MALVERN, PA — Baudax Bio, Inc. (NASDAQ: BXRX) this week reported financial results for the three months ended March 31, 2022, provided key metrics around the ongoing commercial rollout of ANJESO (meloxicam) injection, updated status of neuromuscular blocking (NMB) agent development program, and provided an overview of other corporate and financial developments.
“ANJESO continued to grow during the first quarter, despite the COVID-19 headwinds experienced by the marketplace, and March was our single largest sales month since launch,” said Gerri Henwood, President and CEO of Baudax Bio. “We are actively working to expand the ANJESO label in additional patient populations. To that end, we commenced a Phase IV clinical trial evaluating ANJESO in multiple age groups of pediatric patients, with the dosing of one of the age cohorts. We look forward to the advancement of our novel neuromuscular blocking agents during the first half of 2022, including BX1000 progressing into the next clinical study in surgical patients, and the commencement of a dose-escalation study evaluating BX2000 in healthy volunteers. For BX3000, we are completing certain preclinical work and anticipate advancing into the clinic in late 2022 or early 2023.”
First Quarter 2022 and Recent Business Highlights
- ANJESO U.S. Commercialization. ANJESO is indicated for the management of moderate to severe pain, alone or in combination with other non-NSAID analgesics. For the first quarter 2022, ANJESO achieved net product revenue of $0.4 million, reflecting growth of 113% compared to the same period in the prior year and growth of 5% compared to the fourth quarter 2021. For the sixth consecutive quarter, demand for ANJESO increased with deepening usage patterns. Quarterly vials sold to end-users increased by 141% in the first quarter 2022 compared to the same period in the prior year and increased 20% compared to the fourth quarter of 2021. The month of March 2022 was the single largest month of ANJESO units sold launch-to-date for the product.
- Adjusting ANJESO field coverage. Given current market conditions, despite the promising trajectory for ANJESO sales, during the first quarter of 2022 Baudax Bio implemented a reduction in force that significantly cut its commercial spend for field personnel and other related expenses. This restructuring is expected to reduce the Company’s burn rate by approximately 65% going forward. Baudax Bio continues to focus on key accounts, contracts, and working with existing ordering accounts as well as continuing to pursue targeted new ones. Baudax Bio is evaluating possible partnering options for the ANJESO portfolio.
- Impacts from Omicron Variant of COVID-19. The Omicron variant of COVID-19 continued to impact the number of elective surgeries performed, along with access for field activities, especially during January and February, and in certain geographies. However, elective surgeries began gradually normalizing in March. Cancellations of elective surgeries were primarily due to demand for COVID-19 patient bed space as well as reduced availability of staff for ambulatory surgical centers and hospitals, especially in the Southern U.S. (e.g., Texas, Florida and Alabama), which currently accounts for over one third of Baudax Bio’s ANJESO business.
- Initiated Phase IV Clinical Trial in Pediatric Patients. The multicenter, open-label clinical trial will study the safety and pharmacokinetics of ANJESO in multiple age groups of children who undergo elective surgery in either an inpatient or outpatient setting. The study has enrolled one of the cohort groups of surgical patients during the first quarter of 2022 and is expected to enroll approximately 90 patients across three age groups (12 to <17, 7 to <12 and 2 to <7 years old) over time.
- Seventh Orange Book Listable Patent Issued. Baudax Bio recently announced the issuance of a new U.S. Patent, which covers ANJESO and other injectable, nanoparticulate meloxicam compositions and methods of administering such compositions by intravenous, intramuscular or subcutaneous injection. The ANJESO ‘478 patent has an expiry date of May 2030 and joins a total of six other patents listed in the Orange Book, amongst others owned or licensed by Baudax Bio that currently provide exclusivity to the ANJESO franchise.
- BX1000 (IV Intermediate-action). Baudax Bio completed a dose-escalation study evaluating BX1000 in 58 healthy volunteers in 2021. The results of the study showed that BX1000 was generally well tolerated through the dosing range tested. Muscle paralysis was rapidly achieved along with complete spontaneous recovery. Baudax Bio is preparing the clinical study report for this dose-escalation study and expects to submit it to the U.S. Food and Drug Administration (FDA) in 2022. Additionally, Baudax Bio is expecting to begin enrollment for a Phase II BX1000 study in surgical patients that is expected to commence in the summer of 2022, which it believes enrollment will be completed in 2022.
- BX2000 (IV Ultra-short action). Baudax Bio has completed and submitted additional nonclinical testing of BX2000 as requested by the FDA. Baudax Bio has clearance to proceed with the planned dose escalation study in healthy volunteers and believes it is on track to progress through the majority of dosing cohorts in 2022.
- BX3000 (Reversal agent). Additional work to enhance formulation of the BX3000 reversal agent is underway and Baudax Bio believes that this data, along with certain non-clinical data, which will be submitted to FDA later this year, will allow for initiation of the clinical program in healthy volunteers in late 2022 or early 2023.
Corporate and Financial
- Secured $10 Million in Financing. Baudax Bio successfully completed an underwritten public offering and issued 3,508,772 shares of common stock, together with warrants to purchase up to an aggregate of 3,508,772 shares of common stock. Each share of common stock was sold together with one warrant to purchase one share of common stock at a combined public offering price of $2.85 per share. Gross proceeds from the offering were approximately $10 million, before deducting underwriting discounts, commissions and other offering expenses.
- Wayne B. Weisman Appointed Chairman of the Board. Mr. Weisman has been a director of Baudax Bio since 2019, and brings extensive experience in venture capital investing. He currently serves as founder and managing partner of SCP Vitalife Partners where he has been a member of the investment committee and has led SCP’s efforts in the life sciences.
First Quarter 2022 Financial Results
As of March 31, 2022, Baudax Bio had cash and cash equivalents of $11.5 million.
Net product revenue related to sales of ANJESO in the U.S., recognized according to U.S. GAAP, for the three months ended March 31, 2022 was $0.4 million. This compares to $0.2 million for the three months ended March 31, 2021, an increase of $0.2 million. While utilizing the title model of distribution, product revenue is recognized as shipments are made to the Company’s third-party logistics provider. The increase in net product revenue was attributable to securing additional formulary approvals, which allowed for more usage of ANJESO that can lead to early adoption of the product. Throughout the commercial launch, this adoption led to deepening usage and increased end-user demand as well as increased purchasing through both wholesalers and by direct customers.
Cost of sales for the three months ended March 31, 2022 was $0.6 million, compared to $0.8 million for the three months ended March 31, 2021, a decrease of $0.2 million, and consisted of product costs, royalty expense and certain fixed costs associated with the manufacturing of ANJESO, including supply chain and quality costs. The decrease of $0.2 million was primarily a result of the reduction of inventory scrap expense recorded in the current year compared to the prior year. Certain product costs of ANJESO units recognized as revenue during the three months ended March 31, 2022 and 2021 were expensed prior to the FDA approval of ANJESO in February 2020, and therefore are not included in cost of sales during the related periods. Baudax Bio expects that over time, product costs in cost of sales will increase as sales increase and inventory associated with the units manufactured prior to FDA approval have been sold.
Research and development expenses for the three months ended March 31, 2022 were $1.3 million compared to $1.1 million for the three months ended March 31, 2021. Research and development expenses increased $0.2 million, which was primarily due to an increase in clinical trials costs associated with the Company’s ANJESO pediatric program of $0.2 million.
Selling, general and administrative expenses for the three months ended March 31, 2022 were $14.2 million, of which $7.3 million was attributable to selling expense and $6.9 million was attributable to general and administrative expense. This compares to $12.1 million for the same prior year period, of which $5.1 million was attributable to selling expense and $7.0 million was attributable to general and administrative expense. General and administrative expenses remained flat over the comparable periods while selling expenses increased $2.2 million, which was primarily a result of accrued severance costs associated with the reduction in force in the first quarter of 2022 of $1.7 million.
Baudax Bio reported net loss of $12.8 million, including a non-cash benefit of $2.4 million, or $(3.17) per share, for the three months ended March 31, 2022. Adjusted net loss* was $(15.2) million.
* Non-GAAP Financial Measures
To supplement the Company’s financial results determined by U.S. generally accepted accounting principles (“GAAP”), the Company is reporting certain non-GAAP information for its business, including adjusted net loss. Adjusted net loss is net loss as determined under GAAP, excluding the changes in fair values of contingent consideration and warrant valuations, gain on extinguishment of debt, interest, depreciation, amortization, and stock-based compensation. The Company believes this non-GAAP financial measure is helpful in understanding its business as it is useful to investors in allowing for greater transparency of supplemental information used by management. This measure is used by investors, as well as management in assessing the Company’s performance. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, reported GAAP results. Further, Non-GAAP financial measures, even if similarly titled, may not be calculated in the same manner by all companies, and therefore should not be compared. For more information, visit www.baudaxbio.com.
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