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Aratana records $3.8m revenues in Q1


May 11, 2017 - Animal Pharm

By Sian Lazell
Animal Pharm
May 9, 2017

Aratana Therapeutics has posted revenues of $3.8 million during the first quarter of 2017, following significant turnover generated from its debut product launch.

Sales in Q1 were up by around $3.6m compared from $172,000 recorded in the same quarter last year. The Kansas-based firm said the increase primarily included around $2.5m related to Galliprant product sales as finished goods.

Galliprant – a treatment for the control of pain and inflammation associated with osteoarthritis in dogs – was Aratana's debut US product approval, receiving authorization in March 2016. Elanco subsequently signed a deal with Aratana that saw the former gain the animal health rights to the product. Aratana continues to expects EU marketing authorization of Galliprant as early as H2 2017. 

Specifically, sales in Q1 2017 included $903,000 in licensing and collaboration revenues related to Galliprant, and $327,000 in net sales of Nocita. Nocita (bupivacaine liposome injectable suspension) is indicated for local post-operative analgesia for cranial cruciate ligament surgery in dogs and was made available to US veterinarians in October 2016.

Aratana has completed a pivotal target animal safety study of bupivacaine liposome injectable suspension for post-operative pain management in cats and has an ongoing US FDA-concurred pivotal field effectiveness study, with results expected by mid-2017.

Cost of sales up, R&D down

Cost of product sales increased significantly to $3.1m in the first quarter of 2017, compared to $19,000 during Q1 2016.

Aratana said the increase was primarily due to cost of product sales of Nocita, and Galliprant initial validation supply produced at higher prices and sold to Elanco for commercial distribution.

The firm added that cost of product sales is expected to increase in 2017 due to anticipated full year sales of Nocita and Galliprant, and anticipated partial year sales of Entyce.

Entyce is an appetite stimulant for dogs. Aratana recently delayed commercial launch of the product due to transfer of manufacturing to a new vendor. It is working with the FDA to ensure Entyce is launched before the end of 2017.

Aratana said it believes the cost of product sales as a percent to overall product revenues will improve as it moves therapeutics to full commercial manufacturing scale over time.

Despite the increase in cost of product sales, net loss was down 30% to $12.6m in Q1. R&D expenses also decreased 56% to $4.7m.

As of March 31, 2017, Aratana had approximately $68.4m in cash, cash equivalents, restricted cash and short-term investments. During the first quarter, the firm's cash utilization included around $5m of payments for inventory purchases and a $3m milestone payment for the first product sale of Galliprant.

Sale of shares to support Entyce

Aratana recently entered into a Securities Purchase Agreement with certain investors for the sale of five million shares at a purchase price of $5.25 per share (registered direct offering). Subject to closing conditions, the offering is expected to close on May 9, 2017.

The firm expects to receive net proceeds from the offering of approximately $24.4m. It said it intends to use the finance generated from the offering for general corporate purposes, including commercial activities related to Entyce and Galliprant inventory.

Full-year outlook

Aratana estimates full-year operating expenses for 2017 will be approximately $45m, including around $10m of non-cash expenses. It added these non-cash expenses are expected to be further offset by contractual milestones and working capital expenditures, net of modest positive gross margins, totaling approximately $10 million. The firm predicts this will result in approximately $45m of cash used in operations and investing activities during 2017.

Additionally, Aratana believes its existing cash, cash equivalents, short-term investments and restricted cash of $68.4m – combined with proceeds from its recent shares offering – will fund current operating plan and debt obligations through until at least 2018.

Steven St Peter, managing director, president and chief executive of Aratana, said: "It's rewarding to see our recently launched therapeutics gaining traction in veterinary clinics across the US. We remain focused on preparing for the anticipated launch of Entyce by this fall and we continue to advance the development of other therapeutic candidates."

Other candidates in Aratana's pipeline include AT-014 which is being developed as a treatment for canine osteosarcoma. The company expects conditional licensure of AT-014 by the USDA in H2 2017.

Additionally, Aratana is collaborating with VetStem BioPharma on the development of AT-016. VetStem initiated a pivotal target animal safety study of AT-016 – an adipose-derived allogeneic stem cell candidate for osteoarthritis pain in dogs – in April 2017. Aratana anticipates results from the study and results from an FDA-concurred pivotal field effectiveness study in 2017.

Reprinted with permission of Animal Pharm News

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