MALVERN, PA — Baudax Bio, Inc. (Nasdaq: BXRX), a pharmaceutical company focused on therapeutics for acute care settings, this week reported its financial results for the year ended December 31, 2020.
“As we continue to navigate the ongoing global pandemic, we continue to see a slower rate of commercialization of ANJESO than we would have expected without COVID-19, but feedback from users of ANJESO and our third-party market research is encouraging,” said Gerri Henwood, President and CEO of Baudax Bio. “Interest in the product continues to grow as we raise awareness and educate health care providers on the benefits of ANJESO for the management of moderate to severe pain in the acute care setting. We are happy to have added our fifth additional Orange Book listed patent in November, which has an expiry date of May 2030 and we have seen continued support for the safety and efficacy of ANJESO from peer-reviewed publications.”
“The fourth quarter and full year 2020 was marked by several significant milestones for Baudax Bio. We secured approximately $24 million of gross proceeds in the fourth quarter of 2020 and $31 million in the first quarter of 2021 from registered direct offerings and warrant exercises,” concluded Ms. Henwood.
- Update on Vials Sold to End-Customer. In 2020, over 65 institutions added ANJESO to their formulary. The number of vials sold to end-customers has increased 58% in the fourth quarter of 2020 versus the third quarter of 2020. The number of vials sold to hospitals and ambulatory surgical centers increased over 80% during the same time period. The average quarterly orders per account increased over 60% in the fourth quarter of 2020 versus the third quarter of 2020 and the re-order rate is approximately 55% with a deepening usage pattern.
- Commercialization Update. While the Company reduced its commercial headcount in November, it launched a virtual tele-sales team to help increase awareness and broaden usage in a cost-efficient manner. This team, deployed in December, has had early success increasing awareness of ANJESO in hospitals not currently targeted by the company’s sales team and has expanded modestly in late January 2021. Another approach deployed in late January 2021 enlists individuals with medical device background and previous relationships with orthopedic surgeons to further expand their access and reach in orthopedics.
- Publication of ANJESO Network Meta-Analysis in Peer-Reviewed Journal BMC Anesthesiology. In November 2020, the company announced the online publication of a Network Meta-Analysis for ANJESO injection in the peer-reviewed medical journal BMC Anesthesiology. ANJESO was found to be superior in pain reduction for abdominoplasty, bunionectomy and hysterectomy with similar or better safety compared to other approved IV non-opioid analgesics.
- Receipt of Additional Orange Book Listed Patent for ANJESO. In November 2020, the company announced the issuance of an additional United States patent on July 14, 2020. The patent covers the use of ANJESO to treat moderate to severe pain and has been listed in the U.S. Food and Drug Administration’s (FDA) Orange Book: Approved Drug Products with Therapeutic Equivalence Evaluations as it relates to ANJESO. This patent is an additional ANJESO patent to be listed in the Orange Book with an expiry date of May 2030 and joins four other patents listed in the Orange Book, amongst others owned or licensed by Baudax that currently provide exclusivity to the ANJESO franchise.
Corporate and Financial
- Announced a $17.6 Million Registered Direct Offering. In February 2021, the company entered into a definitive agreement with institutional and accredited investors for the purchase and sale of an aggregate of 11,000,000 shares of common stock at a purchase price of $1.60 per share in a registered direct offering priced at-the-market under Nasdaq rules. The gross proceeds from the offering were approximately $17.6 million, prior to deducting fees and expenses.
- Announced Exercise of Warrants for Gross Proceeds of $13.4 Million. In January 2021, the company entered into an agreement with an accredited healthcare-focused institutional investor to cash exercise its warrants to purchase 10,300,430 shares of common stock having an exercise price of $1.18. In connection therewith, the company sold the exercising holder new warrants, which are cash exercisable for an aggregate of 10,300,430 shares of common stock at an exercise price of $1.60 per share. The purchase price of the additional warrants was $1,287,554, or $0.125 per warrant. The gross proceeds to the company from the exercise of the warrants and the sale of the additional warrants were $13.4 million, prior to deducting fees and expenses. The offering was conducted as a registered direct offering priced at-the-market under Nasdaq rules.
- Closed Two $12 Million Registered Direct Offerings. In November and December 2020, the company entered into two definitive agreements with a healthcare-focused institutional investor for the purchase and sale of an aggregate of 10,126,583 and 10,300,430 shares of common stock (or pre-funded warrants in lieu of shares of common stock) and warrants to purchase up to an aggregate of 10,126,583 and 10,300,430 shares of common stock, respectively. Both offerings were registered direct offerings priced at-the-market under Nasdaq rules. The gross proceeds to Baudax Bio from the offerings were approximately $24 million, prior to deducting fees and expenses.
Financial Results for the Year Ended December 31, 2020
As of December 31, 2020, Baudax reports the company had cash and cash equivalents of $30.3 million.
Net product revenue for the year ended December 31, 2020 was $0.5 million related to sales of ANJESO in the U.S. since its launch in June 2020. There was no product revenue recognized for the year ended December 31, 2019.
Cost of sales for the year ended December 31, 2020 was $1.7 million and consisted of product costs, royalty expense and certain fixed costs associated with the manufacturing of ANJESO, including supply chain and quality costs. Certain product costs of ANJESO units recognized as revenue for the year ended December 31, 2020 were incurred prior to the FDA approval of ANJESO in February 2020, and therefore are not included in cost of sales during the period. Baudax Bio expects that over time, its cost of sales will increase as sales increase and as inventory values change to include all direct and indirect costs and expenses post FDA approval. No cost of sales was recorded for the year ended December 31, 2019.
Research and development expenses for the year ended December 31, 2020 were $9.1 million compared to $20.1 million for the year ended December 31, 2019. Excluding $0.9 million and $2.8 million of costs associated with restructuring initiatives recorded for the years ended December 31, 2020 and 2019, respectively, research and development expenses decreased $9.1 million. The decrease was primarily due to a decrease in pre-commercial manufacturing and clinical costs of $5.9 million, a decrease of $1.3 million as a result of re-allocating costs related to supply chain, regulatory, quality, and medical affairs associated with support of the commercial launch of ANJESO, a decrease of $1.2 million in preclinical costs and a decrease of $0.7 million in other general expenses.
Selling, general and administrative expenses for the year ended December 31, 2020 were $43.3 million, compared to $27.0 million for the same prior year period, an increase of $16.3 million. Excluding $0.8 million and $4.4 million of costs associated with restructuring initiatives recorded for the years ended December 31, 2020 and 2019, respectively, selling, general and administrative expenses increased $19.9 million. This increase was primarily due to the commercial launch of ANJESO, specifically, an increase in personnel related costs of $11.6 million, an increase in marketing and consulting costs of $6.4 million, and an increase of $3.9 million attributable to medical affairs and regulatory support. Other general costs increased $0.9 million. These increases were partially offset by the decrease in costs associated with the separation from Recro of $2.9 million in 2019.
For the year ended December 31, 2020, Baudax reported a net loss, including non-cash charges of $31.4 million, of $76.1 million, or $3.93 per share, compared to a net loss of $32.6 million, including non-cash income of $8.6 million, or $3.48 per share, for the comparable period in 2019. The non-cash charges of $31.4 million in 2020 were associated with stock-based compensation, non-cash interest expense, depreciation, amortization, changes in warrant valuations, and changes in fair value of contingent consideration. The non-cash income of $8.6 million in 2019 was associated with changes in fair value of contingent consideration, stock-based compensation, and depreciation.
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