pSivida Corp. Form 10-Q Summary
Reporting period: Three months ended September 30, 2015 (the company’s fiscal first quarter of 2016), filed November 6, 2015. The filing identifies the registrant as pSivida Corp.; this differs from the request metadata naming Eyepoint, Inc.
Business context
pSivida develops sustained-release drug-delivery products, primarily for eye diseases. Medidur, its lead independent candidate for posterior uveitis, was in two Phase III trials. ILUVIEN, licensed to Alimera for diabetic macular edema, was being sold in the U.S. and certain European markets; pSivida also received royalties from Retisert sales.
Financial results and liquidity
Amounts below are in millions of dollars except per-share data.
| Metric | Q1 FY2016 | Q1 FY2015 |
|---|---|---|
| Revenue | $0.466 | $25.307 |
| Operating expenses | $5.450 | $4.518 |
| Operating income (loss) | $(4.984) | $20.789 |
| Net income (loss) | $(4.933) | $20.566 |
| Basic and diluted EPS | $(0.17) | $0.70 basic; $0.67 diluted |
| Operating cash flow | $(4.493) | $(3.994) |
- Cash and cash equivalents were $14.088 million; marketable securities were $9.917 million. Combined cash and securities totaled approximately $24.0 million at September 30, down from $28.535 million at June 30, 2015.
- Total assets were $27.460 million and total liabilities were $8.637 million. Current assets of $25.163 million exceeded current liabilities of $2.993 million. The company reported no borrowings or credit facilities.
- Net cash used in investing was $0.546 million, primarily reflecting net purchases of marketable securities. Financing provided $0.009 million from stock-option exercises.
Material changes and management commentary
- Revenue fell $24.841 million year over year, chiefly because the prior-year quarter included a one-time $25.0 million milestone following FDA approval of ILUVIEN. Current-quarter revenue included $0.157 million of Alimera sublicense consideration and $0.286 million of royalties. pSivida received no net-profit share from Alimera’s direct ILUVIEN sales in either quarter.
- Research and development expense rose 25% to $3.482 million, primarily due to higher contract research organization costs for Medidur. General and administrative expense rose 13% to $1.968 million, mainly on higher professional fees and stock-based compensation.
- Management expected available capital and anticipated inflows under existing collaborations to fund planned operations into early calendar 2017. This estimate excluded potential ILUVIEN commercialization receipts. Funding beyond that point, including completion of Medidur development, was expected to depend on collaboration receipts and/or additional agreements or financing.
- Management expected significant Medidur development spending to continue. It planned to submit a Medidur NDA in the first half of 2017, contingent on trial and inserter-study data.
Risks, contingencies, and other items
- The company had a history of operating losses and an accumulated deficit of $275.599 million. It warned that future revenue was uncertain and that additional financing might be needed; equity financing could dilute shareholders, while debt or collaboration financing could have unfavorable terms.
- Key risks included Medidur trial outcomes and regulatory timing, ILUVIEN market acceptance and reimbursement, changes in Retisert royalties, access to capital, and development and commercialization execution. The filing reported no material changes to the risk factors in its latest Form 10-K.
- Routine legal proceedings were not expected by management to materially affect results. The filing reported no material off-balance-sheet arrangements and no material changes in internal control over financial reporting; disclosure controls were assessed as effective at a reasonable-assurance level.
- The quarter included a $0.041 million income tax benefit; historical losses led the company to maintain a valuation allowance against net deferred tax assets.
Important facts for investors to verify
- Whether Alimera generates net-profit-share or sublicense payments for pSivida, and the timing and amount of any such receipts.
- Medidur Phase III progress, trial results, inserter-study data, and whether the stated first-half 2017 NDA timetable remains achievable.
- Cash burn versus the projected early-2017 funding horizon, including any financing plans or changes in planned spending.
- ILUVIEN sales, reimbursement and market acceptance, and Retisert royalty trends.
- The filing period and registrant identity: this source is pSivida’s quarter ended September 30, 2015, not a filing identified in its text as Eyepoint, Inc.