DGAP-News: PAION AG / Key word(s): Quarterly / Interim Statement
PAION AG PUBLISHES GROUP QUARTERLY STATEMENT FOR THE FIRST NINE MONTHS OF 2021
- Transformation into commercial specialty pharma company following expansion of European product portfolio; angiotensin II (GIAPREZA(R)) and eravacycline (XERAVA(R)) successfully launched in Q3 2021
- PAION launches remimazolam (Byfavo(R)) in the UK and the Netherlands following EU and UK market approvals in procedural sedation
- Remimazolam launched by partners in the U.S. and South Korea
- Financial position strengthened to support product launches: EUR 7.8 million gross proceeds raised in rights issue and EUR 20 million loan fully drawn from EIB
- Combined revenues of EUR 5.5 million for first nine months of 2021 coming increasingly from product sales and royalties as opposed to milestone payments
- Cash and cash equivalents of EUR 13.1 million as of 30 September 2021
Aachen (Germany), 10 November 2021 - The specialty pharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, Prime Standard: PA8) today reports its consolidated financial results according to International Financial Reporting Standards (IFRS) for the first nine months of 2021.
"Remimazolam is increasingly available to physicians around the world and sales growth is strong, despite the challenges of the ongoing Covid-19 pandemic. We are now developing this ultrafast-acting anesthetic for pediatric patients, and we hope that children will benefit from sedation with remimazolam soon," said Dr. Jim Phillips, CEO of PAION AG. "We are also making strong progress in Europe with our direct rollout of remimazolam, as well as our two other promising critical care products - angiotensin II (GIAPREZA(R)) and eravacycline (XERAVA(R)). We have already seen our first sales and look forward to growing the sales in these important markets in the months & years ahead."
With the addition of angiotensin II and eravacycline to its commercial portfolio, PAION has started to establish its own commercial infrastructure in certain core countries in Western Europe, including Germany, the UK, the Netherlands and Denmark, to market angiotensin II and eravacycline together with remimazolam. PAION launched these three products in the third quarter of 2021 in a staggered manner by country; by the end of 2022, launches are planned to have been conducted in most key European markets. Initial product sales indicate a good market acceptance of the products.
Remimazolam in Europe
General anesthesia: Based on the positive results in the Phase III trial in general anesthesia and the approval in procedural sedation, PAION plans to submit an extension of the marketing authorization application (MAA) for remimazolam for general anesthesia by the end of 2021. The approval process for an extension application is generally faster than for an MAA.
Intensive Care Unit (ICU) sedation: In October 2021, the last patient was treated in the Investigator Initiated REHSCU rial. This trial, led by Raphael Cinotti at the University of Nantes, is evaluating remimazolam for the sedation of patients on ICUs. Thirty patients were enrolled in the study. The results should provide further evidence for a successful use of remimazolam in this patient group.
Pediatric development: In September 2021, PAION and U.S. licensee Acacia Pharma (Acacia) announced the initiation of a pivotal study investigating remimazolam in the mild to moderate sedation of pediatric patients. The study will enrol approximately 100 children and adolescents aged up to and including 17 years at leading institutions across the United States and Denmark. Upon successful completion of the pediatric development plans, it is expected that the EU and U.S. label of remimazolam will be expanded to include mild to moderate sedation for procedures in pediatric patients.
Remimazolam activities in the license territories in the first nine months of 2021
Licensees generated remimazolam revenues totalling EUR 4.4 million in the first nine months of 2021. Based on these, PAION receives royalty payments in varying amounts.
In the U.S., remimazolam (brand name BYFAVOTM) was launched by Acacia for procedural sedation in January 2021. While Acacia has indicated that initial market response was positive, access to clinics and prescribing doctors has been severely limited due to the COVID-19 pandemic. At the end of September 2021, Acacia reported remimazolam to be on track to meet its full year 2021 formulary acceptance goal. By the end of September, remimazolam had been put on formulary in 95 accounts with a >90% win rate; Acacia expects a total of 150 accounts to put remimazolam on formulary by the end of 2021.
For the indication general anesthesia, the license agreement with Cosmo/Acacia originally provided for an option for the U.S. rights to develop and commercialize remimazolam. As this option was not exercised by the licensee, it has lapsed. An advisory meeting was recently held with the FDA (U.S. Food and Drug Administration) on suitability of the European clinical program for filing of a New Drug Application (NDA) in the U.S. As a positive outcome of the Type B meeting, the FDA stated that a submission would be possible with the current data package consisting of European and Asian general anesthesia data. Submission would require a re-analysis of the current data. Alternatively, an additional clinical trial was recommended. PAION will now use the outcome of the meeting to intensify the discussion with interested parties for the general anesthesia license in the U.S.
For Japan, PAION and licensee Mundipharma have agreed on an amendment of the royalty calculation. A corresponding contract amendment has been put in place. Under the terms of the amendment, PAION receives 15.5% royalties on net sales. From mid-2023 onwards, the royalty rate could be reduced in case of (too) high cost of goods in relation to net sales, but not below 5%. Mundipharma initiated a Phase II/III clinical trial in May 2021 to evaluate the efficacy and safety of remimazolam (brand name Anerem(R)) in Japanese patients undergoing gastrointestinal endoscopy. Following approval in general anesthesia, an additional indication is being developed in Japan.
In China, currently the largest market for remimazolam (brand name Ruima(R)), good sales growth has been seen during the first nine months of 2021. The NDA in general anesthesia was accepted for review by the National Medical Products Administration (NMPA) in July 2021. Supported by licensee Yichang Humanwell, Chinese investigators are exploring the use of remimazolam in additional indications, including in the sedation of ICU patients during and after mechanical ventilation and in spinal anesthesia, with a focus on elderly patients. In Shanghai, the first Securities Times journal's "Drug Innovation Award" ceremony was held in June 2021, and Yichang Humanwell won the "Drug Innovation Achievement Award", while remimazolam was selected for the "Annual Pharmaceutical Innovation Achievement Award."
In South Korea, licensee Hana Pharm received market approval for remimazolam (brand name ByfavoTM) in general anesthesia in January 2021 and launched the product at the end of March. This was followed by market approval in procedural sedation in August 2021. Hana Pharm has reported that its remimazolam domestic landing and market positioning strategy was successful in the first months following launch. Hana Pharm has initiated various academic activities and clinical trial promotion strategies to increase the accessibility of remimazolam, starting with a remimazolam launch symposium held at the end of April 2021.
In March 2021, PAION granted TTY Biopharm (TTY) an exclusive license for the development and commercialization of remimazolam in Taiwan.
In April 2021, a rights issue was completed with gross proceeds of EUR 7.8 million. The subscription rate was over 92%. Thereby, the share capital of PAION AG was increased to EUR 71,336,992.00 by using the Authorized Capital 2020 through the issuance of 5,095,499 new shares.
Results of operations, financial position and net assets
Revenues in the first nine months of 2021 amounted to EUR 5.5 million of which EUR 2.6 million resulted from milestone payments and EUR 2.9 million from remimazolam API sales to licensees (EUR 2.3 million) and royalties (EUR 0.6 million). In the prior-year period, revenues amounted to EUR 19.3 million and mainly resulted from milestone payments.
Cost of sales amounted to EUR 2.0 million in the first nine months of 2021.
Research and development expenses in the first nine months of 2021 amounted to EUR 4.5 million (prior-year period: EUR 8.5 million) and decreased as planned particularly due to the completion of the EU Phase III study in general anesthesia in the previous year.
Tax income amounted to EUR 0.5 million in the first nine months of 2021 (prior-year period: EUR 0.8 million) and mainly relates to tax claims for reimbursement of parts of the research and development expenses from the British tax authorities. The decrease in comparison to the prior-year period is mainly due to lower research and development expenses.
The net result for the first nine months of 2021 amounted to EUR -16.6 million compared to a net result of EUR 5.7 million in the prior-year period. This corresponds to a decrease of the net result in the amount of EUR 22.3 million compared to the first nine months of 2020 which is mainly attributable to lower revenues and lower expenses for research and development on the one hand and higher financial expenses as well as general administrative and selling expenses than in the prior-year period on the other hand.
Compared to 31 December 2020, cash and cash equivalents decreased by EUR 6.5 million to EUR 13.1 million at the end of the current reporting period. The decrease of cash and cash equivalents stems from cash flows from operating activities of EUR -14.8 million mainly resulting from the net result of the period and working capital changes, cash flows from investing activities of EUR -18.9 million primarily in connection with the acquisition of the commercialization rights for the products GIAPREZA(R) und XERAVA(R) in Europe and cash flows from financing activities of EUR 27.2 million which mainly resulted from the complete draw-down of the loan from the EIB as well as the net proceeds from the rights issue completed in April 2021.
Intangible assets increased by EUR 17.9 million compared to 31 December 2020 to EUR 19.8 million as of 30 September 2021. Thise increase primarily stems from the commercialization rights for the products GIAPREZA(R) and XERAVA(R) in Europe amounting to EUR 17.5 million as of 30 September 2021 which were acquired in the reporting period under the license agreement concluded with La Jolla Pharmaceutical.
Equity amounted to EUR 12.1 million as of 30 September 2021 (31 December 2020: EUR 21.3 million). The decrease of EUR 9.2 million mainly results from the negative net result of the first nine months of 2021 on the one hand, and the proceeds from the issue of new shares in the course of a rights issue completed in April 2021 on the other hand. As of 30 September 2021, the equity ratio was 28.1% (31 December 2020: 75.6%).
Impact of the Covid-19 pandemic on the PAION Group
It is planned to grant the commercialization rights for remimazolam, angiotensin II and eravacycline to licensees in selected territories in Europe where no own commercialization is planned, and to also out-license remimazolam for additional markets outside Europe as well.
Key consolidated financial figures, IFRS (unaudited)
In addition, PAION markets two intensive care products in selected European countries: Angiotensin II (GIAPREZA(R)), a vasoconstrictor indicated for the treatment of refractory hypotension in adults with septic or other distributive shock, and eravacycline (XERAVA(R)), a novel fluorocycline type of antibiotic indicated for the treatment of complicated intra-abdominal infections in adults.
PAION's mission is to be a leading specialty pharmaceutical company in the fields of anesthesia and critical care by bringing novel products to market to benefit patients, doctors and other stakeholders in healthcare.
PAION is headquartered in Aachen (Germany).
 REmimazolam Infusion in the Context of Hypnotic Shortage in the Critical Care Unit During the Pandemic of COVID-19, the REHSCU Study (REHSCU)
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