electroCore Announces First Quarter Financial Results
Generated first quarter revenue of
Secured FDA clearance of gammaCore™ (nVNS) label expansion for migraine prevention
Announced initiatives to support the potential use of nVNS for the treatment of symptoms associated with COVID-19
Company to host conference call and webcast today,
First Quarter 2020 and Recent Highlights
- Generated net sales of approximately
$734,000compared to $410,000in the same period of 2019 and within the preliminary guidance range of $700,000to $750,000provided by management on April 17.
- Received 510(k) clearance from FDA to expand the gammaCore label into migraine prevention.
- Announced that England’s National Health Service (
NHS) has exercised its option to extend the Innovation and Technology Payment (ITP) Program for the use of gammaCore (nVNS) in the treatment of cluster headache in adults, through September 2020.
- Announced investigator initiated clinical trials (IITs) of non-invasive vagus nerve stimulation in COVID-19 patients in
Valencia, Spain(SAVIOR 1) and in Pittsburgh, PA(SAVIOR 2) and plans to support additional IITs in the U.S.
- Announced the publication of a peer reviewed paper, entitled “Use of Non-Invasive Vagus Nerve Stimulation to Treat Respiratory Symptoms Associated with COVID-19: A Theoretical Hypothesis and Early Clinical Experience,” in the journal Neuromodulation: Technology at the Neural Interface.
- Entered into a common stock purchase agreement with
Lincoln Park Capital Fund, LLC, a Chicago-based institutional investor, providing for the purchase, subject to certain limitations, of up to $25 millionin common stock of the company by Lincoln Park Capital.
- Executed a private placement of common stock with affiliates and existing shareholders.
“In parallel, we took steps to further reduce our cash burn while at the same time strengthening our balance sheet. Subsequent to the end of the quarter, we raised approximately
“As it pertains to the ongoing COVID-19 pandemic, we continue to monitor developments closely and remain committed to the ongoing health and safety of our employees. While the pandemic has created business disruptions across the globe and severely impacted our ability to forecast the trajectory of our business for the remainder of the year, we see an opportunity to play a part in the battle against this dangerous virus. SAVIOR 1, an investigator-initiated trial (IIT) has been initiated in
Additional information about SAVIOR 1 is available at: https://www.clinicaltrials.gov/ct2/show/NCT04368156?term=gammaCore&draw=2&rank=16
Additional information about SAVIOR 2 is available at: https://clinicaltrials.gov/ct2/show/NCT04382391
The paper in Neuromodulation is available at: https://onlinelibrary.wiley.com/doi/abs/10.1111/ner.13172
COVID-19 Business Continuity and Operations Update
The COVID-19 pandemic has spread to many of the countries in which the company, its customers and suppliers conduct business. The company currently qualifies as an “essential business” under
The company has responded to this crisis by developing and deploying a multi-faceted set of operational and financial initiatives designed to minimize disruptions to its normal business activities and preserve its ability to execute its long-term growth objectives.
To protect the safety, health and well-being of employees, customers, suppliers and communities, the company is following federal, state, and local guidelines to ensure safety in all facilities, including: increased frequency of cleaning and disinfection, social distancing practices, requiring most non-production related team members to work remotely where possible, restricting business travel, cancelling certain events, and limiting visitor access to facilities.
The company continues to assemble and ship product on schedule and is managing its inventory and supply chain to minimize disruptions.
First Quarter 2020 Financial Results
For the quarter ended
Paid months of therapy shipped to the
Paid months of therapy shipped outside the
Total operating expenses for the first quarter of 2020 were approximately
SG&A expense declined to approximately
Research and development expense decreased by
During the first quarter of 2020, the company recorded a restructuring and severance related charge of
GAAP net loss from operations for the first quarter of 2020 was
Adjusted EBITDA from operations for the first quarter of 2020 was a loss of
The company defines adjusted EBITDA from operations as GAAP net loss from operations, excluding income tax expense, stock-compensation expense, restructuring and other severance related charges, legal fees associated with stockholders’ litigation and total other income/expense. A reconciliation of GAAP net loss from operations to Non-GAAP adjusted EBITDA from operations has been provided in the financial statement tables included in this press release.
Cash and cash equivalents and marketable securities at
Net cash used for the quarter ended
The company’s expected cash requirements for 2020 and beyond are based on the commercial success of its products and its ability to further reduce operating expenses. There are significant risks and uncertainties as to its ability to achieve these operating results, including as a result of the potential adverse impact on its business from the COVID-19 pandemic. Due to these risks and uncertainties, the company may need to reduce its activities significantly more than in its current operating plan and cash flow projections assume in order to fund its operations beyond the first quarter of 2021.
Webcast and Conference Call Information
electroCore’s management team will host a conference call today
An archived webcast of the event will be available on the “Investors” section of the company’s website at: www.electrocore.com.
About electroCore, Inc.
electroCore, Inc. is a commercial stage bioelectronic medicine company dedicated to improving patient outcomes through its platform non-invasive vagus nerve stimulation therapy initially focused on the treatment of multiple conditions in neurology and rheumatology. The company’s current indications are for the preventative treatment of cluster headache and acute treatment of migraine and episodic cluster headache.
For more information, visit www.electrocore.com.
gammaCore™ (nVNS) is the first non-invasive, hand-held medical therapy applied at the neck as an adjunctive therapy to treat migraine and cluster headache through the utilization of a mild electrical stimulation to the vagus nerve that passes through the skin. Designed as a portable, easy-to-use technology, gammaCore can be self-administered by patients, as needed, without the potential side effects associated with commonly prescribed drugs. When placed on a patient’s neck over the vagus nerve, gammaCore stimulates the nerve’s afferent fibers, which may lead to a reduction of pain in patients.
gammaCore is FDA cleared in
- Safety and efficacy of gammaCore have not been evaluated in the following patients:
- Patients diagnosed with narrowing of the arteries (carotid atherosclerosis)
- Patients who have had surgery to cut the vagus nerve in the neck (cervical vagotomy)
- Pediatric patients
- Pregnant women
- Patients with clinically significant hypertension, hypotension, bradycardia, or tachycardia
- Patients should not use gammaCore if they:
- Have an active implantable medical device, such as a pacemaker, hearing aid implant, or any implanted electronic device
- Have a metallic device such as a stent, bone plate, or bone screw implanted at or near their neck
- Are using another device at the same time (e.g., TENS Unit, muscle stimulator) or any portable electronic device (e.g., mobile phone)
In the US, the FDA has not cleared gammaCore for the treatment of pneumonia and/or respiratory disorders such as acute respiratory stress disorder associated with COVID-19.
Please refer to the gammaCore Instructions for Use for all of the important warnings and precautions before using or prescribing this product.
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about electroCore's business prospects and product development plans, its expected net cash usage and cash burn rates and liquidity outlook, pipeline or potential markets for its technologies, and other statements that are not historical in nature, particularly those that utilize terminology such as "anticipates," "will," "expects," "believes," "intends," other words of similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the COVID-19 pandemic and associated disruptions, the ability to raise the additional funding needed to continue to pursue electroCore’s business and product development plans, the possibility that the company may be required, requested or choose to repay the PPP loan in advance of its stated payment terms, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore™, competition in the industry in which electroCore operates and overall market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents that electroCore files with the
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
|For the three months ended March 31,|
(in thousands, except share
and per share data)
|Consolidated statements of operations:|
|Cost of goods sold||298.1||157.8|
|Research and development||1,523.1||3,459.8|
|Selling, general and administrative||6,560.7||11,003.0|
|Restructuring and other severance related charges||365.0||—|
|Total operating expenses||8,448.8||14,462.8|
|Loss from operations||(8,013.1||)||(14,211.0||)|
|Interest and other income, net||(63.0||)||(366.2||)|
|Total other (income)/expense||(53.9||)||(349.5||)|
|Loss before income taxes||(7,959.2||)||(13,861.5||)|
|Provision for income taxes||—||—|
|Net loss from operations||$||(7,959.2||)||$||(13,861.5||)|
|Net loss per share of common stock - Basic and Diluted||(0.27||)||(0.47||)|
|Weighted average common shares outstanding - Basic and Diluted||29,774,226||29,319,318|
Condensed Consolidated Balance Sheet Information
|Cash and cash equivalents||$||15,620.5||$||13,563.8|
(Unaudited) Use of Non-GAAP Financial Measure
The company is presenting adjusted EBIDTA from operations because it believes this measure is a useful indicator of its operating performance. electroCore management uses this non-GAAP measure principally as a measure of the company’s core operating performance and believes that this measure is useful to investors because it is frequently used by the financial community, investors, and other interested parties to evaluate companies in the company’s industry. The company also believes that this measure is useful to its management and investors as a measure of comparative operating performance from period to period. Additionally, the company believes its use of non-GAAP adjusted EBITDA from operations facilitates management’s internal comparisons to historical operating results by factoring out potential differences caused by charges not related to its regular, ongoing business, including, without limitation, non-cash charges and certain large and unpredictable charges such as restructuring expenses.
The company has presented adjusted EBITDA from operations as a non-GAAP financial measure in this press release. The company defines adjusted EBITDA as its reported GAAP net loss from operations excluding income tax expense, depreciation and amortization, stock-based compensation, restructuring and other severance related charges, legal fees associated with stockholders litigation and total other income /expense and other income and expense.
|Three months ended
|GAAP net loss from operations||$||(7,959||)||$||(13,862||)|
|Restructuring and other severance related charges||$||365||$||—|
|Legal fees associated with stockholders litigation||$||396||$||—|
|Total other (income)/expense||$||(54||)||$||(349||)|
|Adjusted EBIDTA net loss from operations||$||(6,410||)||$||(13,441||)|
The company’s use of a non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are: the non-GAAP measure does not reflect interest or tax payments that may represent a reduction in cash available; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and the non-GAAP measure does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; the non-GAAP measure does not reflect the potentially dilutive impact of equity-based compensation; and the non-GAAP measure does not reflect changes in, or cash requirements for, working capital needs; other companies, including companies in electroCore’s industry, may calculate adjusted EBITDA net loss from operations differently, which reduces its usefulness as a comparative measure.
Because of these and other limitations, you should consider the non-GAAP measure together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and other GAAP results. A reconciliation of GAAP net loss from operations to non-GAAP adjusted EBITDA net loss from operations has been provided in the preceding financial statements table of this press release.