MALVERN, PA — Baudax Bio, Inc. (NASDAQ: BXRX), a pharmaceutical company focused on therapeutics for acute care settings, has provided an update regarding the initial commercial launch of ANJESO and provided an overview of other corporate initiatives and achievements.
“During the first half of 2020, we saw the approval and commercial launch of ANJESO, the first and only non-opioid, once daily, intravenous (IV) non-steroidal anti-inflammatory (NSAID) agent for the management of moderate to severe pain,” said Gerri Henwood, President and Chief Executive Officer of Baudax Bio. “Overall, the ANJESO launch is progressing well and we are pleased with the early commercial uptake and feedback from physicians. Although we are seeing more customers placing orders and the order size is increasing, the commercial rollout continues to be impacted by the ongoing COVID-19 pandemic and we believe the revenue ramp will likely take more time than originally anticipated. Looking ahead to the remainder of 2020 and beyond, we are focused on securing hospital formulary adoption and incorporation into standard pain management protocols. We are also working with the surgical and anesthesia community to increase awareness of ANJESO and help ensure physicians and patients have access to this important product.”
ANJESO Launch and Commercial Rollout
The U.S. commercial rollout of ANJESO, Baudax’s lead asset indicated for the management of moderate to severe pain, alone or in combination with other non-NSAID analgesics, is progressing well. ANJESO became broadly available through wholesalers in the U.S in June 2020. As of today, over 50 institutions have added ANJESO to their formulary and the average order size has increased by nearly 75% since launch. The ANJESO re-order rate is a robust 50% with a deepening usage pattern. In just over 3 months on the market, ANJESO has been utilized across a wide variety of surgical and non-surgical procedures and is now beginning to be incorporated into surgical protocols and electronic health record (EHR) order sets, with demand increasing monthly. However, Baudax’s ongoing commercial efforts continue to be impacted by COVID-19 pandemic related obstacles, including an absence of hospital formulary meetings where new drugs can be adopted, as well as access within hospitals. Many hospital formularies just recently resumed meetings after a 6-month absence. Despite there being a backlog of agents scheduled to be reviewed, the Company believes it will make steady progress getting ANJESO added to further hospital formularies in the months and quarters ahead.
“For the significant number of patients undergoing surgical procedures, there is an important need for new non-opioid options to manage their pain post-surgically,” said Harold K. Humphries, M.D., Anesthesiologist and Operations Officer at Greater Sacramento Surgery Center. “At our center, we have noticed that ANJESO alone works as well as peripheral nerve blocks for controlling postoperative pain in total knee replacement cases. We’ve also found that with ANJESO the utilization of our 23-hour stay program is reduced, resulting in significant savings with overhead costs, which markedly offsets the cost of the product itself. ANJESO is an excellent addition to our patient care protocols.”
Effective October 1, 2020, ANJESO is reimbursed by the Centers for Medicare and Medicaid Services (CMS), under a unique J code, facilitating reimbursement for use in the hospital outpatient, ambulatory surgery center and physician office settings of care.
Strategic Transaction to Simplify Capital Structure and Exchange Warrants
Effective October 19, 2020, the Company entered into exchange agreements with holders of its short dated (13 months) Series B Warrants and long dated (5 year) Series A Warrants providing for the immediate exchange of 0.2 shares of common stock per warrant, for either all Series A Warrants or Series B Warrants held by each holder, at the holders election. As a result of the warrant exchange, the exercise price of the remaining outstanding warrants (whether Series A Warrants or Series B Warrants, including warrants held by holders not participating in the exchange) was adjusted to $0.01 per share. Holders participating in the exchange also agreed to amend their Warrants not so exchanged to remove certain anti-dilution and variable pricing protective provisions. Additionally, following the completion of the warrant exchange, for holders participating in the exchange, to the extent such holder’s outstanding warrant is a Series A Warrant, the expiration date for such warrant was amended to April 26, 2021.
As a result of the warrant exchange, the exercise and exchange of all of the Series A Warrants and Series B Warrants (approximately 15 million warrants outstanding prior to the exchange) is expected to result in the issuance of approximately 9.8 million shares of the Company’s common stock in the aggregate. This Warrant restructuring transaction was done to improve the Company’s capital structure and remove certain financial overhang, which the Company believes negatively impacted its expected valuation and ability to attract additional capital investments.
“By executing this strategic warrant restructuring, we have cleaned up the balance sheet and significantly improved the capital structure of the Company through elimination of certain provisions that would have contributed to a financial overhang for the remaining 4-year plus life of the Series A warrants, all while minimizing the anticipated dilution for our shareholders by over 25%,” said Ryan D. Lake, Chief Financial Officer of Baudax Bio. “As of today, holders of approximately 90% of the Warrants are participating in the exchange. We sincerely appreciate the ongoing support of all of our shareholders and their willingness to work constructively with the Company and our bankers to execute this important transaction.”
Other material terms related to the Series A Warrant and Series B Warrant exchange and amendments can be found in the Company’s current report on Form 8-K, which was filed with the Securities and Exchange Commission on October 20, 2020.
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