether as a result of new information, future developments or otherwise.
Optinose Investor Contact
Jonathan Neely
jonathan.neely@optinose.com
267.521.0531
Optinose Media Contact
Kate Traynor, Sloane & Company
ktraynor@sloanepr.com
212.446.1871
Exhibit 99.2 Building a Leading ENT / Allergy Specialty Company First Quarter 2018 Update May 14, 2018
Forward Looking Statements This presentation and our accompanying remarks contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements that are not historical facts are hereby identified as forward-looking statements for this purpose and include, among others, statements relating to: potential benefits of XHANCETM and the Xperience program; market access objectives; market opportunities; commercial strategies; the initiation and timing of clinical trials for chronic sinusitis; and other statements regarding our future operations, financial performance, prospects, intentions, objectives and other future events. Forward-looking statements are based upon management’s current expectations and assumptions and are subject to a number of risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others: physician and patient acceptance of XHANCE; our ability to obtain adequate third-party reimbursement for XHANCE (market access); our ability to successfully commercialize XHANCE without the support provided by the Xperience program; uncertainties and delays relating to the initiation, completion and results of clinical trials; market opportunities for XHANCE may be smaller than we believe; and the risks, uncertainties and other factors discussed in the “Risk Factors” section and elsewhere in our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission – which are available at http://www.sec.gov. As a result, you are cautioned not to place undue reliance on any forward- looking statements. Any forward-looking statements made in this presentation speak only as of the date of this presentation, and we undertake no obligation to update such forward-looking statements, whether as a result of new information, future developments or otherwise. This presentation and our accompanying remarks also contain estimates, projections, market research and other data concerning our industry, markets for certain diseases and XHANCE. Information that is based on estimates, projections, market research or similar methodologies is inherently subject to uncertainties and actual events and circumstances may differ materially from events and circumstances reflected in this information. You are cautioned not to give undue weight to such information. 2
Recent Key Accomplishments Retail Launch Aided Awareness April 2, 2018 87% within ENT / Allergy Specialty* Commercial 74% Lives Covered Total Trialists (61% Tier 3 Single Step or better)* 800 700 600 500 Encouraging 400 Submitted CS Physician Adoption 300 trial design to 200 in ENT / Allergy 100 FDA 0 Continued to Build Capabilities to Support a Commercial Stage Company 3 * Based on quantitative market research, third party syndicated data and/or internal analyses
Our Research on Over 300 Products Suggests Successful Launches are Driven by Four Key Factors Attractive Market…with High Unmet Need Importantly Differentiated Product Awareness / Execution Market Access 4
CRS is an Attractive Market…With High Unmet Need 30 Million High Burden US Adults suffer from CRS Disease persists for many years and up to 10 million • of them have nasal • Significant quality of life impact polyps (comparable to CHF, COPD, Angina) 9.75 Million CRS patients seek Recognized Unmet Need physician care annually 3.5 Million • 80% of patients are frustrated with CRS patients treated by lack of symptom relief with prior ENT/Allergy specialists intranasal steroids (INS) • 75% of physicians believe INS nasal 1.2 NP patients treated by sprays do not work well because they Million ENT/Allergy specialists do not sufficiently reach site of inflammation Source: Palmer J et al . A cross-sectional population-based survey of the prevalence, disease burden, and characteristics of the US adult population with symptoms of 5 chronic rhinosinusitis (CRS). Poster session presented at: 62nd Annual Meeting of the American Rhinologic Society; September 16-17, 2016; San Diego, CA Optinose Market Research. Data on file.
Perceived Differentiation of XHANCE on Key Choice Drivers Translates into High Intention to Prescribe XHANCE is Perceived as Physician Stated Interest Differentiated on Key to Prescribe* Choice Drivers High Physician Interest in Prescribing is Reported After Presenting Product Profile (With Only Nasal Polyp Indication) . Improvement in nasal blockage / 90% congestion as early as week 4 80% 70% . Elimination of polyps at week 24 60% 50% 40% . Improvement in sense of smell / 30% taste 20% Likelihoodto Prescribe 10% 0% . Overall Patient Satisfaction Allergists ENTs PCPs N=200 N=202 N=302 Product Profile with Product Profile with NP Indication NP and CS Indications N=200 (100 ENTs and 100 Allergists) * Percent of HCPs stating that they will definitely or probably prescribe a product profile similar to XHANCE 6
Multi-Channel Integrated Marketing Program Increased Aided Awareness to 87% Awareness & Execution 87% . Digital and Non-Personal Awareness campaign 73% implemented 9/17/2017 65% . Clinical Nurse Educators deployed 11/18/2017 . Xhance Xperience program introduced in early March 28% . Approximately 80 Territory Managers deployed on March 5th . TMs have reached 54% of target Physicians with an average August December February April frequency of 3.1 as of May 4 Digital & Non Personal Sales Force Promotion and Clinical Nurse Educators 7
XHANCE has Good Early Launch Market Access XHANCE Overall Access: April 2018 • Nationally, we believe 74% of commercial lives are in a plan where XHANCE is covered. 26% • We believe new drugs that launch at approval typically have 74% only 40% of commercial lives covered and 60% of commercial lives blocked or not covered. Access Key • XHANCE is available to patients NDC Blocked / Not Covered through multiple payers that Covered (Single step edit, double step edit, PA or better) normally place new-to-market restrictions on access. Source: Third party syndicated data and internal analyses 8
XHANCE National Market Access XHANCE Overall • We are focused on creating Access: April 2018 access for patients that minimizes hassle for prescribers and patients. 26% • XHANCE is on formulary for 65% 9% of commercial lives in a Tier 3 65% position requiring a previous trial of an INS or better. • Our goal is for 75% of Access Key commercial lives to have “limited NDC Blocked / Not Covered hassle” access to XHANCE by the Covered (Double step edit or PA to indication) end of 2018. Covered (Unrestricted, Single step edit, or PA to Prior INS) ) Source: Third party syndicated data and internal analyses 9
XHANCE Xperience Program - Initiated in Market on March 5th XPERIENCE . Innovative launch program, planned for March through June, offering physicians and patients an opportunity to gain initial experience with XHANCE . Designed to facilitate accelerated trial and adoption, and to help address “practice inertia” . Eligible patients receive up to two prescription fills of XHANCE at no cost to them ($0 co-pay) . Patients required to complete survey for second prescription fill . A mail-order pharmacy coordinates fulfillment 10
XHANCE Launch Accelerated by Xperience Cumulative Cumulative Units Dispensed Physician Trialists 1,500 6,000 As of May 4, 29% of 1,351 5,203 called physicians have 5,000 1,200 prescribed XHANCE 4,000 900 3,000 600 2,000 Average of 2 calls to 300 convert physician 1,000 to a trialist 0 0 XPERIENCE 11 Source: cumulative physician trialists and cumulative units dispensed based on mail-order pharmacy data
Encouraging Feedback From Xperience Program Survey Patient Responses Prior to Month 2 Refill (N=321) Patient Satisfaction 87% Experience Symptom 80% Improvement Prefer XHANCE 81% Recommend XHANCE 89% to a Friend Use without Difficulty 94% Note: in the same period that the 321 responses were received, 50 patients declined the opportunity to respond to the survey. 12
Market Dynamics, Product Characteristics and Execution to Date Provide a Strong Foundation for a Successful Launch Indicator/Objective Assessment Attractive Market…with High Unmet Need >80% Current Patients Dissatisfied with Existing Treatment >80% of patients frustrated with lack of symptom relief with their current INS >75% Physician Dissatisfaction with Current Treatments >75% of physicians agree, in part, that INS medications do not work because they do not reach the site of inflammation Differentiated Product 70%–80% Physician Stated Interest to Prescribe Physicians’ stated interest to prescribe based on product profile similar to XHANCE 87% Awareness / Execution Aided awareness within ENTs Awareness During Launch and allergists during launch Market Access 65% Tier 3 coverage at launch Covered Commercial Lives at Launch (Currently at 74% T3 coverage; 61% T3 unrestricted or single-step) 13
Financial Review Q1 2018 Revenues and Q2 and Full Year 2018 Average Selling Price (ASP) Perspectives • A large majority of Q1 revenue is • As planned, we expect the Xperience related to inventory shipped in late- program to be the primary source of March to support retail pharmacy demand for XHANCE in Q2. availability of XHANCE in April. • We believe the Xperience program • In accordance with GAAP accounting will help accelerate demand in the rules, we estimated ASP for XHANCE, early phase of launch. with specific assumptions for units • As a result of this program, we expect sold into the retail channel as well as ASP and Gross Margin percentage in units sold through the Xperience Q2 to be significantly less than in Q1. program. • We are focused on maximizing • The ASP for the Xperience program is patient retention following the significantly less than the ASP for the Xperience program. retail channel. 14
Chronic Sinusitis Supplemental Indication (sNDA) CS study design Selection of CRO First patients submitted to and study expected to FDA, meeting locations enroll in 4Q 2018 requested Chronic Sinusitis trial design expected to include co-primary endpoints: both an objective measure of inflammation and a subjective measure of symptom relief 15
2018 Stands to be an Important Year Achieve greater than 87% aided awareness in target ENT and allergist audience during retail launch Secure market access for XHANCE ≥65% of patients with commercial insurance plans at retail launch, expanding to 75% by year end Key Objectives Successfully launch XHANCE For 2018 Initiate clinical program with XHANCE in fourth quarter 2018 to support future Chronic Sinusitis indication Focus on executing our business strategy given our strong balance sheet 16
Investor Relations – NASDAQ: OPTN At 31 March 2018: 1 Analyst Coverage – $210 million in cash – 37.9 million common shares o/s BMO: Gary Nachman – 8.2 million options & warrants o/s – Long-term debt: $75 million Jefferies: David Steinberg Optinose Investor Contact Jonathan Neely, VP, Investor Relations Piper Jaffray: David Amsellem and Business Operations 267-521-0531 RBC: Randall Stanicky investors@optinose.com www.optinose.com @optinose 1 - Optinose is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Optinose or its management. Optinose does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations. 17
Building a Leading ENT / Allergy Specialty Company First Quarter 2018 Update May 14, 2018