Forward Pharma Reports Financial and Operational Results from the Year Ended December 31, 2020
COPENHAGEN, Denmark, April 14, 2021 (GLOBE NEWSWIRE) -- 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)|
|Research and development||$||(327||)||$||(1,049||)|
|General and administrative||(3,059||)||(4,234||)|
|Operating loss (1)||(3,386||)||(5,283||)|
|Foreign exchange (loss) gain, net||(2,970||)||759|
|Other finance (expense) income, net||(93||)||303|
|Net loss per share, basic and diluted||$||(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 $2.1 million for the year ended December 31, 2019.
|Forward Pharma A/S|
|Condensed Consolidated Statement of Financial Position|
|December 31,||December 31,|
|Cash and cash equivalents||$||79,087||$||77,598|
|Equity and Liabilities:|
|Total equity and liabilities||$||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/S
Claus Bo Svendsen, MD, PhD
Chief Executive Officer
+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.