Business context and reporting period
The filing is pSivida Corp.’s unaudited Form 10-Q for the quarter ended December 31, 2012, the second quarter of its fiscal year. The request metadata names EyePoint, Inc.; the filing itself identifies the registrant as pSivida Corp. The company develops sustained-release drug-delivery products, primarily for chronic eye diseases.
Financial results and liquidity
Amounts below are in U.S. dollars; financial statement amounts are in millions except per-share data.
| Metric | Three months ended Dec. 31, 2012 | Six months ended Dec. 31, 2012 |
|---|---|---|
| Revenue | $0.585 | $1.138 |
| Operating expenses | $3.233 | $6.376 |
| Operating loss | $(2.648) | $(5.238) |
| Net loss | $(2.608) | $(5.159) |
| Net loss per share, basic and diluted | $(0.11) | $(0.23) |
| Cash used in operating activities | Not stated for quarter | $(3.403) |
At December 31, 2012, cash and cash equivalents were $9.409 million and marketable securities were $6.311 million, totaling $15.720 million in liquid resources. Current assets were $16.810 million against current liabilities of $2.083 million. Total liabilities were $7.232 million, principally deferred revenue; the company reported no borrowings or credit facilities. Management expected available resources and anticipated Bausch & Lomb royalties to fund current plans into the first quarter of calendar 2014, including planned Phase III uveitis trials.
Material changes versus prior comparable periods
- Quarterly revenue declined 7% year over year to $0.585 million; six-month revenue fell 50% to $1.138 million. The six-month comparison was affected by $1.1 million of prior-year revenue recognized after the Intrinsiq license termination and lower Pfizer collaboration revenue. Quarterly royalties also declined, while six-month royalties increased to $0.774 million from $0.624 million.
- Six-month net loss narrowed to $5.159 million from $19.887 million, largely because the prior-year period included a $14.830 million intangible-asset impairment. The current period still recorded an operating loss.
- Six-month operating cash use improved to $3.403 million from $5.020 million. Cash increased $4.784 million, including $4.669 million net proceeds from an August 2012 stock-and-warrant offering.
- Common shares outstanding rose to 23.297 million from 20.803 million at June 30, 2012. The offering also issued warrants to purchase 623,605 shares.
Outlook, commentary, risks and unusual items
- Alimera had EU marketing authorizations for ILUVIEN for diabetic macular edema in the U.K., Austria, France, Germany, Portugal and Spain, with Italy recommended. Alimera planned launches in Germany, the U.K. and France during 2013, subject to commercialization and pricing/reimbursement progress. Its U.S. application had received an FDA Complete Response Letter; Alimera intended to respond in the first quarter of 2013. A $25 million milestone to pSivida would be due following FDA approval, but timing and approval were uncertain.
- pSivida planned to begin two Phase III trials for its posterior uveitis micro-insert during fiscal 2013. Management said R&D spending could increase significantly depending on the timing of those trials. An investigator-sponsored Phase I/II study of the latanoprost product was ongoing; Pfizer held an option to license it subject to agreement terms.
- The company reported a history of operating losses and said operations beyond early 2014 would depend on collaboration receipts, product commercialization and/or additional financing. It warned that financing might not be available on acceptable terms and that equity financing could dilute shareholders.
- Other significant uncertainties include regulatory outcomes, clinical efficacy and safety, market acceptance, partner funding and performance, and potential further intangible-asset impairment. The filing reports no material changes to previously disclosed risk factors, no material off-balance-sheet arrangements, and routine legal claims that management did not expect to have a material effect.
Important facts for investors to verify
- Confirm issuer identity and security: this source is a pSivida Corp. filing, despite the EyePoint name in the request metadata.
- Check subsequent FDA actions and the status of Alimera’s U.S. resubmission, EU launches, reimbursement, and any resulting revenue or milestone payments.
- Track whether the planned Phase III posterior uveitis trials began, their funding requirements, and resulting cash runway.
- Review actual operating cash burn, collaboration and royalty receipts, and financing needs against management’s stated runway into early 2014.
- Assess dilution from the August 2012 offering and outstanding warrants and options.