Avedro, Inc. (Nasdaq: AVDR) (Avedro), today reported financial
results for the quarter ended September 30, 2019.
Third Quarter Financial
ResultsRevenue for the quarter ended September 30, 2019
increased 38% to $11.0 million, from $8.0 million during the same
period in 2018. The increase in revenue was primarily driven by an
increase in U.S. revenue of $3.6 million, partially offset by a
$0.6 million decrease in non-U.S. revenue.
Gross margin was 78.2% for the third quarter of 2019, as
compared to 64.3% for the same period in 2018.
Operating expenses for the third quarter of 2019 increased 63%
to $16.8 million, compared to $10.3 million in the third quarter of
2018. The increase in operating expenses was primarily driven by
legal and acquisition-related costs of $2.8 million associated with
the proposed transaction with Glaukos Corporation (“Glaukos”), with
the remaining increase associated with the expansion of our sales
and reimbursement teams, an increase in research and development
expenses from ongoing clinical trials and costs of being a public
company.
Operating loss was $8.1 million for the third quarter of 2019,
as compared to $5.1 million for the same period in 2018.
Net loss was $9.1 million for the third quarter of 2019, as
compared to $5.6 million for the same period of 2018.
As of September 30, 2019, cash and cash equivalents were $52.1
million.
Due to the pending proposed transaction with Glaukos, Avedro
management has suspended financial guidance for 2019 and will not
hold a conference call to discuss these third quarter 2019
results.
About Avedro, Inc.Avedro is a leading hybrid
ophthalmic pharmaceutical and medical technology company focused on
treating corneal disease and disorders and improving vision to
reduce dependency on eyeglasses or contact lens. Avedro’s
proprietary bio-activated pharmaceuticals strengthen, stabilize,
and reshape the cornea to treat corneal ectatic disorders and
correct refractive conditions. Avedro’s suite of single-use drug
formulations are applied to the cornea and bio-activated to induce
a reaction called corneal collagen cross-linking.
Additional Information and Where to Find It
In connection with the proposed transaction between Avedro and
Glaukos, Glaukos has filed with the U.S. Securities and Exchange
Commission (the “SEC”) a registration statement on Amendment No. 1
to Form S-4 that included a document constituting a
prospectus of Glaukos and also contained a definitive proxy
statement of Avedro. Avedro and Glaukos also plan to file other
relevant documents with the SEC regarding the proposed transaction.
After the registration statement on Amendment No. 1 to Form S-4 was
declared effective by the SEC, a definitive proxy
statement/prospectus was mailed to the stockholders of Avedro.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors and security holders are able to obtain free
copies of the registration statement on Form S-4 and the
proxy statement/prospectus and other relevant documents filed or
that will be filed by Avedro or Glaukos with the SEC through the
website maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by Glaukos are available free of
charge within the Investor Relations section of Glaukos’ internet
website at https://investors.glaukos.com or by contacting Glaukos
Investor Relations by email at investors@glaukos.com or by phone at
949-481-0510. Copies of the documents filed with the SEC by Avedro
are available free of charge within the Investor Relations section
of Avedro’s internet website at https://investors.avedro.com or by
contacting Avedro Investor Relations by email at
investors@avedro.com or by phone at 646-924-1769.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities nor a solicitation
of any vote or approval with respect to the proposed transaction or
otherwise. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
Participants in the Solicitation
Each of Avedro and Glaukos and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from Avedro stockholders in connection with
the proposed transaction. Information about Avedro’s directors and
executive officers is included in Avedro’s Annual Report on Form
10-K for the year ended December 31, 2018, which was filed with the
SEC on March 21, 2019, and is also included in Avedro’s Form S-1
Registration Statement filed with the SEC on January 18, 2019, as
amended by Amendment No. 1 to Avedro’s Form S-1 Registration
Statement filed with the SEC on February 4, 2019. Information about
Glaukos’ directors and executive officers is included in its
definitive proxy statement for its 2019 annual meeting of
stockholders, which was filed with the SEC on April 17, 2019. Other
information regarding the participants in the solicitation of
proxies in connection with the proposed transaction and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the proposed transaction when they become
available. Investors may obtain free copies of these documents from
Avedro or Glaukos as indicated above.
Use of Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of federal securities laws. Forward-looking statements
may contain words such as “believes”, “anticipates”, “estimates”,
“expects”, “intends”, “aims”, “potential”, “will”, “would”,
“could”, “considered”, “likely” and words and terms of similar
substance used in connection with any discussion of future plans,
actions or events identify forward-looking statements. All
statements, other than historical facts, including statements
regarding the expected timing of the closing of the proposed
transaction and the expected benefits of the proposed transaction,
are forward-looking statements. These statements are based on
management’s current expectations, assumptions, estimates and
beliefs. While Avedro and Glaukos believe these expectations,
assumptions, estimates and beliefs are reasonable, such
forward-looking statements are only predictions, and are subject to
a number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements.
The following factors, among others, could cause actual results
to differ materially from those described in the forward-looking
statements: (i) failure of Avedro to obtain stockholder approval as
required for the proposed transaction; (ii) failure to obtain
governmental and regulatory approvals required for the closing of
the proposed transaction; (iii) failure to satisfy the conditions
to the closing of the proposed transaction; (iv) unexpected costs,
liabilities or delays in connection with or with respect to the
proposed transaction; (v) the effect of the announcement of the
proposed transaction on the ability of Avedro or Glaukos to retain
and hire key personnel and maintain business relationships with
customers, suppliers and others with whom Avedro or Glaukos does
business, or on Avedro’s or Glaukos’ operating results, market
price of common stock, and business generally; (vi) potential legal
proceedings relating to the proposed transaction and the outcome of
any such legal proceeding; (vii) the inherent risks, costs and
uncertainties associated with integrating the businesses
successfully and risks of not achieving all or any of the
anticipated benefits of the proposed transaction, or the risk that
the anticipated benefits of the proposed transaction may not be
fully realized or take longer to realize than expected; (viii)
competitive pressures in the markets in which Avedro and Glaukos
operate; (ix) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; and (x) other risks to the consummation of the proposed
transaction, including the risk that the proposed transaction will
not be consummated within the expected time period or at all.
Additional factors that may affect the future results of Avedro and
Glaukos are set forth in their respective filings with the SEC,
including each of Avedro’s and Glaukos’ most recently filed Annual
Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other filings with the SEC, which
are available on the SEC’s website at www.sec.gov. The risks and
uncertainties described above and in Avedro’s most recent Quarterly
Report on Form 10-Q and Glaukos’ most recent Quarterly Report on
Form 10-Q are not exclusive and further information concerning
Avedro and Glaukos and their respective businesses, including
factors that potentially could materially affect their respective
businesses, financial condition or operating results, may emerge
from time to time. Readers are urged to consider these factors
carefully in evaluating these forward-looking statements, and not
to place undue reliance on any forward-looking statements. Readers
should also carefully review the risk factors described in other
documents that Avedro and Glaukos file from time to time with the
SEC. The forward-looking statements in these materials speak only
as of the date of these materials. Except as required by law,
Avedro and Glaukos assume no obligation to update or revise these
forward-looking statements for any reason, even if new information
becomes available in the future.
Investor Contact:Brian Johnston or Lynn
LewisPhone: 631-807-1986investors@avedro.com
Avedro, Inc. |
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Condensed Statement of Operations |
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(in thousands, except per share data) |
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(unaudited) |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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Revenue |
$ |
11,046 |
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$ |
8,018 |
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$ |
30,108 |
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$ |
19,467 |
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Cost of goods
sold |
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2,404 |
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2,861 |
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7,469 |
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|
8,223 |
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Gross profit |
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8,642 |
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|
5,157 |
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22,639 |
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|
11,244 |
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Gross margin |
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78.2% |
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64.3% |
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75.2% |
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57.8% |
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Operating
expenses: |
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Selling, general
and administrative |
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12,966 |
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7,179 |
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33,654 |
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18,995 |
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Research and
development |
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3,809 |
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3,117 |
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11,995 |
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8,826 |
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Total operating expenses |
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16,775 |
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10,296 |
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45,649 |
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|
27,821 |
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Loss from
operations |
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(8,133 |
) |
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|
(5,139 |
) |
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(23,010 |
) |
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(16,577 |
) |
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Other expense,
net |
|
(932 |
) |
|
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(436 |
) |
|
|
(1,836 |
) |
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(2,133 |
) |
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Net loss |
$ |
(9,065 |
) |
|
$ |
(5,575 |
) |
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$ |
(24,846 |
) |
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$ |
(18,710 |
) |
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Net loss per
share, basic and diluted |
$ |
(0.52 |
) |
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$ |
(3.96 |
) |
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$ |
(1.74 |
) |
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$ |
(13.42 |
) |
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Weighted average
common shares |
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used to compute
net loss per share, |
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basic and
diluted |
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17,307,914 |
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1,408,540 |
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14,295,164 |
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1,393,833 |
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Avedro, Inc. |
Condensed Balance Sheet |
(in thousands) |
(unaudited) |
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September 30, |
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December 31, |
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2019 |
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2018 |
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Assets |
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Current
Assets |
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Cash & cash
equivalents |
$ |
52,146 |
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$ |
9,769 |
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Accounts
receivable, net |
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12,328 |
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|
4,725 |
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Inventories |
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4,482 |
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|
4,259 |
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Prepaid expenses
and other current assets |
|
3,264 |
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|
1,919 |
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Total current assets |
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72,220 |
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|
20,672 |
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Equipment and
furniture, net |
|
1,542 |
|
|
1,524 |
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Other non-current
assets |
|
769 |
|
|
3,671 |
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Total assets |
$ |
74,531 |
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$ |
25,867 |
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Liabilities,
convertible preferred stock and stockholders' equity
(deficit) |
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Current
liabilities |
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Accounts
payable |
$ |
1,483 |
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$ |
2,126 |
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Accrued expenses
and other current liabilities |
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7,106 |
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|
6,304 |
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Total current liabilities |
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8,589 |
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|
8,430 |
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Long-term
liabilities |
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Long-term
debt |
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20,489 |
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|
19,939 |
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Other non-current
liabilities |
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1,358 |
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|
2,663 |
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Total liabilities |
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30,436 |
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|
31,032 |
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Convertible
preferred stock |
|
- |
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|
68,423 |
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Total
stockholders' equity (deficit) |
|
44,095 |
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(73,588 |
) |
|
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Total liabilities,
convertible preferred stock and stockholders' equity |
$ |
74,531 |
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$ |
25,867 |
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