2019 annual report€¦ · eagle pharmaceuticals 2019 and recent accomplishments 9 generated 2019...

2019ANNUAL REPORT

Eagle Pharmaceuticals, Inc.

(Nasdaq: EGRX)

EAGLE PHARMACEUTICALS 2019 AND RECENT ACCOMPLISHMENTS 9 Generated 2019 revenue of $195.9 million, non-GAAP EBITDA of $49.0 million, non-GAAP EPS of $2.61

9 Repurchased $18.0 million of Eagle common stock in 2019, and $171.9 million since 2016

9 Approved new stock repurchase program providing for the repurchase of up to $160.0 million of the Company’s outstanding common stock

9 Ranked #27 on Fortune Magazine’s 100 List of Fastest-Growing Companies

9 RYANODEX® (dantrolene sodium) for injectable suspension demonstrated to inhibit the growth of SARS-CoV-2, the virus causing the COVID-19 pandemic, in a controlled in vitro laboratory test; Eagle submitted an Investigational New Drug (“IND”) application to the FDA for a Phase 2 clinical trial in partnership with Hackensack University Medical Center to evaluate the efficacy of RYANODEX in patients infected with SARS-CoV-2

9 Japanese licensing partner, SymBio Pharmaceuticals Limited (“SymBio”), completed clinical trial enrollment for TREAKISYM rapid infusion (“RI”) liquid bendamustine formulation and submitted an NDA for TREAKISYM ready-to-dilute (“RTD”) liquid formulation in Japan; Eagle is entitled to a $5 million milestone payment upon approval of an NDA for either RI or RTD, as well as royalties and milestones that could total $10 to $25 million per year if SymBio first launches TREAKISYM RTD and then its RI product

9 Received final approval from FDA for PEMFEXY™, a branded alternative to ALIMTA®, following settlement of patent litigation with Eli Lilly and Company, which allows for initial market entry (equivalent to approximately a three-week supply of current ALIMTA utilization) on February 1, 2022, and subsequent uncapped entry on April 1, 2022

9 Signed license agreement with the University of Pennsylvania to develop RYANODEX for the potential treatment of Alzheimer’s disease

9 Resubmitted New Drug Application to FDA for RYANODEX for treatment of exertional heat stroke, in conjunction with body cooling

9 Entered into a strategic collaboration with TYME Technologies Inc. to advance oral SM-88, a modified tyrosine derivative, for the treatment of cancer patients

9 Entered into research agreement with NorthShore University HealthSystem to study RYANODEX for traumatic brain injury in animal models

9 Received orphan drug designation for RYANODEX for treatment of brain damage secondary to organophosphate exposure (nerve agents)

9 Achieved positive results of study to evaluate the neuroprotective effects of RYANODEX secondary to nerve agent exposure; intend to commence a second GLP study in 2020

9 Commenced dosing in pilot study to support submission of an NDA for EA-114 estrogen, our receptor antagonist fulvestrant product candidate

9 Secured unique J-Code (J9036) for BELRAPZO® (bendamustine HCl injection), effective July 1, 2019

9 Expanded the BENDEKA® licensing agreement, extending term and increasing royalty rate from 25% to 30%

9 Appellate Court affirmed lower court decision requiring FDA to recognize seven years of orphan drug exclusivity for BENDEKA; accordingly we do not believe TREANDA generics will enter the market before 2022, unless clinically superior to BENDEKA

9 Received favorable BENDEKA patent litigation decision from the U.S. District Court for the District of Delaware; decision prevents litigation defendants from launching their proposed ANDA products before 2031

PRODUCTS STATUS/ MILESTONE

RYANODEX® (dantrolene sodium) Marketed

Bendamustine Hydrochloride Injection, for 500mL Infusion / BELRAPZO® Marketed

BENDEKA® (bendamustine HCl injection) Marketed by Teva

PEMFEXY™ (pemetrexed) Approved with a February 1, 2022 launch date

Vasopressin Injection 1mL**Same indications as Vasostrict®

ANDA filed

EP-4104 (dantrolene sodium) Exertional Heat Stroke NDA filed

EP-4104 (dantrolene sodium) Brain Damage Secondary to Nerve Agent ExposureOne animal study completed

Second GLP study planned in 2020

EP-4104 (dantrolene sodium) Acute Radiation Syndrome Animal study planning in progress

EP-4104 (dantrolene sodium) Traumatic Brain InjuryResearch agreement with

NorthShore University HealthSystem

EA-112 (dantrolene sodium) Alzheimer’s diseaseResearch collaboration

with University of Pennsylvania

EA-111 (intramuscular formulation) Preclinical studies in progress

SM-88 for Pancreatic Cancer1 Pivotal clinical studies under way

EA-114 (fulvestrant)* *Same indications as Faslodex®

Pilot study in progress

EP-4104 (dantrolene sodium) SARS-CoV-2 (COVID-19)IND for Phase 2 study

with Hackensack University Medical Center

1 Studies being conducted by TYME Technologies Inc.

1 A reconciliation of our GAAP to non-GAAP financial measures is provided in Appendix A to our Proxy Statement filed with the U.S. Securities and Exchange Commission on April 29, 2020.

EAGLE PHARMACEUTICALS, INC.

2019 STOCKHOLDER LETTER

Dear Fellow Stockholders:

2019 was another pivotal year for Eagle. We made remarkable progress advancing our pipeline

and supporting the commercial products that underscore Eagle’s evolution into a fully

integrated pharmaceutical company. Our efforts over the past several years have paid off in a

surge of activity across our oncology and CNS/metabolic critical care product portfolio. We are

proud of our commercial capabilities and the dedication of our team members in advancing

first-in-class product candidates that hold the potential to result in meaningful improvements in

patients’ lives. We are also excited about the strategic collaborations we have entered into this

year with several prestigious partners.

Total revenue for 2019 was $195.9 million, compared to $213.3 million in 2018. As of

December 31, 2019, Eagle had $109.8 million in cash and cash equivalents, plus $48.0 million in

net accounts receivable ($38.3 million of which was due from Teva Pharmaceutical Industries

Ltd.), and $39.0 million in outstanding debt. Therefore, as of December 31, 2019, our net cash

plus receivables was $118.8 million. In 2019, we purchased $18.0 million of our common stock,

bringing Eagle’s total common stock repurchases from August 2016 through December 31,

2019 to $171.9 million. We also have continued to invest cash in our active pipeline. From 2013

through the end of 2019, we have invested $200 million in R&D, which represents 21% of our

revenue over that period. In 2019, Adjusted Non-GAAP EBITDA was $49.0 million, compared to

$71.4 million in 2018. 1 2019 cash flow from operations, excluding shifts in receivables, was

$37.5 million.

KEY ACHIEVEMENTS AND HIGHLIGHTS OF 2019

Oncology

During the course of the year, we continued to build on our highly successful bendamustine

franchise. Several important catalysts contributed to this progress:

Beginning on October 1, 2019, Eagle’s royalty rate increased from 25% to 30% of net U.S. sales

of BENDEKA®. On March 13, 2020, the U.S. Court of Appeals for the District of Columbia Circuit

affirmed the lower court’s decision on June 8, 2018 requiring the U.S. Food and Drug

Administration (“FDA”) to grant Eagle seven years of orphan drug exclusivity in the U.S. for

BENDEKA. Accordingly, we do not believe TREANDA generics will enter the market before 2022.

Internationally, our licensing partner in Japan, SymBio Pharmaceuticals Limited (“SymBio”),

continued to make what we view as excellent progress in advancing TREAKISYM ready-to-dilute

(“RTD”) and TREAKISYM rapid infusion (“RI”) for approval in Japan. SymBio filed its NDA in Japan

in October 2019 and approval of the RTD bendamustine product is expected in September 2020.

In late March 2020, SymBio completed patient enrollment in a clinical trial of the RI product for a

liquid bendamustine injection with a ten-minute administration time in Japan. Eagle is entitled to

a $5.0 million milestone payment upon approval of an NDA for either TREAKISYM RTD or RI.

These royalties and milestones could be meaningful --- to the magnitude of $10 to $25 million

per year if SymBio first launches TREAKISYM RTD and then its RI product.

In addition, we earned a $9.0 million milestone payment for BENDEKA in 2019.

In 2019, the combined bendamustine franchise product, royalty, and milestone revenue totaled

$181.1 million.

Another key product in our oncology portfolio is PEMFEXY™ (pemetrexed for injection), a

branded alternative to ALIMTA®. Following a settlement agreement reached with Eli Lilly and

Company in December 2019, which provides for an initial limited market entry on February 1,

2022, and a subsequent uncapped entry on April 1, 2022, Eagle received final FDA approval for

PEMFEXY on February 10, 2020. This launch represents a sizable opportunity for Eagle to expand

its presence in the oncology space.

Our oncology pipeline remains active, as well. We continue to strive to develop EA-114, our

unique fulvestrant product candidate for hormone-receptor-positive advanced breast cancer. In

the fourth quarter of 2019, dosing commenced in our pilot study, which aims to determine if EA-

114 will result in greater inhibition of estrogen receptors and thus better patient outcomes

relative to currently available treatment options. We remain committed to our novel approach

and believe it could lead to a best-in-class hormone-receptor-positive breast cancer product that

could potentially come to market in 2022. We look forward to progressing with a pivotal trial

once the pilot has concluded.

In January 2020, Eagle announced a strategic collaboration with TYME Technologies Inc.

(“TYME”) to advance SM-88, a novel therapeutic aimed at difficult-to-treat cancers. Eagle made

an initial $20.0 million investment and in exchange received 10 million restricted shares of

TYME’s common stock, as well as a co-promotion right on SM-88. Subject to achieving certain

milestones, TYME would also be entitled to receive an additional $20.0 million, $10.0 million of

which would be an additional purchase of equity in TYME. Under our agreement, Eagle is

responsible for 25% of the promotional sales effort of SM-88 and will receive 15% of all net sales

in the United States. TYME may also buy out Eagle’s rights under the co-promotion agreement at

any time for $200 million.

We are excited and proud of the progress we made within our oncology portfolio in 2019, as we

continue to advance our research and development and commercialization efforts to bring life-

saving therapeutics to patients.

CNS/Metabolic Critical Care

In 2019, Eagle continued its innovative work around RYANODEXâ, expanding beyond malignant

hyperthermia, an approved indication, to further investigate potential applications of dantrolene

sodium. Our proprietary research continues to yield insights into how dantrolene plays a role in

restoring intracellular calcium homeostasis. This is an especially exciting time of great

possibilities for the RYANODEX franchise. Our in-house scientists, together with esteemed

academic partners, continue to pursue what we believe are potentially transformative

applications for RYANODEX across multiple disease states that have lacked treatment options for

many years, including exertional heat stroke, brain damage secondary to nerve agent exposure,

traumatic brain injury, Acute Radiation Syndrome, Alzheimer’s disease, and most recently,

COVID-19.

Amid the COVID-19 pandemic that has altered all of our lives, Eagle is pleased to share that

RYANODEX for injectable suspension was demonstrated to inhibit the growth of SARS-CoV-2,

the virus causing COVID-19, in a controlled in vitro laboratory test. Working in partnership with

Hackensack University Medical Center, we have submitted an Investigational New Drug (“IND”)

application to FDA for a Phase 2 clinical trial to evaluate the efficacy of RYANODEX in patients

infected with SARS-CoV-2. We look forward to an expeditious path forward and the opportunity

to help identify an effective treatment for this virus.

We made significant progress on multiple other fronts as well. In January 2020, we resubmitted

our NDA for RYANODEX for exertional heat stroke to FDA, with a July 8 Prescription Drug User

Fee Act date. There is currently no approved drug product for the treatment of this acute and life-

threatening condition, and we believe that RYANODEX in conjunction with body cooling has the

potential to significantly improve patient outcomes.

We are also evaluating RYANODEX for the treatment of brain damage secondary to nerve agent

exposure for what would be a first-in-class treatment, if approved. In animal models, we have

demonstrated that RYANODEX significantly reduces the death of neurons. We are working on

the design of our second study, under FDA’s animal rule, which we expect to commence this

year, with the potential to file an NDA for this indication before year-end. We are excited to be

collaborating with the U.S. Army Medical Research Institute of Chemical Defense on this

important initiative. If approved, RYANODEX would represent the first product available for this

indication, with the potential to benefit military personnel and civilians. Importantly, we also

received orphan drug designation for RYANODEX for the treatment of organophosphate

exposure (nerve agents).

Another potential indication for RYANODEX currently under study is Acute Radiation Syndrome,

a serious illness that can occur when a person is exposed to very high levels of radiation, usually

over a short period of time. In a proof-of-concept study in a Total Body Irradiation Animal Model,

the RYANODEX treatment group experienced less mortality post treatment compared with

nontreated animals. This indication will likely be developed under FDA’s animal rule, and Eagle

plans to run another animal model this year.

To further investigate potential applications for RYANODEX, Eagle joined forces with two

prestigious institutions on exciting research initiatives:

We entered into a research agreement with NorthShore University HealthSystem to study the

potential use of RYANODEX in the treatment of traumatic brain injury, which includes

concussion, working with the world-renowned neurologist, Dr. Julian Bailes, Chairman of

NorthShore’s Department of Neurology and Co-Director of the NorthShore Neurology Institute.

As part of this collaboration, we will further explore our hypothesis that RYANODEX may have the

potential to modulate some of the mechanisms that result in neuron cell damage and death. A

readout of that data is expected later this year. After completion of the study, we plan to meet

with FDA and discuss the path forward, including the design of our human studies.

Our other significant new partnership is with the University of Pennsylvania (“UPenn”) for the

development of EA-112 (dantrolene sodium) for Alzheimer’s disease. The data we and UPenn

shared at the 2019 Alzheimer's Association International Conference in July was a proof-of-

concept preclinical study, and demonstrated that intranasal administration of dantrolene

sodium had a positive effect on memory and cognition in an animal study. The results showed

improvement in behavioral tests, such as cognition and memory in a mouse model of

Alzheimer’s disease. We believe that exploring the unique role of calcium dysregulation in

Alzheimer’s disease represents a completely novel approach to the treatment, and we expect

that readouts from this preclinical study will be available in approximately 12 months.

As we continue studying dantrolene sodium, we are also developing the next generation of

ryanodine receptor antagonists, capable of intramuscular (“IM”) delivery. The IM formulation

offers several benefits, including easier and more rapid administration in emergency situations,

point-of-care administration to patients in need, and the elimination of the need for an

intravenous infusion.

Other pipeline advancements include what we view as another very important product,

vasopressin. Eagle is the first to file an ANDA referencing VASOSTRICT, 20 units/1mL. We remain

confident that if Eagle prevails in court and receives FDA approval, that we could bring this

product to market as early as October 2020.

Concluding Thoughts

In 2019, Eagle continued to build its foundation for long-term growth. We invested our cash to

advance our portfolio of product candidates, and we are strategically leveraging our robust

internal capabilities as well as complementary external scientific and research partnerships.

Looking ahead, we aim to capitalize on the momentum from 2019 that has continued in 2020.

Our efforts are paying off, as evidenced by the recent flow of positive company developments.

We look forward to several upcoming data readouts that will help us advance these important

initiatives.

We entered 2020 with ten projects under way, and the potential for five commercial launches in

the next three years. Add to that the potential of RYANODEX in the treatment of patients with

COVID-19, and possibly other viruses. We are proud and enthusiastic about the opportunities

ahead. We thank you for your support, as we continue to build value in our company and bring

life-saving products to address a variety of patient needs.

At this very challenging time for our country and for the world, we hope that you and your

families remain healthy and safe.

Sincerely,

Scott Tarriff

CHIEF EXECUTIVE OFFICER

EAGLE PHARMACEUTICALS, INC.

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BOARD OF DIRECTORS

Michael Graves Chairman of the Board

Scott Tarriff Chief Executive Officer

Richard Edlin, J.D.

Robert Glenning

Steven Ratoff

Jennifer Simpson, PhD

EXECUTIVE OFFICERS & MANAGEMENT TEAM

Scott Tarriff Founder, Chief Executive Officer, Director

David Pernock President and Chief Operating Officer

Pete Meyers Chief Financial Officer

Michael Cordera Executive Vice President, General Counsel, Chief Compliance Officer

Adrian Hepner, MD, Ph.D. Executive Vice President and Chief Medical Officer

Daniel O’Connor Executive Vice President – Chief Strategy Officer, Head of Corporate Development

Michael Moran Executive Vice President – Head of Sales, Business Development and Government Affairs

REGISTRAR & TRANSFER AGENT

American Stock Transfer & Trust Company 6201 15th Avenue Brooklyn, NY 11219 718-921-8200

SECURITIES & RELATED INFORMATION

The Company’s common stock is listed on the Nasdaq Stock Exchange under the symbol “EGRX”.

ANNUAL MEETING

The annual meeting of stockholders will be held on Tuesday, June 23, 2020 at 10 a.m. in the offices of our outside counsel, Cooley LLP, 55 Hudson Yards, 44th Floor, New York, NY 10001-1304.

STOCKHOLDER INFORMATION

Stockholders, investors, and analysts interested in corporate information may contact: In-Site Communications, Inc. Lisa Wilson 212-452-2793

WEBSITE

Information about Eagle Pharmaceuticals, Inc. may be obtained on our website at www.eagleus.com. Investors interested in Eagle Pharmaceuticals, Inc. stock quotes, news releases, SEC filings and other corporate information may click on the Investors link on our website.

This annual report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, statements regarding future events such as expected financial performance and future business or product developments, such as the success of sales and marketing efforts in connection with BENDEKA®, BELRAPZO®, RYANODEX® and PEMFEXY™; the success of development efforts with respect to pemetrexed, vasopressin, EA-111, EA-112, EA-114, SM-88 and EP-4104; the success of Eagle’s collaborations with its partners, including Hackensack University Medical Center, the United States Army Medical Research Institute of Chemical Defense, the University of Pennsylvania, Teva, Tyme and NorthShore University HealthSystem and the parties’ ability to work effectively together; the potential benefits, antiviral activity and efficacy of RYANODEX®, including the potential for RYANODEX® to be a possible therapeutic option for COVID-19; the progress and development of RYANODEX® in a clinical trial in patients with COVID-19, including the ability to enroll patients in the trial, timing for completion and reporting of results; the expectations for regulatory submissions and approvals with respect to Eagle’s product candidates; the anticipated approval of SymBio’s product, TREAKISYM, and whether such approval will be granted on the anticipated timeline, or at all; Eagle’s timing and ability to repurchase additional shares of Eagle’s common stock, if any, under its share repurchase program; Eagle’s expectations or assumptions regarding the outcome of any additional litigation involving BENDEKA®, including, but not limited to, any appeals with respect to the U.S. District Court for the District of Delaware’s patent decision in favor of Eagle and Teva for BENDEKA®; Eagle’s ability to deliver value in 2020 and over the long term; and the continued growth of Eagle’s research programs and product pipelines and any statements or assumptions underlying any of the foregoing. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond Eagle’s control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Such risks include, but are not limited to: whether Eagle will incur unforeseen expenses or liabilities; whether the FDA will ultimately approve the products in its pipeline for any indications; whether Eagle can successfully market and commercialize its product candidates, including RYANODEX®, BENDEKA® and BELRAPZO®, in the treatment of any indications; that results from in vitro laboratory tests are not necessarily predictive of future clinical trial and in vivo results; fluctuations in the trading volume and market price of shares of Eagle’s common stock and management’s determination of alternative needs and uses of Eagle’s cash resources, all of which may affect Eagle’s long-term performance; the outcome of litigation involving any of Eagle’s products or that may have an impact on Eagle’s business; the strength and enforceability of Eagle’s intellectual property rights or the rights of third parties; competition from other pharmaceutical and biotechnology companies and the potential for competition from generic entrants into the market; the risks inherent in the early stages of drug development and in conducting clinical trials; and other factors that are discussed in Eagle’s filings with the Securities and Exchange Commission. Forward-looking statements in this annual report should be evaluated together with the many risks and uncertainties that affect Eagle’s business, particularly those identified in the “Risk Factors” section of Eagle’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 2, 2020 and its other subsequent filings with the Securities and Exchange Commission. All forward-looking statements contained in this annual report speak only as of the date on which they were made. Except to the extent required by law, Eagle undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

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2019 annual report€¦ · eagle pharmaceuticals 2019 and recent accomplishments 9 generated 2019...

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