Forward Pharma A/S (NASDAQ:FWP) (“We,” “Forward” or the “Company”
and, together with its subsidiaries, the “Group”), today reported
consolidated financial results for the year ended December 31,
2020. Our net loss for the year ended December 31, 2020 was $6.4
million, or $0.07 per share, versus a net loss of $4.2 million, or
$0.04 per share for the year ended December 31, 2019. Our
research and development and general and administrative costs
decreased from $5.3 million for the year ended December 31, 2019 to
$3.4 million for the year ended December 31, 2020. Our net loss for
the year ended December 31, 2020 was unfavorably impacted by a
significant non-cash foreign exchange loss of $3.0 million that is
primarily related to our U.S. Dollar cash holdings and the
weakening of the U.S. Dollar compared to the Danish Kroner.“We
continue to be well positioned financially as we enter into 2021
with cash holdings of $79.1 million and working capital of $78.6
million. We believe we have the financial strength to fund
operations beyond 2021 and focus on the oral proceedings before the
Technical Board of Appeals that are scheduled for September 6, 2021
after two postponements caused by the ongoing coronavirus
pandemic,” said Dr. Claus Bo Svendsen, Chief Executive Officer of
Forward.
Operating Results for the Year Ended December 31,
2020
Research and development costs for the years ended
December 31, 2020 and 2019 were $327,000 and
$1.0 million, respectively. The decrease in research and
development costs for the year ended December 31, 2020 is the
result of lower costs incurred in connection with the EP2801355
patent (“355 Patent”) opposition in Europe (“Opposition
Proceeding”) and lower share-based compensation.
General and administrative costs for the years ended
December 31, 2020 and 2019 were $3.1 million and
$4.2 million, respectively. The decrease in general and
administrative costs in the year ended December 31, 2020
resulted from lower share-based compensation.
During the year ended December 31, 2020, the Group recognized a
foreign exchange loss of $3.0 million, resulting primarily from the
weakening of the U.S. Dollar compared to the Danish Kroner during
the period. During the year ended December 31, 2019, the Group
recognized a foreign exchange gain of $759,000, resulting primarily
from the strengthening of the U.S. Dollar compared to the Danish
Kroner during the period.
Other finance (expense) income primarily includes bank fees, or
negative interest, on Euro and Danish Kroner cash holdings net of
interest income on U.S. Dollar cash holdings.
Financial Position as of December 31, 2020
As of December 31, 2020, we have $79.1 million in cash and cash
equivalents and our working capital is $78.6 million. We believe we
have sufficient liquidity to allow us to meet our planned operating
activities in the normal course of business beyond the year ending
December 31, 2021. Unforeseen events could negatively affect our
ability to fund planned operations in the future.
Update on Intellectual Property Proceedings
On January 29, 2018, the Opposition Division of the
European Patent Office (“EPO”) concluded the oral proceedings
concerning the ‘355 Patent. The Opposition Division revoked the
‘355 Patent after considering third-party oppositions from several
opponents. On March 22, 2018, the Opposition Division issued
its detailed reasons for the decision. On May 7, 2018, the Company
appealed the Opposition Division’s decision to the Technical Board
of Appeal (“TBA”) of the EPO and filed its detailed grounds of
appeal on August 1, 2018. On July 8, 2019, the Company received
notice from the EPO that the appeal would be heard by the TBA of
the EPO on June 18, 2020 (the “2020 Hearing”). As a result of the
ongoing coronavirus pandemic, the 2020 Hearing has been postponed
twice and is now scheduled to occur on September 6, 2021.
Management expects the TBA to issue a ruling on the same day as the
hearing with a fully argued decision approximately two months
following the hearing.
If the Company receives a favorable ruling following the
hearing, it is expected that the TBA will remand the case to the
Opposition Division, in order for the Opposition Division to
resolve the remaining elements of the original opposition.
Management estimates that the Opposition Division would take
approximately two to three years to resolve the remaining elements
of the original opposition. However, delays can occur that would
extend the time needed for the Opposition Division to reach a
conclusion on the remaining elements of the original opposition.
The Company is not entitled to any royalty payments from the
License Agreement until and unless all remaining elements of the
original opposition are resolved in the Company’s favor. As such,
the earliest time the Company may expect to receive any revenues
from the License Agreement, if at all, is 2024.
If the Company receives an unfavorable ruling following the
hearing on September 6, 2021, it would, for all practical purposes,
represent an unsuccessful outcome of the Opposition Proceeding,
resulting in no royalties being due to the Company from Biogen
based on Biogen’s future net sales outside the United States, as
defined in the License Agreement. The Company may request a
rehearing of the September 6, 2021 hearing with the Enlarged Board
of Appeal of the EPO in an effort to overturn the unfavorable
outcome, but the likelihood of getting a rehearing is low. The
denial of a request to rehear would end the Opposition Proceeding
in favor of the opponents.
Annual Report on Form 20-F
Investors are encouraged to read Forward’s Annual Report on Form
20-F that was filed today with the U.S. Securities and Exchange
Commission. Forward’s Annual Report includes important information
about the Group that is not disclosed herein including, but not
limited to, risk factors and our audited financial statements as of
December 31, 2020 and 2019 and for each of the years ended December
31, 2020, 2019 and 2018.
|
Forward
Pharma A/S |
Condensed Consolidated Statement of Profit or
Loss |
|
(in
thousands, except per share amounts) |
|
|
|
|
Year Ended |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
Research and development |
$ |
(327 |
) |
|
$ |
(1,049 |
) |
General and administrative |
|
(3,059 |
) |
|
|
(4,234 |
) |
Operating loss (1) |
|
(3,386 |
) |
|
|
(5,283 |
) |
|
|
|
|
|
|
|
|
Foreign exchange (loss) gain, net |
|
(2,970 |
) |
|
|
759 |
|
Other
finance (expense) income, net |
|
(93 |
) |
|
|
303 |
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(6,449 |
) |
|
$ |
(4,221 |
) |
|
|
|
|
|
|
|
|
Net
loss per share, basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
Weighted average number of shares used to compute net loss per
share basic and diluted |
|
95,997 |
|
|
|
95,074 |
|
|
|
|
|
|
|
|
|
(1) Non-cash share-based compensation included
in operating expenses totaled $334,000 for the year ended December
31, 2020 and $2.1 million for the year ended December 31, 2019.
Forward
Pharma A/S |
Condensed Consolidated Statement of Financial
Position |
(in
thousands) |
|
|
|
|
|
|
|
|
|
December 31, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
Assets: |
|
|
|
|
|
Cash and cash
equivalents |
$ |
79,087 |
|
$ |
77,598 |
Other
assets |
|
627 |
|
|
567 |
Total
assets |
$ |
79,714 |
|
$ |
78,165 |
|
|
|
|
|
|
Equity and
Liabilities: |
|
|
|
|
|
Shareholders'
equity |
$ |
78,644 |
|
$ |
77,569 |
Liabilities |
|
1,070 |
|
|
596 |
Total equity
and liabilities |
$ |
79,714 |
|
$ |
78,165 |
|
|
|
|
|
|
About Forward Pharma:Forward Pharma
A/S is a Danish biopharmaceutical company that commenced
development in 2005 of a proprietary formulation of DMF for the
treatment of inflammatory and neurological indications. The
Company granted to Biogen an irrevocable license to all of its IP
through the License Agreement and received from Biogen a
non-refundable cash fee of $1.25 billion in February
2017, with the return of EUR 917.7 million to shareholders through
a capital reduction in September 2017. The Company has the
opportunity to receive royalties from Biogen on Biogen’s net sales
of Tecfidera® or other DMF products for multiple sclerosis
outside the U.S., dependent on, among other things, a favorable
outcome in Europe with respect to the ‘355 Patent Opposition
Proceeding, including any appeal thereto.
The principal executive offices are located at Østergade 24A,
1st floor, 1100 Copenhagen K, Denmark and our American Depositary
Shares are publicly traded on the Nasdaq Capital Market (FWP). For
more information about the Company, please visit our website at
http://www.forward-pharma.com.
Forward Pharma A/S Investor Relations
Contact:Forward Pharma A/SClaus Bo Svendsen, MD, PhDChief
Executive Officer
Investor Relationsinvestors@forward-pharma.com
Solebury TroutJohn Grazianojgraziano@troutgroup.com +1
(646) 378 2942
Forward Pharma A/S
Forward Looking Statements:
Certain statements in this press release may constitute
“forward-looking statements” of Forward Pharma A/S within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to,
statements which contain language such as “believe,” “expect,”
“anticipate,” “estimate,” “would,” “may,” “plan,” and “potential.”
Forward-looking statements are predictions only, which involve
known and unknown risks, uncertainties and other factors that may
cause actual results to be materially different from those
expressed in such statements. Many such risks, uncertainties and
other factors are taken into account as part of our assumptions
underlying these forward-looking statements and include, among
others, risks related to the following: the satisfaction of certain
conditions, and the accuracy of certain representations of the
Company, in the Settlement and License Agreement entered into with
subsidiaries of Biogen Inc. and certain other parties thereto; our
ability to obtain, maintain, enforce and defend issued patents with
royalty-bearing claims; our ability to prevail in or obtain a
favorable decision in the ‘355 patent European Opposition
Proceeding, after all appeals; the expected timing for key
activities and an ultimate ruling in such legal proceedings; the
issuance and term of our patents; future sales of Tecfidera®,
including impact on such sales from competition, generic
challenges, regulatory involvement and pricing pressures; the
scope, validity and enforceability of our intellectual property
rights in general and the impact on us of patents and other
intellectual property rights of third parties; our ability to
defend our tax filing positions; and the sufficiency of the
Company's cash resources. Certain of these and other risk factors
are identified and described in detail in certain of our filings
with the United States Securities and Exchange Commission,
including our Annual Report on Form 20-F for the year ended
December 31, 2020. We are providing this information as of the date
of this release and do not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise.
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