Insite Vision Inc. (OTC MKTS:INSV) reported financial results for the quarter ended March 31, 2015. Revenues for the quarter ended March 31, 2015 were $3.4 million compared to $1.2 million for the same period in 2014; increase in revenues was due to a $3.0 million upfront license payment. Net loss for the quarter endedMarch 31, 2015 was $0.8 million, or $0.01 per share, compared to a net loss of $4.7 million, or $0.04 per share, in 2014. As of March 31, 2015, cash and cash equivalents totaled $1.1 million.
“In the first quarter of 2015, we finalized our New Drug Application for submission to the FDA for the marketing approval of BromSite, and entered into a licensing agreement with Nicox, S.A. for the development and commercialization of several of our products inEurope, the Middle East and Africa. At the same time, we have been carefully managing the company’s resources as we plan for future product development and strategic opportunities to leverage our assets,” said Timothy Ruane, InSite’s Chief Executive Officer.
Recent Business Highlights
- InSite finalized a New Drug Application (NDA) for submission to the U.S. Food and Drug Administration (FDA) for marketing approval of BromSite™ (bromfenac 0.075% in DuraSite®) to treat post-operative inflammation and prevent eye pain following cataract surgery. In addition to demonstrating significant efficacy, the results of InSite’s clinical studies support the ability of BromSite to provide superior tissue penetration of drug into the eye with a convenient twice-daily dosing. InSite is ready to file the NDA with the FDA, contingent upon raising additional financing to pay the FDA filing fee of approximately $2.2 million, or as a result of execution of a strategic opportunity.
- In January 2015, InSite entered into a license agreement with Nicox S.A., a France-based publicly traded company, for the development and commercialization of AzaSite® (1% azithromycin), AzaSite Xtra™ (2% azithromycin) and BromSite (0.075% bromfenac) in Europe, Middle East and Africa (105 total countries). Under the terms of the license, InSite received an upfront payment of $3.0 million and could potentially receive $13.75 million in milestone payments. InSite would also receive tiered, mid-single digit to double-digit royalties on the net sales of these three products. Nicox can request up to twelve full-time equivalent (FTE) employees from InSite to assist primarily with regulatory activities in the European Union. Nicox has agreed to reimburse InSite for the use of its employees. Should the twelve FTE employees be needed for a full year, the reimbursement amount payable to InSite would be approximately $3.6 million.
- In February 2015, InSite, Akorn and Pfizer entered into a settlement agreement to dismiss a patent infringement lawsuit against Mylan concerning Mylan’s Abbreviated New Drug Application seeking to launch generic versions of AzaSite with the FDA. Due to the settlement, under the terms of the license agreement with Akorn (Akorn License) effective March 2015, the royalty rate on sales of AzaSite in North America increased from 8% to 9%.
- In April 2015, InSite sold an additional aggregate principal amount of $2.6 million in 12% Senior Secured Notes and issued warrants to purchase 3,464,456 shares of common stock at an exercise price of $0.18 per share, pursuant to a Securities Purchase Agreement the company entered into in 2014. The company has now fully drawn down all available amounts under the Securities Purchase Agreement.
- On April 19, 2015, the U.S. Court of Appeals Federal district affirmed the New Jersey Court’s ruling in InSite’s favor. In May 2011,InSite Vision, Pfizer and Inspire Pharmaceutical filed a lawsuit against Sandoz for patent infringement of the patents covering AzaSite due to Sandoz filing an ANDA for AzaSite. In October 2013, the U.S. District Court of New Jersey ruled in our favor that all patents covering AzaSite were valid. Sandoz appealed the decision to the U.S. Court of Appeals Federal District. This decision should end the litigation.
- In March 2015, InSite Vision received a Notice of Allowance from the U.S. Patent and Trademark Office on a utility patent application for AzaSite Xtra™, a 2% solution of azithromycin formulated in DuraSite for ophthalmic indications. This will extend the patent protection of AzaSite Xtra to 2033.
First Quarter 2015 Results Summary
Total revenues for the quarter ended March 31, 2015 were $3.4 million compared to $1.2 million for the same period in 2014. For the quarters ended March 31, 2015 and 2014, revenues included $0.4 million and $1.2 million, respectively, of AzaSite royalties. Royalties on AzaSite declined by 69% compared to 2014 due to a 7% decline in AzaSite net sales and a reduction of the royalty rate from 25% to 8%-9%, in connection with the amendment of the Akorn License effective on April 1, 2014. In January 2015, we entered into a license agreement with Nicox and received an upfront payment of $3.0 million.
Research and development (R&D) expenses for the quarter ended March 31, 2015 were $2.1 million compared to $2.5 million in 2014. In 2015, R&D expenses primarily related to costs to finalize the NDA for BromSite, which was completed in February 2015. The company is ready to file the NDA with the FDA, contingent on raising additional financing to pay the FDA filing fee, which is approximately $2.2 million. In 2014, R&D expenses primarily related to the finalization of the second BromSite Phase 3 clinical trial and preparations of the BromSite NDA.
General and administrative (G&A) expenses for the quarters ended March 31, 2015 and 2014 were $1.6 million and $1.9 million, respectively. In 2014, G&A expenses were higher due to legal expenses from our ongoing partnering efforts.
Interest expense and other, net, was $0.6 million for the quarter ended March 31, 2015 compared to $1.8 million in 2014. Interest expense decreased in 2015 as a result of the repurchase and cancellation of the AzaSite Notes in June 2014. In 2015, interest expense was primarily related to the issuance of the Notes pursuant to the Purchase Agreement in the fourth quarter of 2014.
Net loss for the quarter ended March 31, 2015 was $0.8 million, or $0.01 per share, compared to a net loss of $4.7 million, or $0.04per share in 2014. Net loss was lower for the quarter ended March 31, 2015 primarily due to the upfront license payment from Nicox, lower interest expense due to the cancellation of the AzaSite Notes and higher legal and R&D expenses incurred in 2014.
As of March 31, 2015, InSite had cash and cash equivalents of $1.1 million. Total cash usage in the first quarter of 2015 was $0.6 million. InSite expects that the cash and cash equivalents balance, anticipated cash flows from operations and existing borrowings under our debt agreements will only be adequate to fund operations into July 2015. Additional funding is being sought through strategic transactions, collaborative or other partnering arrangements, equity financing, and from other sources. (Original Source)
Shares of Insite closed yesterday at $0.14 . INSV has a 1-year high of $0.36 and a 1-year low of $0.10. The stock’s 50-day moving average is $0.16 and its 200-day moving average is $0.20.
InSite Vision Incorporated is an ophthalmic product development company committed to advancing ophthalmic pharmaceutical products to address unmet eye care needs.