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Amryt Pharma PLC - FY 2019 RESULTS

RNS Number : 3690M
Amryt Pharma PLC
11 May 2020
 

May 11, 2020
AIM: AMYT
Euronext Growth: AYP

 

AMRYT PHARMA PLC

("Amryt" or the "Company")

FY 2019 RESULTS

·    Transformational year of performance and growth for Amryt

·    Aegerion integration completed successfully and ahead of schedule

·    Business performing ahead of expectations

·    Strong year end cash balances of $65.2M

·    Unaudited combined revenues of $154.1M in 2019, an increase of 13.1% on 2018 unaudited combined revenues of $136.3M1

·    The Company has also today separately issued Q1 results for 2020

 

Amryt, a global, commercial-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases, today announces audited results for the year ended December 31, 2019. These audited results include the full year results for Amryt which include contributions from the legacy Aegerion Pharmaceuticals, Inc. ("Aegerion") business beginning on the date of acquisition on September 24, 2019.

Dr Joe Wiley, CEO of Amryt, commented: "2019 was a truly transformational year for Amryt.  Post the Aegerion acquisition, we now have two substantial revenue-generating products which generated 2019 combined revenues of $154.1M representing a 13.1% increase on the 2018 combined revenues, an international commercial business in the US, Europe, the Middle East and Latin America, a strong pipeline of development and life-cycle opportunities in areas of significant high unmet medical need, and the financial flexibility to execute on our growth plans.  Amryt is now very well positioned to execute on our strategy of becoming a global leader in rare and orphan diseases and most importantly, delivering therapies to patients with high unmet needs.

 

I would like to take this opportunity to thank all our stakeholders for their commitment and support during 2019 and beyond."

 

2019 Financial Highlights:

 

The 2019 audited financial results reflect the acquisition of Aegerion from September 24, 2019 and are not reflective of the performance of the combined businesses for a full year. Total reported revenues of $58.1M reflect sales of the legacy Amryt business for the full financial year, plus sales of the acquired Aegerion business with effect from September 24, 2019. 

 

To aid comparison, we also report unaudited combined revenues1 that reflect the combined businesses, had they been integrated for a full financial year. On this basis, the unaudited combined revenues for 2019 would have been $154.1M representing a growth rate of 13.1% on 2018 unaudited combined revenues of $136.3M.

·   Myalept® / Myalepta® (metreleptin) generated revenues of $85.4M (2018: $71.4M) representing an increase of 19.6%

·   Juxtapid®/Lojuxta® (lomitapide) generated revenues of $68.0M (2018: $64.0M), representing a growth rate of 6.3%

·   The significant growth in metreleptin revenues was driven by the ongoing rollout of Myalepta® in Europe following the approval of the product by the European Medicines Agency in Q3 2018

 

1       Unaudited combined revenues for 2018 and 2019 represent the combined unaudited revenues of the Company assuming the acquisition by Amryt of Aegerion occurred on 1 January 2018. It also (i) excludes revenues from sales to end-users in Japan following the out-licencing of Juxtapid to Recordati in February 2019, (ii) excludes up-front payments from Recordati in 2019, and (iii) includes a 22.5% royalty on Japanese sales of Juxtapid from 1 January 2018 as if the Recordati agreement was in place from that date.

 

Statutory and adjusted 2019 results

 

US$M

2018

2019

Restructuring / Deal Costs Adjs2

Non-cash Items3

2019 Non-GAAP Adjusted

Revenue

17.1

58.1

-

-

58.1

Gross profit

10.8

16.1

2.5

22.2

40.8

R&D

(10.7)

(15.8)

-

-

(15.8)

SG&A

(17.3)

(35.5)

-

0.8

(34.7)

Restructuring & acquisition costs

-

(13.1)

13.1

-

-

Share based compensation expenses

(0.8)

(0.8)

-

0.8

-

Impairment charge

-

(4.7)

-

4.7

-

Operating loss before finance expense

(18.0)

(53.8)

15.6

28.5

(9.7)

Unrestricted cash & cash equiv.

9.9

65.2

-

-

65.2

2       Restructuring / deal cost adjustments includes the Amryt acquisition and deal related costs associated with the Aegerion acquisition, the subsequent restructuring costs during the period post the completion of the acquisition associated with the relocation of a number of functions from Boston and EMEA to Dublin, Ireland, and the removal of royalties paid by Amryt to Aegerion in the period prior to completion of the acquisition which become an intercompany payment post completion of the acquisition.

3       Non-cash items include amortisation of the acquired metreleptin and lomitapide intangible assets, amortisation of the inventory fair value step-up that was acquired at the acquisition date, depreciation and other amortisation, share based compensation expenses and the impairment of our AP102 asset.

 

As outlined in the table above, the operating loss for 2019 of $53.8M (2018 : $18.0M) includes the significant impact of restructuring and deal costs associated with the Aegerion acquisition and non-cash items including amortisation, impairment, depreciation and the impact of share based compensation expenses.  Operating losses before non-cash items and restructuring & deal costs in 2019 were $9.7M (operating loss for 2018:  $16.8M).

 

 

 

 

 

 

 

 

 

 

 

Financial Position:

In August 2019, Amryt raised gross proceeds of $8.0M by way of an interim equity placing. These proceeds were used to meet the Amryt legal, financial and other costs associated with the Aegerion acquisition which were payable at deal close. On completion of the acquisition in September 2019, Amryt raised an additional $57.0M net of fees by way of an equity placing.  This compares to the year-end unrestricted cash balance of $65.2M which was significantly ahead of expectations and reflects the strong performance of the business in the period since the acquisition of Aegerion.

 

In conjunction with the acquisition, Amryt re-structured the existing Amryt and Aegerion debt facilities. This resulted in Amryt repaying the EIB debt facility and putting in place a new five-year term loan of $81M and a new five and a half year convertible facility of $125.0M.  Amryt's debt maturity profile offers significant flexibility. No principal repayments are due on the term loan until September 2024 and on the convertible facility until April 2025.

 

2019 Business Highlights:

·    Amryt acquired Aegerion on September 24, 2019 creating a global commercial rare disease business with two approved products, which delivered $154.1M in unaudited combined revenues1 in 2019 

·    The Company's lead development candidate, FILSUVEZ® (AP101), is currently completing a pivotal Phase 3 prospective double-blind randomised placebo controlled study ("EASE") in patients with dystrophic and junctional EB. EASE is the largest ever global Phase 3 study conducted in patients with EB, operating across 55 sites in 27 countries globally.  In January 2019, Amryt reported the outcome of an unblinded interim efficacy analysis, at which point an Independent Data Monitoring Committee recommended that the trial should continue with an increase of 48 patients in the study to a total of 230 evaluable patients in order to achieve 80% statistical power.  On April 23, 2020, since the study was close to full enrolment and following expert statistical advice, the company announced the decision to close the EASE study to further recruitment and anticipates top-line data read out in late Q3 / early Q4 2020 

·    FILSUVEZ® received Fast-Track Designation from the U.S. Food and Drug Administration ("FDA") in September 2019 having previously received a Rare Pediatric Disease Designation. These designations from the FDA are designed to accelerate the development and review of products such as FILSUVEZ® and Amryt will be eligible to receive a Priority Review Voucher ("PRV") that can be used, sold or transferred if FILSUVEZ® is ultimately approved by the FDA.  The most recent confirmed sale of a PRV was in March 2020 for $108.1M 

·    AP103, is currently in preclinical development for the treatment of patients with Recessive Dystrophic EB, a subset of EB. AP103 is Amryt's first gene therapy product candidate based on our novel polymer-based topical gene therapy delivery platform, which also has potential use for the treatment of other rare genetic diseases. On January 7, 2019 Amryt announced that two pre-clinical studies showed that topical application of AP103 restored production of collagen VII in pre-clinical models of EB to levels exceeding those produced by healthy human keratinocytes and to levels similar to those observed following delivery with a viral vector. In addition, AP103 exhibited no evidence of cellular toxicity after repeated administration

·    Board Renewal - In September 2019 post completion of the Aegerion acquisition, Harry Stratford, Rory Nealon, James Culverwell and Markus Zeiner stood down from the Board. George Hampton, Dr Alain Munoz, Donald Stern, Dr Patrick Vink and Stephen Wills all joined the Board as Non-executive Directors with Ray Stafford becoming Non-executive Chairman

 

Post-Period End Highlights

Amryt has also today separately issued Q1 2020 results incorporating information on post-period end events. 

 

 

Management will host a conference call for analysts and investors today at 14.30 BST. Dial in details for the call are as follows - Conference ID: 3725306 | Ireland: (01) 431 9615 | UK/International: + 44 (0) 2071 928000 | US: + 1 631 510 7495.

 

A playback facility will be available approximately 4 hours after the call ends through May 25, 2020.  Playback details as follows: Conference ID: 3725306 | UK/International: +44 (0) 3333 00 9785 | US: + 1 917 677 7532.

 

Enquiries:                                                                                                                    

Amryt Pharma plc

+353 (1) 518 0200

Joe Wiley, CEO

Rory Nealon, CFO/COO

 

 

 

Shore Capital

+44 (0) 20 7408 4090

NOMAD and Joint Broker

 

Edward Mansfield, Daniel Bush, John More

 

 

 

Stifel

+44 (0) 20 7710 7600

Joint Broker

 

Jonathan Senior, Ben Maddison

 

 

 

Davy

+353 (1) 679 6363

ESM Adviser and Joint Broker

 

John Frain, Daragh O'Reilly

 

 

 

Consilium Strategic Communications

+44 (0) 20 3709 5700

Amber Fennell, Matthew Neal, Carina Jurs

 

 

 

LifeSci Advisors, LLC

+1 (212) 915 2564

Tim McCarthy

 

 

About Amryt

Amryt is a biopharmaceutical company focused on developing and delivering innovative new treatments to help improve the lives of patients with rare and orphan diseases. Amryt comprises a strong and growing portfolio of commercial and development assets.

Amryt's commercial business comprises two orphan disease products.

Juxtapid®/ Lojuxta® (lomitapide) is approved as an adjunct to a low-fat diet and other lipid-lowering medicinal products for adults with the rare cholesterol disorder, Homozygous Familial Hypercholesterolaemia ("HoFH") in the US, Canada, Columbia, Argentina and Japan (under the trade name Juxtapid®) and in the EU (under the trade name Lojuxta®). HoFH is a rare genetic disorder which impairs the body's ability to remove low density lipoprotein ("LDL") cholesterol ("bad" cholesterol) from the blood, typically leading to abnormally high blood LDL cholesterol levels in the body from before birth - often ten times more than people without HoFH - and subsequent aggressive and premature cardiovascular disease.

Myalept® / Myalepta® (metreleptin) is approved in the US (under the trade name Myalept®) as an adjunct to diet as replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy (GL) and in the EU (under the trade name Myalepta®) for the treatment of leptin deficiency in patients with congenital or acquired GL in adults and children two years of age and above and familial or acquired partial lipodystrophy (PL) in adults and children 12 years of age and above for whom standard treatments have failed to achieve adequate metabolic control. Metreleptin is also approved for lipodystrophy in Japan. Generalised and partial lipodystrophy are rare disorders characterised by loss or lack of adipose tissue resulting in the deficiency of the hormone leptin, produced by fat cells and are associated with severe metabolic abnormalities including severe insulin resistance, diabetes, hypertriglyceridemia and fatty liver disease.

Amryt's lead development candidate, FILSUVEZ® is a potential treatment for the cutaneous manifestations of Epidermolysis Bullosa ("EB"), a rare and distressing genetic skin disorder affecting young children and adults for which there is currently no approved treatment. FILSUVEZ® has been granted Rare Pediatric Disease Designation and has also received a Fast Track Designation from the FDA. The European and US market opportunity for EB is estimated by the Company to be in excess of $1.0 billion.

In March 2018, Amryt in-licenced a pre-clinical gene-therapy platform technology, AP103, which offers a potential treatment for patients with Recessive Dystrophic Epidermolysis Bullosa, a subset of EB, and is also potentially relevant to other genetic disorders. 

For more information on Amryt, including products, please visit www.amrytpharma.com.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014.

Forward-Looking Statements

Statements in this announcement with respect to Amryt's business, strategies, timing for completion of and announcing results from the EASE study, the potential impact of closing enrollment in the EASE study, as well as other statements that are not historical facts are forward-looking statements involving risks and uncertainties which could cause the actual results to differ materially from such statements. Statements containing the words "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project" and similar expressions (or their negative) identify certain of these forward-looking statements. The forward-looking statements in this announcement are based on numerous assumptions and Amryt's present and future business strategies and the environment in which Amryt expects to operate in the future. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These statements are not guarantees of future performance or the ability to identify and consummate investments. Many of these risks and uncertainties relate to factors that are beyond each of Amryt's ability to control or estimate precisely, such as future market conditions, the course of the COVID-19 pandemic, currency fluctuations, the behaviour of other market participants, the outcome of clinical trials, the actions of regulators and other factors such as Amryt's ability to obtain financing, changes in the political, social and regulatory framework in which Amryt operates or in economic, technological or consumer trends or conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. No person is under any obligation to update or keep current the information contained in this announcement or to provide the recipient of it with access to any additional relevant information that may arise in connection with it. Such forward-looking statements reflect the Company's current beliefs and assumptions and are based on information currently available to management.

 

 

Amryt Pharma plc
 
Consolidated Statement of Financial Position

 

 

Year ended December 31,

 

 


2019


2018

 

Note

US$'000

 

 

 

 

 

Assets..........................................................................................................................................

 

 

 

Non-current assets...................................................................................................................

 

 

 

Goodwill

12

 

$         30,813

 

$              -

 

Intangible assets........................................................................................................................

12

 

350,953

 

60,297

 

Property, plant and equipment...............................................................................................

13

 

3,036

 

1,098

 

Other non-current assets..........................................................................................................

 

2,306

 

149

 

Total non-current assets.........................................................................................................

 

387,108

 

61,544

 

Current assets...........................................................................................................................

 

 

 

Trade and other receivables....................................................................................................

14

 

36,387

 

5,927

 

Inventories.................................................................................................................................

15

 

43,623

 

2,137

 

Cash and cash equivalents, including restricted cash........................................................

16

 

67,229

 

11,226

 

Total current assets.................................................................................................................

 

147,239

 

19,290

 

Total assets................................................................................................................................

 

534,347

 

80,834

 

 

 

 

 

Equity and liabilities..............................................................................................................

 

 

 

Equity attributable to owners of the parent......................................................................

 

 

 

Share capital..............................................................................................................................

17

 

11,918

 

25,198

 

Share premium..........................................................................................................................

17

 

2,422

 

68,233

 

Other reserves............................................................................................................................

 

248,656

 

(24,865

)

Accumulated deficit.................................................................................................................

 

(133,674

)

(72,263

)

Total equity...............................................................................................................................

 

129,322

 

(3,697

)

Non-current liabilities............................................................................................................

 

 

 

Contingent consideration........................................................................................................

6

 

102,461

 

47,316

 

Deferred tax liability.................................................................................................................

18

 

18,921

 

6,161

 

Long term loan..........................................................................................................................

19

 

81,610

 

19,011

 

Convertible notes......................................................................................................................

20

 

96,856

 

-

 

Provisions and other liabilities................................................................................................

22

 

4,963

 

-

 

Total non-current liabilities..................................................................................................

 

304,811

 

72,488

 

Current liabilities....................................................................................................................

 

 

 

Trade and other payables.......................................................................................................

21

 

76,596

 

12,043

 

Provisions and other liabilities................................................................................................

22

 

23,618

 

-

 

Total current liabilities..........................................................................................................

 

100,214

 

12,043

 

Total liabilities.........................................................................................................................

 

405,025

 

84,531

 

Total equity and liabilities....................................................................................................

 

$         534,347

 

$        80,834

 

 

 

 

Amryt Pharma plc
 
Consolidated Statement of Comprehensive Loss

 

 

Year ended December 31,

 

 

 


2019

 


2018

 

 

Note

US$'000

 

 

Revenue.............................................................................................................................

3

$            58,124

 

 

$           17,095

 

 

Cost of sales......................................................................................................................

4

(42,001

)

 

(6,266

)

 

Gross profit......................................................................................................................

 

16,123

 

 

10,829

 

 

Research and development expenses...........................................................................

 

(15,827

)

 

(10,703

)

 

Selling, general and administrative expenses..............................................................

 

(35,498

)

 

(17,342

)

 

Restructuring and acquisition costs...............................................................................

6

(13,038

)

 

-

 

 

Share based payment expenses.....................................................................................

5

(841

)

 

(821

)

 

Impairment charge...........................................................................................................

12

(4,670

)

 

-

 

 

Operating loss before finance expense......................................................................

7

(53,751

)

 

(18,037

)

 

Non-cash change in fair value of contingent consideration.....................................

6

(8,251

)

 

(10,566

)

 

Net finance expense.........................................................................................................

9

(4,759

)

 

(1,841

)

 

Loss on ordinary activities before taxation.............................................................

 

(66,761

)

 

(30,444

)

 

Tax credit/(charge) on loss on ordinary activities.......................................................

10

1,226

 

 

(43

)

 

Loss for the year attributable to the equity holders of the Company................

 

(65,535

)

 

(30,487

)

 

Exchange translation differences which may be reclassified through profit or loss.......................................................................................................................................

 

781

 

 

(77

)

 

Total other comprehensive profit/(loss)........................................................................

 

781

 

 

(77

)

 

Total comprehensive loss for the year attributable to the equity holders of the Company....................................................................................................................

 

$           (64,754

)

 

$           (30,564

)

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

Loss per share - basic and diluted, attributable to ordinary equity holders of the parent (US$)......................................................................................................................

11

$

(0.86

)

 

$

(0.67

)

 

                     

 

 

Amryt Pharma plc
 
Consolidated Statement of Cash Flows

 

 

Year ended December 31,

 

 

2019

2018

 

Note

US$'000

Cash flows from operating activities

 

 

 

Loss on ordinary activities after taxation

 

$         (65,535

)

$          (30,487

)

Net finance expense

9

 

4,759

 

1,841

 

Depreciation and amortization

12, 13

 

12,655

 

367

 

Amortization of inventory fair value step-up

4, 7

 

10,367

 

-

 

Loss on disposal of fixed assets

 

 

43

 

-

 

Share based payment expenses

5

 

841

 

821

 

Non-cash change in fair value of contingent consideration

6

 

8,251

 

10,566

 

Impairment of intangible asset

12

4,670

 

-

 

Deferred taxation credit

 

(1,665

)

-

 

Movements in working capital and other adjustments:

 

 

 

    Change in trade and other receivables

14

 

(4,732

)

(532

)

    Change in trade and other payables

21

 

(6,356

)

3,051

 

 

    Change in provision and other liabilities

22

 

4,922

 

-

 

    Change in inventories

15

 

(5,894)

 

(928

)

    Change in non-current assets

 

177

 

(153

)

Net cash flow used in operating activities

 

(37,497

)

(15,454

)

 

 

 

 

Cash flow from investing activities

 

 

 

Net cash received on acquisition of subsidiary

6

 

24,985

 

-

 

Payments for property, plant and equipment

13

 

(578

)

(80

)

Payments for intangible assets

12

 

(74

)

(155

)

Deposit interest received

 

92

 

6

 

Net cash flow from (used in) investing activities

 

24,425

 

(229

)

 

 

 

 

Cash flow from financing activities

 

 

 

Proceeds from issue of equity instruments - net of expenses

17

 

63,009

 

-

 

Proceeds from long term borrowings net of debt issue costs

19

 

31,176

 

5,914

 

Repayment of long term debt

19

 

(21,990

)

-

 

Interest paid

       19

(6,253

)

(283

)

Payment of deferred consideration

 

-

 

(2,366

)

Net cash flow from financing activities

 

65,942

 

3,265

 

 

 

 

 

Exchange and other movements

 

3,133

 

(767

)

Net change in cash and cash equivalents

 

56,003

 

(13,185

)

Cash and cash equivalents at beginning of year

 

11,226

 

24,411

 

Restricted cash at end of year

16

 

2,032

 

1,362

 

Cash at bank available on demand at end of year

16

 

65,197

 

9,864

 

Total cash and cash equivalents at end of year

16

 

$            67,229

 

$           11,226

 

 

Amryt Pharma plc
 Consolidated Statement of Changes in Equity

 

 

Share capital

Share premium

Warrant reserve

Treasury shares

Share based payment reserve

Merger reserve

Reverse acquisition reserve

Equity component of convertible notes

Other distributable reserves

Currency translation reserve

Accumulated deficit

Total

 

Note

US$'000

 

Balance at January 1, 2018

 

$ 25,198

 

$   68,233

 

$       -

 

$       -

 

$    5,659

 

$ 42,627

 

$   (73,914

)

$      -

 

$      -

 

$        26

 

$    (41,783

)

$  26,046

 

Loss for the year

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(30,487

)

(30,487

)

Foreign exchange translation reserve

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(77

)

-

 

(77

)

Total comprehensive loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(77

)

(30,487

)

(30,564

)

Transactions with owners

 

 

 

 

 

 

 

 

 

 

 

 

 

Share based payment expense

5

-

 

-

 

-

 

-

 

821

 

-

 

-

 

-

 

-

 

-

 

-

 

821

 

Share based payment expense - Lapsed

 

-

 

-

 

-

 

-

 

(7

)

-

 

-

 

-

 

-

 

-

 

7

 

-

 

Total transactions with owners

 

-

 

-

 

-

 

-

 

814

 

-

 

-

 

-

 

-

 

-

 

7

 

821

 

Balance at December 31, 2018

 

25,198

 

68,233

 

-

 

-

 

6,473

 

42,627

 

(73,914

)

-

 

-

 

(51

)

(72,263

)

(3,697

)

Balance at January 1, 2019

 

25,198

 

68,233

 

-

 

-

 

6,473

 

42,627

 

(73,914

)

-

 

-

 

(51

)

(72,263

)

(3,697

)

Loss for the year

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(65,535

)

(65,535

)

Foreign exchange translation reserve

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

781

 

-

 

781

 

Total comprehensive loss

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

781

 

(65,535

)

(64,754

)

Transactions with owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share consolidation

17

(21,262

)

21,262

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

Issue of shares in August 2019 equity fund raise

17

533

 

7,467

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

8,000

 

Issue costs associated with August 2019 equity fund raise

17

-

 

(1,886

)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,886

)

Acquisition of subsidiary without a change of control

17

(495

)

(3,726

)

-

 

-

 

-

 

-

 

-

 

-

 

(2,969

)

7,190

 

-

 

-

 

Issue of shares and warrants in consideration of Aegerion Acquisition

17

5,759

 

132,392

 

14,464

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

152,615

 

Issue of shares and warrants in equity fund raise

17

2,059

 

47,338

 

10,603

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

60,000

 

Issue costs associated with September 2019 equity fund raise

17

-

 

(2,575

)

(530

)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(3,105

)

Issue of convertible notes

20

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

29,210

 

-

 

-

 

-

 

29,210

 

Issue of contingent value rights

6

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(47,902

)

-

 

-

 

(47,902

)

Transfer to distributable reserves

17

-

 

(268,505

)

-

 

-

 

-

 

-

 

-

 

-

 

268,505

 

-

 

-

 

-

 

Treasury shares acquired in consideration for additional warrants

17

-

 

-

 

7,534

 

(7,534

)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

Issue of shares in exchange for warrants in December 2019

17

126

 

2,422

 

(2,548

)

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

Share based payment expense

  5

 

-

 

-

 

-

 

-

 

841

 

-

 

-

 

-

 

-

 

-

 

-

 

841

 

Share based payment expense - Lapsed

 

-

 

-

 

-

 

-

 

(4,124

)

-

 

-

 

-

 

-

 

-

 

4,124

 

-

 

Total transactions with owners

 

(13,280

)

(65,811

)

29,523

 

(7,534

)

(3,283

)

-

 

-

 

29,210

 

217,634

 

7,190

 

4,124

 

197,773

 

Balance at December 31, 2019

 

$ 11,918

 

$    2,422

 

$  29,523

 

$   (7,534

)

$   3,190

 

$ 42,627

 

$   (73,914

)

$   29,210

 

$    217,634

 

$     7,920

 

$  (133,674

)

$129,322

 

 

1. General information

 

We are a global, commercial-stage biopharmaceutical company dedicated to commercializing and developing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases.

 

As used herein, references to ''we,'' ''us,'' ''Amryt'' or the ''Group'' in these consolidated financial statements shall mean Amryt Pharma plc and its global subsidiaries, collectively. References to the ''Company'' in these consolidated financial statements shall mean Amryt Pharma plc.

 

Amryt Pharma plc is a company incorporated in England and Wales. The Company is listed on the AIM market of the London Stock Exchange (ticker: AMYT) and the Euronext Growth Exchange of the Irish Stock Exchange (ticker: AYP).

 

Aegerion Pharmaceuticals, Inc. (''Aegerion''), a former subsidiary of Novelion Therapeutics Inc., is a rare and orphan disease company with a diversified offering of multiple commercial and development stage assets. The acquisition of Aegerion by Amryt in September 2019 has given Amryt an expanded commercial footprint to market two U.S. and EU approved products, lomitapide (JUXTAPID (U.S.) / LOJUXTA (EU)) and metreleptin (MYALEPT (U.S.) / MYALEPTA (EU)).

 

On July 10, 2019, the shareholders of the Company approved a resolution to give authority to the Company to undertake a consolidation of the existing ordinary shares in the capital of the Company under which every six existing ordinary shares were consolidated into one ordinary share. The number of shares in issue at December 31, 2018 has been adjusted to reflect this share consolidation on July 10, 2019 for the purposes of the loss per share calculation. The number of share options outstanding at January 1, 2018 and the share options granted and lapsing during the year ended December 31, 2018 have been restated to reflect the 2019 share consolidation.

 

On September 20, 2019, Amryt registered FILSUVEZ as the trademark name for the Group's lead development asset, AP101, in the European Union. On February 2020, Amryt also registered this trademark name in the United States and is in the process of registering the FILSUVEZ trademark in other key jurisdictions.

 

 

2. Accounting policies

 

Basis of preparation

 

The consolidated financial statements of the Company and its subsidiaries (''Group'') have been prepared in accordance with International Financial Reporting Standards (''IFRS'') as issued by the International Accounting Standards Board (''IASB''). Except for the new accounting standards to IFRS that have been adopted by the Group, effective January 1, 2019, the financial statements have been prepared using the same accounting policies as 2018.

 

The consolidated financial statements were authorized for issue by the Company's Board of Directors on April 20, 2020.

 

Basis of going concern

 

Having considered the Group's current financial position and cash flow projections, the Board of Directors believes that the Group will be able to continue in operational existence for at least the next 12 months from the date of approval of these consolidated financial statements and that it is appropriate to continue to prepare the consolidated financial statements on a going concern basis.

 

As part of their inquiries, the Board of Directors reviewed budgets, projected cash flows, and other relevant information for 12 months from the date of approval of the consolidated financial statements for the year ended December 31, 2019.

 

A key consideration for the impact on going concern is the acquisition of Aegerion, which was completed in September 2019. This acquisition represents a significant step forward for Amryt and has created value for Amryt with immediate effect post-deal close through enhanced scale of the combined Group, which has the potential to drive revenues and deliver operational synergies through a combination of medical, commercial, clinical, development and regulatory infrastructure. Additionally, Amryt completed a US$60,000,000 fundraising as part of the acquisition of Aegerion.

 

Basis of consolidation

 

The consolidated financial statements comprise the financial statements of the Group for the years ended December 31, 2019 and 2018. Subsidiaries are entities controlled by the Company. Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over an investee, exposure or rights to variable returns from its involvement with the investee and the ability to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

 

Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intergroup balances and any unrealized gains or losses, income or expenses arising from intergroup transactions are eliminated in preparing the consolidated financial statements.

 

Merger reserve

 

The merger reserve was created on the acquisition of Amryt Pharmaceuticals DAC (''Amryt DAC'') by Amryt Pharma plc in April 2016. Ordinary shares in Amryt Pharma plc were issued to acquire the entire issued share capital of Amryt DAC. Under section 612 of the Companies Act 2006, the premium on these shares has been included in a merger reserve.

 

Presentation of balances

 

Beginning January 1, 2018 (the earliest period presented), the Company changed its reporting currency from Euros (''€'') to U.S. dollars (''US$'') to align with the new functional currency of the Company, subsequent to the Aegerion acquisition in September 2019, and to provide greater clarity to users of these consolidated financial statements. The change in reporting currency was applied retrospectively beginning January 1, 2018 using the following procedures:

 

·      assets and liabilities were translated from their Euro functional currency to U.S. dollars using the exchange rate in effect at the balance sheet date;

 

·      income and expenditure was translated at the average rate of exchange prevailing for the relevant period; and

 

·      opening shareholders' equity at January 1, 2018 was translated at the historic rate on that date and any other movements in shareholders' equity during the year have been translated using the rates prevailing on the date of the transaction.

 

Any differences which arose due to the change in reporting currency have been posted to the currency translation reserve.

 

The following table discloses the major exchange rates of those currencies other than the functional currency of US$ that are utilized by the Group:

 

Foreign currency units to 1 US$

 

 

£

 

CHF

 

SEK

 

NOK

 

DKK

Average period to December 31, 2019

 

0.8932

 

0.7836

 

0.9938

 

9.4533

 

8.7976

 

6.6690

At December 31, 2019

 

0.8929

 

0.7624

 

0.971

 

9.3282

 

8.8046

 

6.6698

 

 

Foreign currency units to 1 US$

 

 

£

 

CHF

 

SEK

 

NOK

 

DKK

Average period to December 31, 2018

 

0.8455

 

0.7485

 

0.9763

 

8.6784

 

8.1289

 

6.2997

At December 31, 2018

 

0.8739

 

0.7833

 

0.9976

 

9.0855

 

8.5654

 

6.5700

 

(€ = Euro; £ = Pounds Sterling, CHF = Swiss Franc, SEK = Swedish Kroner, NOK = Norwegian Kroner, DKK = Danish Kroner)

 

Changes in accounting policies and disclosures

 

New standards and amendments to IFRS effective as of January 1, 2019 that are relevant to the Group have been reviewed by the Group. These standards and amendments are described in more detail below.

 

Adoption of new standards issued and effective as of January 1, 2019

 

Impact of initial application of IFRS 16 Leases

 

IFRS 16 replaced IAS 17, Leases, and the related interpretations. The Group adopted IFRS 16 effective January 1, 2019 by applying the modified retrospective approach. The Group also elected various practical expedients, including the election to not separate lease and non-lease components, the election for leases of low value assets, and the election to not record leases with an initial term of 12 months or less on the statement of financial position. As a result of these elections, each lease component and any associated non-lease components are accounted for as a single lease, and leases with a total maximum term of 12 months and leases for underlying assets of low value will be exempt from balance sheet recognition.

 

Under IFRS 16, at the commencement date of a lease, a lessee will recognize a liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e. the right-of-use asset).

 

Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Under IFRS 16 lessees will also be required to remeasure the lease liability upon the occurrence of certain events (e.g. a change in lease term or a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognize the amount of the re-measurement of the lease liability as an adjustment to the right-of-use asset.

 

Upon the initial application of IFRS 16 as of January 1, 2019, the Group recognized right-of-use asset and lease liabilities of US$874,000. The lease liabilities were discounted using the discount rates, which were arrived at using a methodology to calculate incremental borrowing rates across the Group as of January 1, 2019. The weighted average discount rate was 6.64%. Additionally, as a result of the adoption of IFRS 16, total amount of depreciation recognized related to the right-of-use assets was US$321,000 during the year ended December 31, 2019; total amount of interest expense recognized on the lease liability was US$36,000 during the year ended December 31, 2019.

 

The impact on the opening Retained earnings is considered immaterial, hence no adjustments were made to the Retained earnings as a result of adoption of IFRS 16.

 

In the current year, the Group has applied a number of amendments to IFRS and Interpretations issued by the IASB that are effective for annual period begins on or after January 1, 2019. These amendments and interpretations do not have significant impact on the disclosures or the amounts reported in these consolidated financial statements.

 

·      IAS 19 Employee Benefits (Amendment on Employee Benefits Plan, Amendment, Curtailment or Settlement)

 

·      IFRIC 23 Uncertainty over Income Tax Payments

 

·      IFRS 9 Prepayment Features with Negative Compensation (Amendment to IFRS 9)

 

·      IAS 28 Long-term Interests in Associates and Joint Ventures (Amendment to IAS 28)

 

·      Annual improvements to IFRS 2015-2017 Cycle

 

Standards issued but not yet effective

 

There were a number of standards and interpretations which were in issue at December 31, 2019 but were not effective at December 31, 2019 and have not been adopted for these financial statements.

 

·      Definition of Business (Amendment to IFRS 3 Business Combination)

 

·      IFRS 17 Insurance Contracts

 

·      Definition of Material (Amendments to IAS 1 and 8)

 

·      Conceptual Framework for Financial Reporting

 

These amendments are not expected to have significant impact on disclosures or amounts reported in the consolidated financial statements in the period of initial application.

 

Critical accounting judgements and key sources of estimation uncertainty

 

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and amounts reported in the financial statements and accompanying notes. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

The critical accounting policies which involve significant estimates, assumptions or judgements, the actual outcome of which could have a material impact on the Group's results and financial position outlined below, are as follows:

 

Valuation of convertible notes

 

In conjunction with the accounting for financial instruments, the Group recorded compound financial instruments related to the convertible notes that were issued on September 24, 2019. In determining the classification of the convertible notes, the Group assessed the fixed-for-fixed criteria and considered that this was met and the number of shares that can be converted by holders of the notes is fixed. The compound financial instrument consists of a liability component and an equity component. The liability component is valued using an estimated discounted cash flow calculation based on the future contractual cash flows in the contract which are discounted at a rate of interest an identical financial instrument without a conversion feature would be subject to. Factors that are considered in estimating the prevailing market rate of interest include or are not limited to:

 

·      loan term and maturity;

 

·      repayment profile during the loan term other than interest;

 

·      level of loan security; and

 

·      principal amount of the loan.

 

Valuation of acquired assets

 

In conjunction with the accounting for business combinations, the Group recorded intangible assets such as in connection with the Aegerion acquisition, primarily related to developed technology on the commercially marketed products, and inventories which include raw materials and finished goods. The identifiable intangible assets and inventories are measured at their respective fair values as of the acquisition date. When significant identifiable intangible assets and inventories are acquired, the Group determines the fair values of these assets as of the acquisition date. The models used in valuing these intangible assets and inventories require the use of significant estimates and assumptions including but not limited to:

 

Intangible assets

 

·      estimates of revenues and operating profits related to the products or product candidates;

 

·      the probability of success for unapproved product candidates considering their stages of development;

 

·      the time and resources needed to complete the development and approval of product candidates;

 

·      projecting regulatory approvals;

 

·      developing appropriate discount rates and probability rates by project; and

 

·      tax implications, including the forecasted effective tax rate.

 

Inventories

 

·      estimates of saleable inventory and non-saleable inventory, which was determined by a sales forecast and production timeline; and

 

·      expected selling price and estimated costs of disposal.

 

The Group believes the fair values used to record intangible assets and inventories acquired in connection with a business combination are based upon reasonable estimates and assumptions given the facts and circumstances as of the acquisition date.

 

Valuation of contingent value rights (''CVRs'')

 

The Group issued CVRs for payments to its shareholders based on the occurrence of two milestones related to AP101, its pipeline product. The CVRs have pre-determined payouts, based on the occurrence of a future event. If the event does not occur, the CVR expires as worthless. The fair value of the CVRs is estimated as of September 24, 2019, based on the following key assumptions:

 

•              expected timing of achievement of the two milestones (U.S. Food and Drug Administration (''FDA'') approval and European Medicines Agency approval) related to AP101;

 

•              probabilities of achievements;

 

•              revenue forecast related to AP101; and

 

•              the appropriate discount rate selected to measure the risks inherent in the future cash flows.

 

The Group believes the fair value of the CVRs is based upon reasonable estimates and assumptions given the facts and circumstances as of the valuation date.

 

Impairment of intangible assets and goodwill

 

The impairment assessment for intangible assets requires management to make significant judgements and estimates to determine the fair value of the assets. Management periodically evaluates and updates the estimates based on the conditions which influence these variables. A detailed discussion of the impairment methodology applied and key assumptions used by the Group in the context of long-lived assets is provided in Note 12, Intangible assets and goodwill, to the consolidated financial statements. The assumptions and conditions for determining impairment of intangible assets reflect management's best assumptions and estimates, but these items involve inherent uncertainties described above, many of which are not under management's control. As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions or if different conditions occur in future accounting periods.

 

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets acquired in a business combination. Goodwill is not amortized, but instead is reviewed for impairment on an annual basis or when an event becomes known that could trigger an impairment. To perform the annual impairment test of goodwill, the Group has identified the Group as a whole as a single cash generating unit (''CGU''). CGUs reflect the lowest level at which goodwill is monitored for internal management purposes. At least once a year, the Group compares the recoverable amount of the Group's CGU to the CGU's carrying amount. The recoverable amount (value in use) of a CGU is determined using a discounted cash flow approach based upon the cash flow expected to be generated by the CGU. In case that the value in use of the CGU is less than its carrying amount, the difference is at first recorded as an impairment of the carrying amount of the goodwill.  The assumptions utilized in the impairment test are dependent on management's estimates, in particular in relation to the forecasting of future cash flows, the discount rates applied to those cash flows, the expected long-term growth rate of the applicable businesses and terminal values. As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions or if different conditions occur in future accounting periods.

 

Contingent consideration

 

Contingent consideration arising as a result of business combinations is initially recognized at fair value using a probability adjusted present value model. The fair value of the contingent consideration is updated at each reporting date. The key judgements and estimates applied by management in the determination of the fair value of the contingent consideration relate to the determination of an appropriate discount rate, the assessment of market size and opportunity and probability assessments based on market data for the chance of success of the commercialization of an orphan drug. A detailed discussion of the methodology applied and key input assumptions used by the Group is provided in Note 6, Business combinations and asset acquisitions, to the consolidated financial statements. The fair value of the contingent consideration uses management's best estimates and judgements and sensitivities have been assessed by management by considering movements in the discount rate applied and movements in revenue forecasts. The chance of success of product development is based on published market data. See Note 24, Fair value measurement and financial risk management, for quantification of these sensitivities.

 

Research and development expenses

 

Development costs are capitalized as an intangible asset if all of the following criteria are met:

 

·      completing the asset is technically feasible so that the asset will be available for use or sale;

 

·      there is an intention to complete the asset and use or sell it;

 

·      there is an ability to use or sell the asset;

 

·      the asset will generate probable future economic benefits and demonstrate the existence of a market or the usefulness of the asset if it is to be used internally;

 

·      adequate technical, financial and other resources are available to complete the development of the asset and to use or sell it; and

 

·      there is an ability to measure reliably the expenditure attributable to the intangible asset.

 

In process R&D acquired as part of a business combination is capitalized at the date of acquisition. Research costs are expensed when they are incurred.

 

Factors which impact our judgement to capitalize certain research and development expenditures include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. Management reviews these factors each year to determine whether previous estimates as to feasibility, viability and recovery should be changed.

 

The assessment whether development costs can be capitalized requires management to make significant judgements. Management has reviewed the facts and circumstances of each project in relation to the above criteria and in management's opinion, the criteria prescribed for capitalizing development costs as assets have not yet been met by the Group in relation to AP101 or AP103. Refer to Note 12, Intangible assets and goodwill, for further discussion on the impairment of AP102. Accordingly, all of the Group's costs related to research and development projects are recognized as expenses in the Consolidated Statement of Comprehensive Loss in the period in which they are incurred. Management expects that the above criteria will be met on filing of a submission to the regulatory authority for final drug approval or potentially in advance of that on the receipt of information that strongly indicates that the development will be successful.

 

Business combination

 

On September 24, 2019, the Group acquired Aegerion. In accounting for this transaction, the Board of Directors considered the date of when control of Aegerion passed to the Group, the fair value of the consideration settled and the fair value of the assets and liabilities acquired. See Note 6, Business combinations and asset acquisitions, for further information on the determination of the fair value of the assets acquired.

 

Recognition of deferred tax assets

 

Deferred tax assets are determined using enacted tax rates for the effects of net operating losses and temporary differences between the book and tax bases of assets and liabilities. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. While management considers the scheduled reversal of deferred tax liabilities, and projected future taxable income in making this assessment, there can be no assurance that these deferred tax assets may be realizable. As at December 31, 2019, the Group did not recognize a deferred tax asset in respect of unused tax losses as described in Note 10, Tax on ordinary activities.

 

Principal accounting policies

 

Principal accounting policies are summarized below. They have been consistently applied throughout the period covered by the financial statements.

 

Revenue recognition

 

Revenue arises from the sale of metreleptin, lomitapide and Imlan. The Group sells direct to customers and also uses third parties in the distribution of products to customers.

 

To determine whether to recognize revenue, the Group follows a five-step process, as required by IFRS 15:

 

·              identifying the contract with a customer;

 

·              identifying the performance obligations;

 

·              determining the transaction price;

 

·              allocating the transaction price to the performance obligations; and

 

·              recognizing revenue when/as performance obligation(s) are satisfied.

 

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled to in exchange for those goods. The Group recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as liabilities in the Consolidated Statement of Financial Position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognizes either a contract asset or a receivable in its Consolidated Statement of Financial Position, depending on whether something other than the passage of time is required before the consideration is due.

 

Revenue from sale of goods

 

Imlan revenue is generally recognized at a point in time when control of the inventory is transferred, generally the date of shipment, consistent with typical ex-works shipment terms.

 

Revenue is generally recognized at a point in time when control of the inventory is transferred to the end customer, generally on delivery of the goods.

 

Principal versus agent considerations

 

The Group enters into certain contracts for the sale of its products. This includes agreements with third parties to provide logistics, customer and commercial services, i.e. supply chain function and agreements with distributors. The Group determined that it has control over the goods before they are transferred to the customers and has the ability to direct the use or obtain benefits, hence the Group is the principal on the contracts due to the following factors:

 

·      the Group is primarily responsible for fulfilling the promise to provide the promised goods;

 

·      the Group bears the inventory risk before or after the goods have been ordered by the customer, during shipping or on return;

 

·      the Group has the discretion in establishing the selling price of the goods to customers. The distributors' consideration in these contracts is either the margin fee or commission; and

 

·      the Group is exposed to the credit risk for the amounts receivable from the customers.

 

Where the above criteria are met, the Group recognizes revenue on a gross basis. The costs associated with the delivery of such goods to customers i.e. the costs associated with the services provided by the distributors to import and deliver the goods are recognized in the cost of sales.

 

Financial instruments

 

Recognition and derecognition

 

Financial instruments are classified on initial recognition as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement. Financial instruments are initially recognized when the Group becomes party to the contractual provisions of the instrument. Financial assets are de-recognized when the contractual rights to the cash flows from the financial asset expire or when the contractual rights to those assets are transferred. Financial liabilities are de-recognized when the obligation specified in the contract is discharged, cancelled or expired.

 

Classification and initial measurement of financial assets

 

Trade receivables are measured at the transaction price in accordance with IFRS 15. All financial assets are initially measured at fair value adjusted for transaction costs, if any.

 

Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:

 

·      amortized cost;

 

·      fair value through profit or loss (''FVTPL''); and

 

·      fair value through other comprehensive income (''FVOCI'').

 

The Group did not have any financial assets categorized as FVTPL or FVOCI as at December 31, 2019 and 2018. The classification is determined by both:

 

·      the Group's business model for managing the financial asset; and

 

·      the contractual cash flow characteristic of the financial asset.

 

Subsequent measurement of financial assets

 

Financial assets at amortized cost

 

Financial assets are measured at amortized cost if the assets meet the following conditions (and are not designated as FVTPL):

 

·      they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and

 

·      the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

After initial recognition, these are measured at amortized cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents and trade receivables fall into this category of financial instruments.

 

Cash and cash equivalents

 

Cash comprises cash on hand and bank balances. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition.

 

Restricted cash

 

Restricted cash comprises current cash and cash equivalents that are restricted as to withdrawal or usage. Cash held by the Group's distribution partner for LOJUXTA on behalf of the Group is treated as restricted cash in the financial statements. Aegerion also has restricted cash in an escrow account set-up in accordance with Aegerion's bankruptcy plan as approved by the U.S. Bankruptcy Court.

 

Trade and other receivables

 

Trade and other receivables represent the Group's right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due).

 

Impairment of financial assets

 

The Group recognizes an allowance for expected credit losses (''ECLs'') for all debt instruments not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group assesses ECL based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

 

Financial liabilities

 

Financial liabilities are categorized as ''fair value through profit or loss'' or ''other financial liabilities measured at amortized costs using the effective interest method''.

 

Trade and other payables

 

Trade and other payables are initially measured at their fair value and are subsequently measured at their amortized cost using the effective interest rate method except for short-term payables when the recognition of interest would be immaterial.

 

Provisions

 

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

 

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

 

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

 

Interest bearing loans and borrowings

 

Interest-bearing loans and borrowings are recognized initially at fair value less attributable transaction costs. Loans and borrowings are subsequently carried at amortized cost using the effective interest method. Interest is charged to the Consolidated Statement of Comprehensive Loss.

 

Convertible notes

 

Convertible notes are first assessed to determine classification as a financial liability or equity instrument for the financial instrument as a whole and components thereof. The initial carrying amount of a compound financial instrument is allocated to its equity and liability components.

 

The two components are evaluated first by measuring the fair value of the liability component. The fair value of the liability component is assessed using a discounted cash flow calculation based on the future contractual cash flows in the contract which are discounted at an estimated market prevailing rate of interest an identical financial instrument without a conversion feature would be subject to. The equity component is measured by determining the residual of the fair value of the instrument less the estimated fair value of the liability component.

 

The liability component is carried at amortized cost. Interest is calculated by applying the estimated prevailing market interest rate at the time of issue. The equity component is recognized in equity and is not subsequently remeasured.

 

Contingent consideration

 

Contingent consideration arising as a result of business combinations is initially recognized at fair value using a probability adjusted present value model. Key inputs in the model include the probability of success and the expected timing of potential revenues. The fair value of the contingent consideration will be updated at each reporting date. Adjustments to contingent consideration are recognized in the Consolidated Statement of Comprehensive Loss.

 

Offsetting financial instruments

 

Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Statement of Financial Position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously.

 

Inventories

 

Inventories are valued at the lower of cost or net realizable value. The costs are calculated according to the first in-first out method (''FIFO''). Cost includes materials, direct labor and an attributable proportion of manufacturing overhead based on normal levels of activity. Work in progress valuation is based on the stage of quality checks successfully performed during the production process. An inventory valuation adjustment is made if the net realizable value is lower than the book value. Net realizable value is determined as estimated selling prices less all costs of completion and costs incurred in selling and distribution.

 

Inventories held by third-party supply chain partners are included in inventory totals when control has deemed to be transferred to the Group under the contract terms of the distribution agreement. The cost to acquire the inventory held by the supply chain partners is recognized as a liability of the Group.

 

Leases

 

A lease is defined as a contract that conveys the right to use an underlying asset for a period of time in exchange for consideration. A contract is or contains a lease if:

 

·      the underlying asset is identified in the contract; and

 

·      the customer has both the right to direct the identified asset's use and to obtain substantially all the economic benefits from that use.

 

Under IFRS 16, the Group is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments for almost all leases.

 

Lease liabilities

 

Lease liabilities are initially recognized at the present value of the following payments, when applicable:

 

·      fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

 

·      variable lease payments (linked to an index or interest rate);

 

·      expected payments under residual value guarantees;

 

·      the exercise price of purchase options, where exercise is reasonably certain;

 

·      lease payments in optional renewal periods, where exercise of extension options is reasonably certain; and

 

·      penalty payments for the termination of a lease, if the lease term reflects the exercise of the respective termination option.

 

Lease payments are discounted using the implicit interest rate underlying the lease if this rate can be readily determined. Otherwise, the incremental borrowing rate is used as the discount rate.

 

Lease liabilities are subsequently measured at amortized cost using the effective interest method. Furthermore, lease liabilities may be remeasured due to lease modifications or reassessments of the lease. A lease modification is any change in lease terms that was not part of the initial terms and conditions of the lease, including increases of the scope of the lease by adding the right to use one or more underlying assets or extending the contractual lease term, decreases of the scope of the lease by removing the right to use one or more underlying assets or shortening the contractual lease term or changes in the consideration. Reassessments are changes in estimates or changes triggered by a clause that was part of the initial lease contract, including changes in future lease payments arising from a change in an index or rate, change in the Group's estimate of the amount expected to be payable under residual value guarantees or change in the Group's assessment of whether it will exercise purchase, extension or termination options.

 

Right-of-use assets

 

The Group recognizes right-of-use assets at the commencement date of the respective lease. Right-of-use assets are stated at cost less accumulated depreciation. Upon initial recognition, cost comprises:

 

·      the initial lease liability amount;

 

·      initial direct costs incurred when entering into the lease;

 

·      (lease) payments before commencement date of the respective lease;

 

·      an estimate of costs to dismantle and remove the underlying asset; and

 

·      less any lease incentives received.

 

Right-of-use assets are depreciated over the shorter of the lease term or the useful life of the underlying asset using the straight-line method. In addition, right-of-use assets are reduced by impairment losses, if any, and adjusted for certain remeasurements.

 

Foreign currency translation

 

Presentation currency

 

The Group translates foreign currency transactions into its presentational currency, US$, as described in ''Presentation of balances'' above.

 

Functional currency

 

The Company's functional currency is US$.

 

Transactions in currencies other than the functional currency of the Group entities are recorded at the exchange rates prevailing at the dates of the related transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, as well as from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognized in the Consolidated Statement of Comprehensive Loss. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated to the respective functional currencies of the Group's entities at the rates prevailing on the relevant balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates at the dates of the initial transactions.

 

The financial statements of the Group's foreign subsidiaries, where the local currency is the functional currency, are translated using exchange rates in effect at the end of the year for assets and liabilities and average exchange rates during the year for results of operations. The resulting foreign currency translation adjustment is recognized in other comprehensive income.

 

Property, plant and equipment

 

Property, plant and equipment is comprised of property and office equipment. Items of property, plant and equipment are stated at cost less any accumulated depreciation and any impairment losses. It is not Group policy to revalue any items of property, plant and equipment.

 

Depreciation is charged to the Consolidated Statement of Comprehensive Loss on a straight-line basis to write-off the cost of the assets over their expected useful lives as follows:

 

·      Property, plant and machinery         5 to 15 years

 

·      Office equipment                                3 to 10 years

 

Business combinations

 

Business combinations, including the Aegerion acquisition, are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. Fair values are attributed to the identifiable assets and liabilities unless the fair value cannot be measured reliably, in which case the value is subsumed into goodwill. In the consolidated financial statements, acquisition costs incurred are expensed and included in general and administrative expenses.

 

To the extent that settlement of all or any part of the consideration for a business combination is deferred, the fair value of the deferred component is determined through discounting the amounts payable to their present value at the date of the exchange. The discount component is unwound as an interest charge in the Consolidated Statement of Comprehensive Income over the life of the obligation. Any contingent consideration is recognized at fair value at the acquisition date and included in the cost of the acquisition. The fair value of contingent consideration at acquisition date is arrived at through discounting the expected payment (based on scenario modelling) to present value. In general, in order for contingent consideration to become payable, pre-defined revenues and/or milestone dates must be exceeded. Subsequent changes to the fair value of the contingent consideration will be recognized in profit or loss unless the contingent consideration is classified as equity, in which case it is not remeasured and settlement is accounted for within equity.

 

When the initial accounting for a business combination is determined provisionally, any adjustments to the provisional values allocated to the consideration, identifiable assets or liabilities (and contingent liabilities, if relevant) are made within the measurement period, a period of no more than one year from the acquisition date.

 

Frequently, the acquisition of pharmaceutical patents and licenses is effected through a non-operating corporate structure. As these structures do not represent a business, it is considered that the transactions do not meet the definition of a business combination. Accordingly, the transactions are accounted for as the acquisition of an asset. The net assets acquired are recognized at cost.

 

Intangible assets

 

Intangible assets primarily relate to developed technology on the Company's commercially marketed products and IPR&D. Intangible assets are recorded at fair value at the time of their acquisition and are stated in the Consolidated Statement of Financial Position, net of accumulated amortization and impairments, if applicable.

 

Acquired intangible assets outside business combinations are stated at the lower of cost less provision for amortization and impairment or the recoverable amount. Acquired intangible assets are amortized over their expected useful economic life on a straight-line basis. In determining the useful economic life, each acquisition is reviewed separately and consideration is given to the period over which the Group expects to derive economic benefit.

 

In connection with the acquisition of Aegerion, the Group acquired developed technology on metreleptin and lomitapide, which are amortized over the remaining patent lives through February 2026 and August 2027, respectively.

 

The useful life of other acquired intangible assets is as follows:

 

·      Software and hardware                      3-10 years

 

·      Website development                         5-10 years

 

Intangible assets acquired in 2016 as part of the acquisitions of Amryt AG and SomPharmaceuticals are currently not being amortized as the assets are still under development.

 

Factors which impact our judgement to capitalize certain research and development expenditures include the degree of regulatory approval for products and the results of any market research to determine the likely future commercial success of products being developed. Management reviews these factors each year to determine whether previous estimates as to feasibility, viability and recovery should be changed.

 

Impairment of non-financial assets

 

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and acquired intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Any impairment loss arising from the review is charged to the Consolidated Statement of Comprehensive Loss.

 

The Group assesses each asset or cash-generating unit annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the carrying value and value in use. These assessments require the use of estimates and assumptions such as discount rates, future capital requirements, general risks affecting the pharmaceutical industry and other risks specific to the individual asset. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. Fair value is generally determined as the present value of estimated future cash flows arising from the continued use of the asset, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Assets are grouped into the smallest group that generates cash inflows which are independent of other assets.

 

Taxes

 

Tax comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and taking into account any adjustments stemming from prior years. Deferred tax assets or liabilities are recognized where the carrying value of an asset or liability in the Consolidated Statement of Financial Position differs to its tax base and is accounted for using the statement of financial position liability method. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilized.

 

In connection with business combinations, deferred tax balances are recognized if related to temporary differences and loss carry-forwards at the acquisition date or if they arise as a result of the acquisition and are measured in accordance with IAS 12 Income Taxes.

 

Share-based payments

 

The Group issues share options as an incentive to certain senior management and staff. The fair value of options granted is recognized as an expense with a corresponding credit to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which the awards vest.

 

For equity-settled share-based payment transactions, the goods or services received and the corresponding increase in equity are measured directly at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If it is not possible to estimate reliably the fair value of the goods or services received, the fair value of the equity instruments granted as calculated using the Black-Scholes model is used as a proxy.

 

The Group may issue warrants to key consultants, advisers and suppliers in payment or part payment for services or supplies provided to the Group. The fair value of warrants granted is recognized as an expense. The corresponding credits are charged to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which the warrants vest. The fair value is measured using the Black-Scholes model if the fair value of the services received cannot be measured reliably.

 

The estimate of the fair value of services received is measured based on the Black-Scholes model using input assumptions, including weighted average share price, expected volatility, weighted average expected life and expected yield. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility is based on the historical volatility (calculated based on the expected life of the options). The Group has considered how future experience may affect historical volatility.

 

Employee Benefits

 

Defined contribution plans

 

The Group operates defined contribution schemes in various locations where employees are based. Contributions to the defined contribution schemes are recognized in the Consolidated Statement of Comprehensive Loss in the period in which the related services are received from the employee. Under these schemes, the Group has no obligation, either legal or constructive, to pay further contributions in the event that the fund does not hold sufficient assets to meet its benefit commitments.

 

 

3. Segment information

 

The Group is a global, commercial-stage biopharmaceutical company dedicated to commercializing and developing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases.

 

In 2018, the Group reported two operating segments: commercial and research and development. As a result of an internal reorganization, the Group now identifies one business segment. Corresponding items of the earliest period presented have been restated to reflect this change.

 

The Group currently operates as one business segment, pharmaceuticals, and is focused on the development and commercialization of two commercial products and two development products. The Group derives its revenues primarily from one source, being the pharmaceutical sector with high unmet medical need.

 

The Group's Chief Executive Officer, Joseph Wiley, is currently the Company's chief operating decision maker (''CODM''). The Group does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the Group does not accumulate discrete financial information with respect to separate service lines and does not have separate reportable segments.

 

The following table summarizes total revenues from external customers by product and by geographic region, based on the location of the customer. Revenues represent the revenue from the Group for the full year (which includes revenue from Aegerion, with acquired products and additional regions, from September 24, 2019 onward).

 

 

December 31, 2019

 

U.S.

EMEA

Other

Total

 

US$'000

 

Metreleptin.......................................................................

$           14,944

 

$        8,048

 

$          2,096

 

$       25,088

 

Lomitapide.......................................................................

10,616

 

18,985

 

2,659

 

32,260

 

Other..................................................................................

-

 

671

 

105

 

776

 

Total revenue...................................................................

 $           25,560

 

$      27,704

 

$          4,860

 

$       58,124

 

 

 

December 31, 2018

 

U.S.

EMEA

Other

Total

 

US$'000

 

Metreleptin.......................................................................

$            -

 

$         -

 

$               -

 

$            -

 

Lomitapide.......................................................................

-

 

15,132

 

978

 

16,110

 

Other..................................................................................

-

 

928

 

57

 

985

 

Total revenue...................................................................

$            -

 

$   16,060

 

$          1,035

 

$     17,095

 

 

Major Customers

 

For the year ended December 31, 2019, one customer accounted for 44% of the Group's net revenues and accounted for 44% of the Group's December 31, 2019 accounts receivable balance. For the year ended December 31, 2018, the Group generated over 76% of its lomitapide revenue in Italy, the Netherlands and Greece. The largest customer in 2018 was a hospital in Greece.

 

 

4. Cost of sales

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Cost of product sales................................................................................................

$           11,384

 

 

$           3,588

 

Amortization of acquired intangibles (see Note 12)

11,831

 

 

-

 

Amortization of inventory fair value step-up (see Note 15)

10,367

 

 

-

 

Royalty expenses

8,419

 

 

2,678

 

Total cost of sales

$           42,001

 

 

$           6,266

 

 

As a result of the acquisition of Aegerion in September 2019, the Group acquired certain inventory, which were measured at fair value on the acquisition date. Refer to Note 2, Accounting policies, for further discussion on the key assumptions utilized to estimate the fair value. The difference between the estimated fair value and the book value of the acquired inventory was amortized, using the straight-line method, over the estimated period that the Group intends to sell this inventory.

 

5. Share based payments

 

On July 10, 2019, the shareholders of the Company approved a resolution to give authority to the Company to undertake a consolidation of the existing ordinary shares in the capital of the Company under which every 6 existing ordinary shares were consolidated into one ordinary share.

 

In the table below, for presentational purposes, the number of share options and warrants outstanding at January 1, 2019 and 2018 and the share options and warrants granted and lapsing during the years ended December 31, 2019 and 2018 have been restated to reflect the 2019 6-for-1 share consolidation.

 

Under the terms of the Company's Employee Share Option Plan, options to purchase 14,481,720 shares were outstanding at December 31, 2019. Under the terms of this plan, options are granted to officers, consultants and employees of the Group at the discretion of the Remuneration Committee. A total of 11,330,641 share options were granted to directors and employees in 2019. There were no new share options granted during the year ended December 31, 2018.

 

The Company has issued warrants pre-2018 to key consultants, advisers and suppliers in payment or part payment for services or supplies provided to the Group.

 

There were no similar warrants granted during either of the years ended December 31, 2019 and December 31, 2018.

 

The terms and conditions of the grants are as follows, whereby all options are settled by physical delivery of shares:

 

Vesting conditions

 

The employee share options vest following a period of service by the officer or employee. The required period of service is determined by the Remuneration Committee at the date of grant of the options (usually the date of approval by the Remuneration Committee) and it is generally over a three-year period. There are no market conditions associated with the share option vesting periods.

 

Contractual life

 

The term of an option is determined by the Remuneration Committee provided that the term may not exceed a period of seven to ten years from the date of grant. All options will terminate 90 days after termination of the option holder's employment, service or consultancy with the Group except where a longer period is approved by the Board of Directors. Under certain circumstances involving a change in control of the Group, each option will automatically accelerate and become exercisable in full as of a date specified by the Board of Directors.

 

The number and weighted average exercise price (in Sterling pence) of share options and warrants per ordinary share is as follows:

 

Share Options

 

Warrants

 

Units

 

Weighted average exercise price (Sterling pence)

 

Units

 

Weighted average exercise price (Sterling pence)

Balance at January 1, 2018 (pre share consolidation)

19,696,586

 

 

19.16p

 

23,103,481

 

 

24.74p

Balance at January 1, 2018 (restated for 6:1 share consolidation)

3,282,764

 

 

114.96p

 

3,850,580

 

 

148.44p

Lapsed

(31,909

)

 

142.50p

 

(32,255

)

 

672.00p
 

Outstanding at December 31, 2018

3,250,855

 

 

115.20p

 

3,818,325

 

 

144.00p

Exercisable at December 31, 2018

1,327,406

 

 

116.83p

 

3,818,325

 

 

144.00p

 

 

 

 

 

 

 

 

Balance at January 1, 2019 (pre share consolidation)

3,250,855

 

 

115.20p

 

3,818,325

 

 

144.00p

Granted

11,330,641

 

 

117.01p

 

18,841,378

 

 

-

 

Lapsed

(99,776

)

 

197.66p

 

(3,472,783

)

 

144.00p

Exercised

-

 

 

-

 

 

(1,645,105

)

 

-

 

Outstanding at December 31, 2019

14,481,720

 

 

116.00p

 

17,541,815

 

 

0.03p

Exercisable at December 31, 2019

2,468,310

 

 

109.08p

 

17,541,815

 

 

0.03p

                       

 

The 18,841,378 warrants granted during the year ended December 31, 2019 consist of 8,065,000 zero cost warrants issued to acquire Aegerion, 5,911,722 warrants issued to investors in connection with the US$60,000,000 equity raise and 4,864,656 warrants that were issued in connection with the repurchase of ordinary shares from certain shareholders. Refer to Note 17, Share capital and reserves for further details on the warrants exercised during the year ended December 31, 2019.

 

Outstanding warrants at December 31, 2019 consisted of 17,196,273 zero cost warrants with no expiration date that were issued to Aegerion creditors in connection with the acquisition of Aegerion (see Note 6, Business combinations and asset acquisitions) and investors in connection with the US$60,000,000 equity raise (see Note 17, Share capital and reserves). The remaining warrants consisting of 345,542 warrants were issued in connection with the admission to the AIM in 2016 and any subsequent reference to warrants in this note relate to the warrants issued in 2016.

 

Fair value is estimated at the date of grant using the Black-Scholes pricing model, taking into account the terms and conditions attached to the grant. The following are the inputs to the model for the equity instruments granted during the year:

 

 

2019 Options Inputs

 

2019 Warrant Inputs

 

2018 Options Inputs

 

2018 Warrant Inputs

Days to Expiration

2,555

 

 

-

 

 

-

 

 

-

 

Volatility

27% - 48%

 

-

 

 

-

 

 

-

 

Risk free interest rate

0.38% - 0.83%

 

-

 

 

-

 

 

-

 

Share price at grant

75.84p - 121.5p

 

 -

 

-

 

 

-

 

                       

 

In 2019, a total of 11,330,641 share options exercisable at a weighted average price of £1.17 were granted. The fair value of share options granted in 2019 was £13,258,000/US$16,919,000. There were no new share options granted in 2018.

 

The share options outstanding as at December 31, 2019 have a weighted remaining contractual life of 6.19 years with exercise prices ranging from £0.76 to £1.50. The share options outstanding as at December 31, 2018 had a weighted remaining contractual life of 4.94 years with exercise prices ranging from £0.93 to £2.88.

 

The warrants outstanding as at December 31, 2019 have a weighted remaining contractual life of 1.3 years with an exercise price of £1.44. The remaining warrants outstanding as at December 31, 2018 had a weighted remaining contractual life of 0.25 years with an exercise price of £1.44.

 

The value of share options charged to the Consolidated Statement of Comprehensive Loss during the year is as follows:

 

December 31,

 

2019

 

2018

 

US$'000

Share option expense..............................................................................................

$                           841

 

 

$                       821

 

Total share option expense...................................................................................

$                           841

 

 

$                       821

 

 

 

6. Business combinations and asset acquisitions

 

Acquisition of Aegerion Pharmaceuticals

 

On May 20, 2019, Amryt entered into a Restructuring Support Agreement (as subsequently amended on June 12, 2019) and Plan Funding Agreement pursuant to which, among other matters, Amryt agreed to the acquisition of Aegerion Pharmaceuticals, Inc. (''Aegerion''), a former wholly-owned subsidiary of Novelion Therapeutics Inc. (''Novelion''). On May 20, 2019, Aegerion and its U.S. subsidiary, Aegerion Pharmaceuticals Holdings, Inc., filed voluntary petitions under Chapter 11 of Title 11 of the U.S. Code in the Bankruptcy Court. On September 24, 2019, Amryt completed the acquisition of Aegerion. Amryt acquired Aegerion upon its emergence from bankruptcy in an exchange for ordinary shares and zero cost warrants in Amryt. Amryt issued 85,092,423 effective shares at US$1.793 per share, which is made up of 77,027,423 ordinary shares and 8,065,000 zero cost warrants, to acquire Aegerion for a value of US$152,615,000.

 

The Company believes that the acquisition of Aegerion will enable the Group to advance the Group's ambition to create a global leader in rare and orphan diseases with a diversified offering of multiple development-stage and commercial assets and provides it with scale to support further growth.

 

As part of the acquisition of Aegerion, it was agreed, for certain Aegerion creditors who wished to restrict their percentage share interest in Amryt's issued share capital, to issue to the relevant Aegerion creditor, as an alternative to Amryt's ordinary shares, an equivalent number of new zero cost warrants to subscribe for Amryt's ordinary shares to be constituted on the terms of the zero cost warrant. Refer to Note 23, Related party transactions, for further discussion.

 

Relevant Aegerion creditors are entitled at any time to exercise the zero cost warrants, at which point in time, the Company would issue to that Aegerion creditor the relevant number of fully paid ordinary shares in return for the exercise of the zero cost warrants. Each zero cost warrant entitles the holder thereof to subscribe for one ordinary share. The zero cost warrants constitute the Company's direct and unsecured obligations and rank pari passu and without any preference among themselves (save for any obligations to be preferred by law) at least equally with the Company's other present and future unsecured and unsubordinated obligations. The zero cost warrants are not transferable except with the Company's prior written consent.

 

On November 14, 2019, the Company repurchased a combined 4,864,656 ordinary shares from Highbridge Tactical Master Fund L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77 Global Multi Strategy Alpha Master Limited. In exchange for the ordinary shares, these institutions were issued an equivalent number of zero cost warrants.

 

The table below reflects the fair value of the identifiable net assets acquired in respect of the acquisition completed during the year. Any amendments to fair values will be made within the twelve-month period from the date of acquisition, as permitted by IFRS 3 Business Combinations.

 

Provisional Fair Value at date of acquisition

 

US$'000

Assets

 

Non-current assets

 

Property, plant and equipment

$                                           276

 

Right of use assets

924

 

Intangible Assets

308,374

 

Other assets

2,334

 

Total non-current assets

311,908

 

 

 

Current assets

 

Cash and cash equivalents

24,985

 

Trade and other receivables

23,259

 

Inventory

45,959

 

Prepaid expenses and other assets

2,469

 

Total current assets

96,672

 

 

 

Total assets

408,580

 

 

 

Current liabilities

 

Accounts payable

5,137

 

Accrued liabilities

64,088

 

Lease liabilities - current

384

 

Provision for legal settlements - current

14,916

 

Total current liabilities

84,525

 

 

 

Non-current liabilities

 

Lease liabilities - long term

538

 

Long term debt

54,469

 

Convertible notes debt and equity components - long term

125,000

 

Provision for legal settlements - long term

7,821

 

Deferred tax liability

14,425

 

Total non-current liabilities

202,253

 

 

 

Total liabilities

286,778

 

 

 

Total identifiable net assets at fair value

121,802

 

Goodwill arising on acquisition

30,813

 

Consideration

152,615

 

 

 

Consideration

 

Issue of fully paid up ordinary shares and zero cost warrants

152,615

 

Total consideration

$                                    152,615

 

 

The acquired goodwill is attributable principally to the profit generating potential of the businesses, the assembled workforce and benefits arising from embedded infrastructure, that are expected to be achieved from integrating the acquired businesses into the Group's existing business. No amount of goodwill is expected to be deductible for tax purposes.

 

In the post-acquisition period to December 31, 2019, the business acquired during the current year contributed revenue of US$38,392,000 and a trading loss of US$17,239,000 to the Group's results.

 

The full year unaudited revenue and trading loss had the acquisitions taken place at the start of the year, would have been US$185,260,000 and US$53,057,000 respectively. In February 2019, the Aegerion Group out licensed the rights to JUXTAPID for distribution in Japan to Recordati Rare Diseases Inc. (''Recordati''). Included in the full year revenue total for 2019 is $28,495,000 relating to an upfront payment for the license and the transfer of the JUXTAPID marketing authorization to Recordati. The 2019 revenue total also includes a mix of product revenues to Japan from January 2019 until the end of the transition period in May 2019 and then royalty income from Recordati to Aegerion at a rate of 22.5% on net sales of JUXTAPID in Japan for the remaining part of the year.

 

The gross contractual value of trade and other receivables as at the dates of acquisition amounted to US$23,259,000, which approximated the fair value of these accounts as the amount not expected to be collected was insignificant.

 

The Group incurred acquisition and restructuring related costs of US$13,038,000 relating to external legal fees, advisory fees, due diligence costs and severance costs. These costs have been included in operating costs in the Consolidated Statement of Comprehensive Income.

 

The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis due to the relative size of the acquisition and the timing of the transaction. Any amendments to these fair values within the twelve-month timeframe from the date of acquisition will be disclosed in the 2020 consolidated financial statements, as stipulated by IFRS3.

 

Contingent Value Rights

 

Related to the transaction, Amryt issued Contingent Value Rights (''CVRs'') pursuant to which up to US$85,000,000 may become payable to Amryt's shareholders and optionholders, who were on the register prior to the completion of the acquisition on September 20, 2019, if certain approval and revenue milestones are met in relation AP101, Amryt's lead product candidate. If any such milestone is achieved, Amryt may elect to pay the holders of CVRs by the issue of Amryt shares or loan notes. If Amryt elects to issue Loan Notes to holders of CVRs, it will settle such loan notes in cash 120 days after their issue. If none of the milestones are achieved, scheme shareholders and optionholders will not receive any additional consideration under the terms of the CVRs. In these circumstances, the value of each CVR would be zero.

 

The terms of the CVRs are as follows:

·      The total CVR payable is up to US$85,000,000

·      This is divided into three milestones which are related to the success of AP101 (the Group's lead development asset, currently in Phase 3 clinical trials)

·      FDA approval

US$35,000,000 upon FDA approval

100% of the amount due if approval is obtained before December 31, 2021, with a sliding scale on a linear basis to zero if before July 1, 2022

·      EMA approval

US$15,000,000 upon EMA approval

100% of the amount due if approval is obtained before December 31, 2021, with a sliding scale on a linear basis to zero if before July 1, 2022

·      Revenue targets

US$35,000,000 upon AP101 revenues exceeding US$75,000,000 in any 12-month period prior to June 30, 2024

·      Payment can at the Board's discretion be in the form of either:

120-day loan notes (effectively cash), or

Shares valued using the 30 day / 45-day VWAP.

 

The CVRs were contingent on the successful completion of the acquisition and, accordingly, have been based on fair value as at September 24, 2019. In the Company-only accounts, the fair value of these CVRs have been classified as a financial liability in the Consolidated Statement of Financial Position and debited to cost of investment in subsidiary. On consolidation, given that CVRs were issued to legacy Amryt shareholders in their capacity as owners of the identified acquirer as opposed to the seller in the transaction, management concluded that the most appropriate classification would be to recognize the CVR as a distribution on consolidation instead of goodwill.

 

Fair value Measurement of CVRs

 

As at December 31, 2019, the fair value of the CVRs was estimated to be US$49,413,000. The value of the potential payout was calculated using the probability expected returns method. Using this method, the potential payment amounts were multiplied by the probability of achievement and discounted to present value (see Note 24, Fair value measurement and financial risk management, for fair value hierarchy applied and impact of key unobservable impact data). The probability adjusted present values took into account published orphan drug research data and statistics which were adjusted by management to reflect the specific circumstances applicable to the type of product acquired in the Amryt GmbH transaction. A discount rate of 16.5% was used in the calculation of the fair value of the CVR for the year ended December 31, 2019. Management was required to make certain estimates and assumptions in relation to revenue forecasts, timing of revenues and probability of achievement of commercialization of AP101. However, management notes that, due to issues outside their control (i.e. regulatory requirements and the commercial success of the product), the timing of when such revenue targets may occur may change. Such changes may have a material impact on the assessment of the fair value of the CVRs.

 

Amryt reviews this contingent consideration on a regular basis as the probability adjusted fair values are being unwound as financing expenses in the Consolidated Statement of Comprehensive Loss over the life of the obligation. Contingent consideration is reviewed on a quarterly basis and the appropriate finance charge is booked in the consolidated statement of income on a quarterly basis. The Group expects to read out top-line data from the Phase 3 trial of AP101 in Epidermolysis Bullosa (''EB'') in the second half of 2020, followed by applications for approval from the FDA and the EMA, if top-line data is positive. Coupled with this, management has completed its annual forecast and revenues and costs reflect these current expectations.

 

The total non-cash finance charge recognized in the Consolidated Statement of Comprehensive Loss for the year ended December 31, 2019 is US$1,511,000.

 

Acquisition of Amryt AG (previously ''Birken'')

 

Amryt DAC signed a conditional share purchase agreement to acquire Amryt AG on October 16, 2015 (''Amryt AG SPA''). The Amryt AG SPA was completed on April 18, 2016 with Amryt DAC acquiring the entire issued share capital of Amryt GmbH. The consideration included contingent consideration comprising milestone payments and sales royalties as follows:

 

·      Milestone payments of:

€10,000,000 on receipt of first marketing approval by the EMA of Episalvan, paid on the completion date (April 18, 2016);

Either (i) €5,000,000 once net ex-factory sales of Episalvan have been at least €100,000 or (ii) if no commercial sales are made within 24 months of EMA first marketing approval (being January 14, 2016), €2,000,000 24 months after receipt of such approval, which was paid in January 2018, and €3,000,000 following the first commercial sale;

€10,000,000 on receipt of marketing approval by the EMA or FDA of a pharmaceutical product containing Betulin as its API for the treatment of EB;

€10,000,000 once net ex-factory sales/net revenue in any calendar year exceed €50,000,000;

€15,000,000 once net ex-factory sales/ net revenue in any calendar year exceed €100,000,000;

·      Cash consideration of €150,000, due and paid on the completion date (April 18, 2016); and

·      Royalties of 9% on sales of Episalvan products for 10 years from first commercial sale;

 

Fair Value Measurement of Contingent Consideration

 

As of December 31, 2019, the fair value of the contingent consideration was estimated to be US$53,048,000 (2018: US$47,316,000). The fair value of the royalty payments was determined using probability weighted revenue forecasts and the fair value of the milestone payments was determined using probability adjusted present values (see Note 24, Fair value measurement and financial risk management, for fair value hierarchy applied and impact of key unobservable impact data). The probability adjusted present values took into account published orphan drug research data and statistics which were adjusted by management to reflect the specific circumstances applicable to the type of product acquired in the Amryt GmbH transaction. A discount rate of 24.4% (2018: 28.5%) was used in the calculation of the fair value of the contingent consideration for the year ended December 31, 2019. At that time management anticipated that AP101 for EB would be ready to launch in 2019. However, management noted that due to issues outside their control, the timing of when such revenue targets may occur may change. Such changes may have a material impact on the assessment of the fair value of the contingent consideration.

 

Amryt reviews the contingent consideration on a regular basis as the probability adjusted fair values are being unwound as financing expenses in the Consolidated Statement of Comprehensive Loss over the life of the obligation. The finance charge is being unwound as a financing expense in the Consolidated Statement of Comprehensive Loss on a quarterly basis.

 

The total non-cash finance charge recognized in the Consolidated Statement of Comprehensive Income for the year ended December 31, 2019 is US$6,740,000 (2018: US$10,566,000).

 

In January 2019, the Group received the results of an unblinded interim efficacy analysis for the Phase 3 trial of AP101 in EB. This analysis was conducted by an independent data safety monitoring committee and recommended that the trial should continue with an increase of 48 patients in the study to a total of 230 evaluable patients in order to be able to achieve 80% statistical power. The Group expects to read out top-line data from this trial in the second half of 2020, followed by applications for approval from the FDA and the EMA, if top-line data is positive. Coupled with this, management has completed its annual forecast and revenues and costs have been amended to reflect current expectations. These factors have resulted in a change to the probability weighted revenue forecasts and the probability of the adjusted present values which are used in the calculation of the contingent consideration balance and impact the amount being unwound to the consolidated statement of comprehensive income.

 

 

 

 

7. Operating loss for the year

 

Operating loss for the year is stated after charging (crediting):

 

 

December 31,

 

2019

 

2018

 

US$'000

Fees payable to the Group's auditor and their associates

$                        611

 

 

$                      106

 

Changes in inventory expensed (excluding fair value step-up)

11,335

 

 

1,700

 

Amortization of inventory fair value step-up

10,367

 

 

-

 

Research and development expenses

15,827

 

 

10,703

 

Share based payments

841

 

 

821

 

Pension costs

769

 

 

583

 

Depreciation of property, plant and equipment

698

 

 

317

 

Amortization of intangible assets

11,957

 

 

50

 

Operating lease rentals

170

 

 

300

 

Foreign exchange (gains) losses

$                    (3,750

)

 

$                       223

 

 

8. Employees

 

Including the directors, the Group's average number of employees during the year was 99 (2018: 61).

 

Aggregate remuneration comprised:

 

December 31,

 

2019

 

2018

 

US$'000

Wages and salaries

$                   17,268

 

 

$                    7,249

 

Social security costs

2,037

 

 

1,005

 

Pension costs - employees

769

 

 

583

 

Directors' remuneration

2,555

 

 

1,565

 

Shared based payments - directors

510

 

 

175

 

Shared based payments - employees/consultants

331

 

 

646

 

Total employee costs

$                   23,470

 

 

$                  11,223

 

 

The directors of the Company held the following share options over shares of Amryt Pharma plc at December 31, 2019:

 

 

December 31, 2019

Director

Number

 

Joseph Wiley

6,437,460

 

 

0.76p - 121.50p

November 27, 2024 - November 4, 2026

           

 

Rory Nealon was a director of the Company throughout 2018 and resigned as a director of the Company on September 24, 2019.

 

The options held by the directors of the Company at December 31, 2018 have been restated to reflect the 6:1 share consolidation in 2019.

 

December 31, 2018

Director

Number

 

Exercise price
(Sterling pence)

Expiration Date

Joseph Wiley

343,521

 

 

120.72p

November 27, 2024

Rory Nealon

137,409

 

 

120.72p

November 27, 2024

 

No share options were granted to any of the directors in 2018.

 

Further information on the compensation of key management personnel is included in Note 23, Related party transactions, of these financial statements.

 

 

9. Net finance expense

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Interest on loans......................................................................................................

$                       8,481

 

 

$                      1,603

 

Charges and fees paid............................................................................................

120

 

 

20

 

Interest received......................................................................................................

(92

)

 

(5

)

Foreign exchange losses (gains)............................................................................

(3,750

)

 

223

 

Total..........................................................................................................................

$                       4,759

 

 

$                      1,841

 

 

 

10. Tax on ordinary activities

 

A corporation tax credit of US$1,226,000 arises in the year ended December 31, 2019 (2018: charge of US$43,000). A reconciliation of the expected tax benefit computed by applying the tax rate applicable in the primary jurisdiction, the Republic of Ireland, to the loss before tax to the actual tax credit is as follows:

 

December 31,

 

2019

 

2018

 

US$'000

 

Loss before tax............................................................................................

$             (66,760

)

 

$              (30,444

)

Tax credit at Irish corporation tax rate of 12.5%..................................

(8,345

)

 

(3,806

)

Effect of:

 

 

 

Movement in unrecognized deferred tax assets....................................

3,508

 

 

4,182

 

Permanent differences...............................................................................

6,474

 

 

43

 

Differences in overseas taxation rates....................................................

(2,863

)

 

(376

)

Total tax charge on loss on ordinary activities

$               (1,226

)

 

$                      43

 

 

At December 31, 2019 and 2018, the Group had unutilized net operating losses in the following jurisdictions as follows:

 

 

December 31,

 

2019

 

2018

 

US$'000

Ireland.......................................................................................................................

$                 53,266

 

 

$                 36,428

 

United States............................................................................................................

36,334

 

 

-

 

Germany...................................................................................................................

26,228

 

 

27,236

 

United Kingdom......................................................................................................

16,828

 

 

7,812

 

ROW..........................................................................................................................

-

 

 

315

 

Total..........................................................................................................................

$               132,656

 

 

$                 71,791

 

 

The deferred tax asset on tax losses of US$25,858,892 (2018: US$14,503,000), which was calculated at corporation tax rates ranging from 12.5% to 32%, has not been recognized due to the uncertainty of the recovery. Tax losses in Ireland, Germany and the UK can be carried forward indefinitely. U.S. losses related to tax periods prior to 2018 can be carried forward for 20 years while losses from 2018 onwards can be carried forward indefinitely.

 

Due to historical changes in ownership of the U.S. business, the U.S. tax losses carried forward are restricted in how they can be used against future profits of the Group.

 

All current and deferred tax related charges are recognized in the Consolidated Statement of Comprehensive Loss.

 

 

11. Loss per share - basic and diluted

 

The weighted average number of shares in the loss per share (''LPS'') calculation, reflects the weighted average total actual shares of Amryt Pharma plc in issue at December 31, 2019, as adjusted (see below).

 

Issued share capital - ordinary shares of £0.06 each

 

 

Number of shares

 

Weighted average shares

December 31, 2019.......................................................................................

154,498,887

 

 

75,871,562

 

December 31, 2018.......................................................................................

274,817,283

 

 

274,817,283

 

December 31, 2018, as adjusted................................................................

45,802,880

 

 

45,802,880

 

 

The number of shares in issue at December 31, 2018 has been adjusted to reflect the share consolidation on July 10, 2019, whereby each ordinary shareholder received one ordinary share for every six shares held at that date.

 

The calculation of loss per share is based on the following:

 

December 31,

 

2019

 

2018

Loss after tax attributable to equity holders of the Company (US$'000)

$               (65,535

)

 

$               (30,487

)

Weighted average number of ordinary shares in issue

75,871,562

 

 

45,802,880

 

Fully diluted average number of ordinary shares in issue

75,871,562

 

 

45,802,880

 

Basic and diluted loss per share (US$)

$                   (0.86

)

 

$                   (0.67

)

 

The basic and diluted loss per share for 2019 of US$0.86 (2018: US$0.67) was calculated using the post consolidation number of ordinary shares in issue.

 

Where a loss has occurred, basic and diluted LPS are the same because the outstanding share options and warrants are anti-dilutive. Accordingly, diluted LPS equals the basic LPS. The share options and warrants outstanding as at December 31, 2019 totaled 32,023,535 (2018: 7,069,180 as restated) and are potentially dilutive.

 

 

12. Intangible assets and goodwill

 

The following table summarizes the Group's intangible assets and goodwill:

 

Developed technology - metreleptin

 

Developed technology - lomitapide

 

In process R&D

 

Other intangible assets

 

Total intangible assets

 

Goodwill

 

US$'000

Cost

 

 

 

 

 

 

 

 

 

 

 

At January 1, 2018

$               -

 

 

$              -

 

 

$         62,498

 

 

$             114

 

 

$           62,612

 

 

$                -

 

Additions

-

 

 

-

 

 

-

 

 

155

 

 

155

 

 

-

 

Disposals

-

 

 

-

 

 

-

 

 

(1

)

 

(1

)

 

-

 

Foreign exchange movement

-

 

 

-

 

 

(2,407

)

 

(10

)

 

(2,417

)

 

-

 

At December 31, 2018

-

 

 

-

 

 

60,091

 

 

258

 

 

60,349

 

 

-

 

Additions

-

 

 

-

 

 

-

 

 

74

 

 

74

 

 

-

 

Acquired assets

185,000

 

 

123,000

 

 

-

 

 

374

 

 

308,374

 

 

30,813

 

Impairment charge

-

 

 

-

 

 

(4,670

)

 

-

 

 

(4,670

)

 

-

 

Foreign exchange movement

-

 

 

-

 

 

(1,160

)

 

(5

)

 

(1,165

)

 

-

 

At December 31, 2019

$      185,000

 

 

$     123,000

 

 

$         54,261

 

 

$             701

 

 

$         362,962

 

 

$         30,813

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated amortization

 

 

 

 

 

 

 

 

 

 

At January 1, 2018

-

 

 

-

 

 

-

 

 

5

 

 

5

 

 

-

 

Amortization charge

-

 

 

-

 

 

-

 

 

50

 

 

50

 

 

-

 

Amortization charge on disposals

-

 

 

-

 

 

-

 

 

(1

)

 

(1

)

 

-

 

Foreign exchange movement

-

 

 

-

 

 

-

 

 

(2

)

 

(2

)

 

-

 

At December 31, 2018

-

 

 

-

 

 

-

 

 

52

 

 

52

 

 

-

 

Amortization charge

7,688

 

 

4,143

 

 

-

 

 

126

 

 

11,957

 

 

-

 

Foreign exchange movement

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

At December 31, 2019

$          7,688

 

 

$         4,143

 

 

$                -

 

 

$             178

 

 

$           12,009

 

 

$                 -

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2018

$               -

 

 

$              -

 

 

$         60,091

 

 

$             206

 

 

$           60,297

 

 

$                 -

 

At December 31, 2019

$      177,312

 

 

$     118,857

 

 

$         54,261

 

 

$             523

 

 

$         350,953

 

 

$          30,813

 

 

 

 

Developed technology on commercially marketed products

 

In connection with the acquisition of Aegerion in September 2019, the Group acquired developed technology, metreleptin and lomitapide. Refer to Note 2, Accounting policies - critical accounting judgements and key sources of estimation uncertainty, for further discussion on the valuation related to the developed technology, including the key assumptions utilized. These intangible assets are amortized over their estimated useful lives and the remaining useful lives for metreleptin and lomitapide are approximately 6.2 and 7.7 years, respectively, as of December 31, 2019.  At the reporting date, the Group reviews its intangible assets for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. At December 31, 2019, there were no events or changes in circumstances that indicated the carrying value of metreleptin and lomitapide may not be recoverable, as such there was no impairment charge recorded during the year ended December 31, 2019.

 

The amortization associated with metreleptin and lomitapide is recorded as part of cost of sales. As of December 31, 2019, the estimated amortization expense related to these intangibles for future periods is as follows:

 

Metreleptin

 

Lomitapide

Years Ending December 31,.................................................................................

US$'000

2020..........................................................................................................................

$                28,831

 

 

$                15,537

 

2021..........................................................................................................................

28,831

 

 

15,537

 

2022..........................................................................................................................

28,831

 

 

15,537

 

2023..........................................................................................................................

28,831

 

 

15,537

 

2024..........................................................................................................................

28,831

 

 

15,537

 

Thereafter................................................................................................................

33,157

 

 

41,172

 

Total intangible assets subject to amortization................................................

$             177,312

 

 

$              118,857

 

 

In-process R&D

 

As a result of the acquisition of Amryt GmbH, in 2016, the Group recognized in-process R&D costs of US$54,268,000 which is related to the Group's lead development asset, AP101. The Group reviews the carrying amount of AP101 on an annual basis to determine whether there are any indications that the asset has suffered an impairment loss. If any such indications exist, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Impairment indications include events causing significant changes in any of the underlying assumptions used in the income approach utilized in valuing in process R&D. These key assumptions are: the probability of success; the discount factor; the timing of future revenue flows; market penetration and peak sales assumptions; and expenditures required to complete development.

 

These cash flows are projected forward for a further 10 years to 2032 using projected revenue and cost growth to determine the basis for an annuity-based terminal values. The terminal values are used in the value in use calculation. The value in use represents the present value of the future cash flows, including the terminal value, discounted at a rate that is considered appropriate for the Group's size and structure.

 

The key assumptions employed in arriving at the estimates of future cash flows are subjective and include projected EBITDA, an orphan drug market-based probability chance of success, net cash flows, discount rates and the duration of the discounted cash flow model. The assumptions and estimates used were derived from a combination of internal and external factors based on historical experience. The pre-tax discount rate used in 2019 and 2018 was 24.4% and 28.5%, respectively. The market-based probability chance of success is based on market benchmarks for orphan drugs, which is approximately 72% (same as 2018).

 

The value-in-use calculation is subject to significant estimation, uncertainty and accounting judgements and key sensitivities arise in the following areas:

 

·      In the event that there was a variation of 10% in the assumed level of future growth in revenues, which would, in management's view, represent a reasonably likely range of outcomes, this variation would not result in an impairment loss at December 31, 2019.

 

·      In the event there was a 10% increase in the discount rate used in the value in use model which would in management's view represent a reasonably likely range of outcomes, this variation would not result in an impairment loss at December 31, 2019.

 

The Group made changes in the assumptions used in the assessment of these carrying value of the AP101 asset in 2019. In January 2019, the Group received the results of an unblinded interim efficacy analysis from the Phase 3 trial of AP101 in EB. This analysis was conducted by an independent data safety monitoring committee and recommended that the trial should continue with an increase of 48 patients in the study to a total of 230 evaluable patients in order to be able to achieve 80% statistical power. The Group expects to read out top-line data in the second half of 2020, followed by applications for approval from the FDA and the EMA, if top-line data is positive. Coupled with this, management has completed its annual forecast and revenues and costs have been amended to reflect current expectations. The Group also adjusted the discount rate used in the discounted cash flow model, reducing the rate from 28.5% in 2018 to 24.4%. The acquisition of Aegerion in 2019 has significantly increased the size of the Group and also changed the debt and equity structure of the Group. As a result, management believed it was appropriate to update the discount rate to reflect the new structure of the Group. These factors have resulted in a change to the probability weighted revenue forecasts and the probability of the adjusted present values used in 2019.

 

Additionally, as a result of the acquisition of Som Therapeutics Corp., in 2016, the Group recognized in-process R&D costs of US$4,522,000 as an intangible. This is related to the Group's development project AP102, which is an early stage drug asset. AP102 may represent a novel, next generation somatostatin analogue (''SSA'') peptide medicine for patients with rare neuroendocrine diseases, where there is a high unmet medical need, including acromegaly. Acromegaly is a rare endocrine disorder in which the body produces excessive growth hormone, leading to abnormal growth throughout the body over time. The Group also reviews the carrying amounts of AP102 on an annual basis to determine whether there are any indications that those assets have suffered an impairment loss.

 

In 2019, following the acquisition of Aegerion by the Group, a decision was made not to pursue the development of AP102 and therefore, the Group has written off this asset, resulting in an impairment charge of US$4,670,000 recognized as other expense during the year ended December 31, 2019. The decision to impair this intangible asset is primarily based on the grounds that the acquisition of Aegerion has been transformational for the Group, as it has now become a global, commercial-stage biopharmaceutical company dedicated to commercializing and developing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases. The Group's diversified portfolio is comprised of two commercial rare disease products, as well as a development-stage pipeline focused on rare skin diseases. Since the commercial products, lomitapide for the treatment of homozygous familial hypercholesterolemia (''HoFH''), and metreleptin for the treatment of generalized lipodystrophy (''GL'') and partial lipodystrophy (''PL''), have each been sold globally through the Group's commercial infrastructure for over six years, management believes it is in the best interest of the Group to concentrate resources on these new development pipeline activities which will better complement the existing commercial products. The Group may look to partner AP102 in the long-term future but in the short and medium term, the Group will continue to concentrate on AP101, AP103 and expansion opportunities for the existing commercial products.

 

Other intangible assets

 

Other intangible assets include website costs and the Group's computer software and hardware. The amortization associated with computer software, hardware and website costs is recorded in both SG&A and R&D expenses. These assets are stated at cost and amortized using straight-line method based on the estimated economic lives, ranging from 3 - 10 years.

 

 

 

Goodwill

 

During 2019, the Group completed the acquisition of Aegerion, which resulted in aggregate goodwill of US$30,813,000. Refer to Note 6, Business combinations and asset acquisitions, for further details. The Group believes that the business, as a whole, represents a single CGU, as it is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Additionally, the Group only operates in one business segment and does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the Group does not accumulate discrete financial information with respect to separate service lines and does not have separate reportable segments.

 

Goodwill is subject to impairment testing on an annual basis.  The recoverable amount of the Group's CGU is determined based on a value-in-use computation. The Group's value-in-use calculations included the cash flow projections based on the 2020 budget which has been approved by the Board of Directors and the Group's strategic plan for a further three years using projected revenue and cost growth rates of between 0% and 9%. At the end of the four-year forecast period, the terminal value, based on a long-term growth rate of 2%, was used in the value-in-use calculations. The value-in-use represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to the Group. The key assumptions employed in arriving at the estimates of future cash flows are subjective and include projected EBITDA, net cash flows, discount rates and the duration of the discounted cash flow model. The Group have used a discount rate of 16.5% which is a conservative estimate for the Group as well as the Group's risk profile.

 

The 2019 annual goodwill impairment testing process resulted in no impairment for the year ended December 31, 2019.

 

 

 

 

13. Property, plant and equipment

 

 

Property

 

Plant and Machinery

 

Office Equipment

 

Right-of-use Asset

 

 

Total

 

US$'000

Cost

 

 

 

 

 

 

 

 

 

 

At January 1, 2018

$          401

 

$      1,077

 

$          389

 

$             -

 

 

$         1,867

Additions

-

 

11

 

69

 

-

 

 

80

Disposals

-

 

(7)

 

(21)

 

-

 

 

(28)

Foreign exchange movement

(15)

 

(42)

 

(16)

 

-

 

 

(73)

At December 31, 2018

$          386

 

$      1,039

 

$          421

 

$             -

 

 

$         1,846

Additions

6

 

253

 

167

 

152

 

 

578

Impact of IFRS 16 adoption

-

 

-

 

-

 

874

 

 

874

Acquired assets

-

 

276

 

-

 

924

 

 

1,200

Disposals

-

 

(114)

 

(32)

 

-

 

 

(146)

Foreign exchange movement

(9)

 

(22)

 

(9)

 

50

 

 

10

At December 31, 2019

$          383

 

$      1,432

 

$          547

 

$        2,000

 

 

$         4,362

 

 

 

 

 

 

 

 

 

 

 

 

Property

 

Plant and Machinery

 

Office Equipment

 

Right-of-use Asset

 

 

Total

 

US$'000

Accumulated Depreciation

 

 

 

 

 

 

 

 

 

 

At January 1, 2018

$          176

 

$         201

 

$          109

 

$           -

 

 

$            486

Depreciation charge

103

 

137

 

77

 

-

 

 

317

Depreciation charged on disposals

-

 

(7)

 

(21)

 

-

 

 

(28)

Foreign exchange movement

(10)

 

(12)

 

(5)

 

-

 

 

(27)

At December 31, 2018

269

 

319

 

160

 

-

 

 

748

Depreciation charge

90

 

162

 

64

 

382

 

 

698

Depreciation charged on disposals

-

 

(71)

 

(32)

 

-

 

 

(103)

Foreign exchange movement

(6)

 

(6)

 

(5)

 

-

 

 

(17)

At December 31, 2019

$          353

 

$         404

 

$          187

 

$          382

 

 

$         1,326

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

 

 

 

 

At December 31, 2018

117

 

720

 

261

 

-

 

 

1,098

At December 31, 2019

$            30

 

$      1,028

 

$          360

 

$       1,618

 

 

$         3,036

 

 

 

 

14. Trade and other receivables

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Trade receivables

$              28,607

 

 

$            3,572

 

Accrued income and other debtors

5,934

 

 

2,326

 

VAT recoverable

1,846

 

 

29

 

Trade and other receivables

$              36,387

 

 

$            5,927

 

 

Trade receivables at December 31, 2019 includes US$752,000 (2018: US$338,000) which is due greater than 120 days. No impairment is considered necessary.

 

The December 31, 2019 accrued income and other debtors balance includes US$857,000 (2018: US$1,546,000) in relation to prepaid Phase 3 clinical trial costs.

 

 

15. Inventory

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Raw materials

$                17,689

 

 

$                303

 

Work in progress

2,488

 

 

782

 

Finished goods

23,446

 

 

1,052

 

Inventories

$                43,623

 

 

$             2,137

 

 

In 2019, a total of US$11,335,000 (2018: US$1,700,000) of inventories was included in the profit or loss as an expense (excluding the fair value step-up).

 

The fair value of net inventory acquired as part of the acquisition of Aegerion on September 24, 2019 amounted to US$45,959,000, net of US$61,842,000 of non-saleable inventory acquired in connection with the acquisition of Aegerion. The non-saleable inventories were determined based on the expiration dates and future manufacturing commitments which could result in inventory levels in excess of forecast demand. Under IFRS 3, the finished goods inventory on hand at the date of acquisition was valued at the expected selling price less the sum of (a) remaining costs of disposal and (b) a reasonable profit margin for the selling effort of the acquiring entity based on the EBITDA margin as a percentage of sales. The costs to dispose were calculated based on the average costs as a percentage of revenue through the period in which the current finished goods inventory is expected to be sold. This resulted in a non-cash step up at the valuation of finished goods inventory at September 24, 2019 of US$28,068,000. The non-cash step up in inventory is being unwound to the Consolidated Statement of Comprehensive Loss over the period in which this saleable inventory is expected to be sold which is less than one year. At December 31, 2019, US$17,701,000 of this non-cash inventory step up is included in finished good inventory.

 

All inventory was reviewed at year end and no impairment was deemed necessary.

 

 

 

 

16. Cash and cash equivalents

 

December 31,

 

2019

 

2018

 

US$'000

 

Cash at bank available on demand

$                 65,197

 

 

$                    9,864

 

Restricted cash

2,032

 

 

1,362

 

Total cash and cash equivalents

$                 67,229

 

 

$                  11,226

 

 

Cash and cash equivalents include cash at bank available on demand and restricted cash.

 

Of the US$2,032,000 held in restricted cash, US$1,219,000 was held in an escrow account set-up in accordance with Aegerion's bankruptcy plan as approved by the U.S. Bankruptcy Court to meet the costs associated with the bankruptcy process. Additionally, US$813,000 is cash held by a third-party distributor at year end; the funds from the third-party distributor were transferred to Amryt in January 2020.

 

 

17. Share capital and reserves

 

Details of issued ordinary shares with a nominal value of Sterling 6 pence (2018: 1 pence) each are in the table below. The ordinary shares and share price in 2018 were adjusted for the share consolidation completed in 2019.

Date

Number of ordinary shares

Number of deferred shares

Total Share Capital
US$'000

Total Share Premium
US$'000

At December 31, 2019

159,363,543

 

-

 

$           11,918

 

$            2,422

 

At December 31, 2018

274,817,283

 

43,171,134

 

$           25,198

 

$          68,233

 

 

 

The number of ordinary shares issued at December 31, 2019 includes treasury shares of 4,864,656.

 

The Company repurchased all of the 43,171,134 deferred ordinary shares in July 2019 for an aggregate consideration of £0.01 and the Deferred Shares were immediately cancelled. Simultaneously the Company allotted four additional ordinary shares of par value £0.01 each in the capital of the Company, in connection with a 6 to 1 consolidation of the Company's share capital.

 

In an US$8,000,000 equity raise, the company issued 7,346,189 ordinary shares, 4,580,288 shares in August 2019 and 2,765,901 shares in September 2019.

 

On September 24, 2019, the following equity issuances were conducted:

 

·      77,027,423 ordinary shares and 8,065,000 warrants for a consideration of US$152,615,000 were issued as part of the Aegerion acquisition whereby the company acquired the entire share capital of Aegerion.

 

·      27,541,944 ordinary shares and 5,911,722 warrants were issued as part of a US$60,000,000 fund raising.

 

On December 27, 2019, the Company issued 1,645,105 shares to certain shareholders in consideration of warrants.

 

Share Capital

Share capital represents the cumulative par value arising upon issue of ordinary shares of Sterling 6 pence each.

The ordinary shares have the right to receive notice of, attend and vote at general meetings and participate in the profits of the Company.

 

Share Premium

Share premium represents the consideration that has been received in excess of the nominal value on issue of share capital net of issue costs and transfers to distributable reserves. By special resolution of the Company duly passed on September 23, 2019, in accordance with section 283 of the UK Companies Act 2006, it was resolved that the entire amount outstanding to the credit of the share premium account and capital redemption reserve of the Company be cancelled. The reduction in capital, amounting to US$268,505,000, representing the entire amount of share premium at that time, was approved by the High Court of Justice of England and Wales on November 5, 2019.

 

Warrant reserve

The warrant reserve represents zero cost warrants issued as part of the equity raise on September 24, 2019 net of issue costs apportioned to warrants issued and additional warrants issued to certain shareholders on November 14, 2019. Each warrant entitles the holder to subscribe for one ordinary share at zero cost. On December 27, 2019, the company issued 1,645,105 ordinary shares in consideration for certain warrants.

 

Treasury Shares

On November 14, 2019, the Company repurchased a combined 4,864,656 ordinary shares from certain shareholders. In exchange for the ordinary shares, these shareholders were issued an equivalent number of zero cost warrants. These ordinary shares are now held as treasury shares.

 

Share based payment reserve

Share based payment reserve relates to the charge for share based payments in accordance with IFRS 2.

 

Merger reserve

The merger reserve was created on the acquisition of Amryt DAC by Amryt Pharma plc in April 2016. Ordinary shares in Amryt Pharma plc were issued to acquire the entire issued share capital of Amryt DAC. Under section 612 of the UK Companies Act 2006, the premium on these shares has been included in a merger reserve.

 

Reverse acquisition reserve

The reverse acquisition reserve arose during the period ended December 31, 2016 in respect of the reverse acquisition of Amryt Pharma plc by Amryt DAC. Since the shareholders of Amryt DAC became the majority shareholders of the enlarged Group, the acquisition is accounted for as though there is a continuation of Amryt DAC's financial statements. The reverse acquisition reserve is created to maintain the equity structure of Amryt Pharma plc in compliance with UK company law.

 

Equity component of convertible notes

The equity component of convertible notes represents the equity component of the US$125,000,000 convertible debt and is measured by determining the residual of the fair value of the instrument less the estimated fair value of the liability component. The equity component is recognized in equity and is not subsequently remeasured.

 

Other distributable reserves

Other distributable reserves comprise the following:

·      Distribution of the share premium amount on November 6, 2019 of US$268,505,000.

·      A deemed distribution of US$47,902,000 arising from the issuance of CVRs.

·      A deemed distribution of US$2,969,000 arising from the scheme of arrangement in September 2019 whereby Amryt Pharma plc, which was incorporated in July 2019, became a 100% shareholder of Amryt Pharma Holdings Limited (formerly named Amryt Pharma plc) (the ''Acquisition of subsidiary without a change of control'').

 

Currency translation reserve

The currency translation reserve arises on the retranslation of non-U.S, dollar denominated foreign subsidiaries.

 

 

Accumulated deficit

Accumulated deficit represents losses accumulated in previous periods and the current year.

 

 

18. Deferred tax liability

 

 

Total

 

US$'000

At January 1, 2018..............................................................................................................................................

$                6,161

 

Movement during the year.................................................................................................................................

-

 

At December 31, 2018........................................................................................................................................

6,161

 

Net movement during the year..........................................................................................................................

12,760

 

At December 31, 2019........................................................................................................................................

$              18,921

 

 

A deferred tax liability arose in 2016 on the acquisition of Amryt GmbH. An intangible asset was recognized in relation to in process R&D. As the intangible asset only arises on consolidation and there may not be tax deductions available on sale, its tax base is nil.

 

When the intangible asset is amortized the tax difference will be reduced and the movement in the deferred tax liability will be recognized in profit or loss. The in-process R&D is currently not being amortized and as a result the deferred tax liability in relation to the Birken acquisition continues to be in place.

 

A deferred tax liability, in the amount of US$14,425,000, also arose in 2019 in connection with the acquisition of Aegerion Pharmaceuticals, Inc. (see Note 6, Business combinations and asset acquisitions). The intangible assets have been recognized at their fair value. As the transaction was completed as a share acquisition, the intangible assets were not re-based to fair value from a tax perspective with a deferred tax liability being recognized on acquisition. These intangibles are being amortized and the resulting reduction in the deferred tax liability will be recognized in profit or loss.

 

 

19. Long term loan

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Long term loan

$             81,610

 

 

$              17,164

 

Long term loan interest

-

 

 

1,847

 

Long term loan and interest

$             81,610

 

 

$              19,011

 

 

In December 2016, Amryt DAC entered into a euro denominated €20,000,000 facility agreement (''facility'') with the European Investment Bank (''EIB'') on attractive terms for the Group. The facility was significant because it provided non-dilutive funding that secured the Group's near and mid-term funding needs for its lead development candidate, AP101.

 

The facility was split into three tranches, with €10,000,000 available immediately and two further tranches of €5,000,000 available upon the achievement of certain milestones. In April 2017, the Group drew down the first tranche of €10,000,000. In October 2017, the terms of the second tranche of €5,000,000 were amended by the EIB resulting in the Group being given option to draw this amount down on demand. The Group drew down this second tranche of €5,000,000 in September 2018. In December 2018, the terms of the third tranche were amended by the EIB to give the Group the option to draw down this final tranche on demand on the condition that the EASE Phase 3 trial interim efficacy results were positive. In January 2019, the Group received the results of this unblinded interim efficacy analysis. The Independent Monitoring Committee recommended that the trial should continue with an increase in patients. Following this positive result, the original conditions of the final tranche were waived and the final tranche of €5,000,000 was drawn down in February 2019. The facility was secured over the Intellectual Property assets of the Group and there was also a negative pledge whereby Amryt cannot permit any security to be granted over any of its assets over the course of the loan period.

 

The facility had a five-year term from the date of drawdown for each tranche. The facility had an interest rate of 3% to be paid on an annual basis, the first instalment of short-term interest on the €10,000,000 tranche 1 was paid in April 2018. A further annual fixed rate of 10% was payable together with the outstanding principal amount on expiry of the facility. At December 31, 2018, the Group had short term interest payable accrued amounting US$319,000 which was repayable in April 2019 and long-term interest payable of US$1,847,000 which represents the present value of the long-term interest accrued but not payable until each tranche matured.

 

On September 24, 2019, the EIB loan was repaid in full.

 

As part of the acquisition of Aegerion on September 24, 2019, Aegerion entered into a new U.S. dollar denominated US$81,021,000 secured term loan debt facility (''Term Loan'') with various lenders. The Term Loan is made up of a US$54,469,000 loan that was in place prior to the acquisition which was refinanced as part of the acquisition and a US$26,552,000 additional loan that was drawn down on September 24, 2019 and was used to repay the EIB secured loan facility. The Term Loan has a five-year term from the date of the draw down, September 24, 2019 and matures on September 24, 2024. Under the Term Loan, interest will be payable at the option of the Group at the rate of 11% per annum paid in cash on a quarterly basis or at a rate of 6.5% paid in cash plus 6.5% paid in kind that will be paid when the principal is repaid, which rolls up and is included in the principal balance outstanding, on a quarterly basis. The Term Loan may be prepaid, in whole or in part, by Aegerion at any time subject to payment of an exit fee, which depending on the stage of the loan term, ranges from 5.00% to 0.00% of the principal then outstanding on the Term Loan.

 

In connection with the Term Loan, the Group incurred approximately US$870,000 of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees. These costs are being amortized over the expected life of the loan using the effective interest method.

 

The Term Loan is guaranteed by Amryt and certain subsidiaries of the Group. In connection with the loan agreement, fixed and floating charges have been placed on property and undertakings of Amryt and certain subsidiaries of the Group.

 

The Term Loan agreement includes affirmative and negative covenants, including prohibitions on the incurrence of additional indebtedness, granting of liens, certain asset dispositions, investments and restricted payments, in each case, subject to certain exceptions set forth in the Loan Agreement. The Term Loan agreement also includes customary events of default for a transaction of this type, and includes (i) a cross-default to the occurrence of any event of default under material indebtedness of Aegerion and certain subsidiaries of the Group and Amryt, including the convertible notes, and (ii) Amryt or any of its subsidiaries being subject to bankruptcy or other insolvency proceedings. Upon the occurrence of an event of default, the lenders may declare all of the outstanding Term Loan and other obligations under the Term Loan agreement to be immediately due and payable and exercise all rights and remedies available to the lenders under the Term Loan agreement and related documentation. There have been no events of default or breaches of the covenants occurring for the year ended December 31, 2019.

 

 

Total

Changes in long term loans from financing activities:

US$'000

At January 1, 2019

$             19,011

 

Cash-flows

 

 

Proceeds from loans and borrowings

31,176

 

Repayment of loans and borrowings

(21,990)

 

Liability related

 

 

Effect of changes in foreign exchange rates

797

 

Acquired loans and borrowings

54,469

 

Interest accrual

(1,853)

 

At December 31, 2019

$            81,610

 

 

 

20. Convertible notes

 

 

December 31, 2019

 

US$'000

Issuance of convertible notes............................................................................................................................

$           125,000

 

Amount classified as equity..............................................................................................................................

(29,210

)

Accreted interest..................................................................................................................................................

1,066

 

Total convertible notes

$             96,856

 

 

As part of the acquisition, Aegerion issued convertible notes with an aggregate principal amount of US$125,000,000 to Aegerion creditors. Refer to Note 23, Related party transactions, for further details.

 

The convertible notes are senior unsecured obligations and bear interest at a rate of 5.0% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2020. The convertible notes will mature on April 1, 2025, unless earlier repurchased or converted.

 

The convertible notes are convertible into Amryt's ordinary shares at a conversion rate of 386.75 ordinary shares per US$1,000 principal amount of the convertible notes. If the holders elect to convert the convertible notes, Aegerion can settle the conversion of the convertible notes through payment or delivery of cash, common shares, or a combination of cash and common shares, at its discretion. As a result of the conversion feature in the convertible notes, the convertible notes were assessed to have both a debt and an equity component. The two components were assessed separately and classified as a financial liability and equity instrument. The financial liability component was measured at fair value based on the discounted cash flows expected over the expected term of the notes using a discount rate based on a market interest rate that a similar debt instrument without a conversion feature would be subject to. Refer to Note 17, Share capital and reserves, for further details on the equity component of the convertible notes.

 

From September 24, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their convertible notes, in multiples of US$1,000 principal amount, at the option of the holder.

 

The indenture does not contain any financial covenants or restrict the Group's ability to repurchase securities, pay dividends or make restricted payments in the event of a transaction that substantially increases the Group's level of indebtedness.

 

The indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving Aegerion, Amryt and certain subsidiaries of the Group) occurs and is continuing, the trustee by notice to Aegerion, or the holders of at least 25% in principal amount of the outstanding convertible notes by written notice to Aegerion and the trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all of the convertible notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving Aegerion, 100% of the principal and accrued and unpaid interest, if any, on the convertible notes will become due and payable automatically. Notwithstanding the foregoing, the indenture provides that, upon Aegerion's election, and for up to 180 days, the sole remedy for an event of default relating to certain failures by Aegerion to comply with certain reporting covenants in the indenture consists exclusively of the right to receive additional interest on the convertible notes. There have been no events of default or breaches of the covenants occurring for the year ended December 31, 2019.

 

 

21. Trade and other payables

 

December 31,

 

2019

 

2018

 

US$'000

 

Trade payables.......................................................................................................

$            23,418

 

 

$             5,339

 

Accrued expenses...................................................................................................

52,382

 

 

6,204

 

Social security costs and other taxes..................................................................

796

 

 

500

 

Trade and other payables...................................................................................

$            76,596

 

 

$           12,043

 

 

The accruals mainly consist of costs related to government revenue rebates, convertible note interest, royalty expenses, restructuring costs, clinical and R&D activities.

 

22. Provisions and other liabilities

 

December 31,

 

2019

 

2018

 

US$'000

 

Non-current liabilities

 

 

 

 

 

Provisions and other liabilities

$             3,910

 

 

$              -

 

Leases due greater than 1 year

1,053

 

 

-

 

 

4,963

 

 

-

 

Current liabilities

 

 

 

 

 

Provisions and other liabilities

23,047

 

 

-

 

Leases due less than 1 year..................................................................................

571

 

 

-

 

 

23,618

 

 

-

 

Total provisions and other liabilities...............................................................

$           28,581

 

 

$             -

 

 

Refer to Note 25, Commitments and contingencies for further details on provisions.

 

 

23. Related party transactions

 

Compensation of key management personnel of the Group

 

At December 31, 2019 the key management personnel of the Group were made up of two key personnel, the executive director, Joe Wiley and the Chief Financial Officer and Chief Operating Officer, Rory Nealon. Rory Nealon was an executive director of the Company in 2018 and resigned from this position on September 24, 2019.

 

Compensation for the year ended December 31, 2019 of these personnel is detailed below:

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Short-term employee benefits

$            1,049

 

 

$              803

 

Performance related bonus

1,286

 

 

420

 

Post-employment benefits

86

 

 

76

 

Share-based compensation benefits

510

 

 

175

 

Total compensation

$            2,931

 

 

$           1,474

 

 

Shares purchased by directors

 

The directors of the Company did not purchase any shares in the Company in 2018.

 

The Chairman, Ray Stafford, purchased 918,273 Amryt ordinary shares as part of the interim fundraise in August 2019. The executive director, Joe Wiley purchased 7,999 shares on the open market in January 2020.

 

Agreements with principal shareholders

 

Long term loan

 

On September 24, 2019, the Group entered into a long term loan. Proceeds from the long term loan were used to refinance Aegerion's existing secured bridge loan in the principal amount of approximately US$50,000,000 (in principal) held by certain funds managed by Athyrium Capital Management, LP and Highbridge Capital Management, LLC, respectively, and Amryt's existing €20,000,000 (in principal) secured loan facility with EIB. Further information on the terms of the long term loan is included in Note 19, Long term loan, of these financial statements.

 

Convertible notes

 

On September 24, 2019, the Company issued US$125,000,000 aggregate principal amount of convertible notes due 2025 to certain creditors of Aegerion. The convertible notes bear interest at a rate of 5% per annum, payable in cash semi-annually. The convertible notes will mature approximately five and a half years after issuance, unless earlier repurchased, redeemed or converted. Further information on the terms of the convertible notes is included in Note 20, Convertible notes, of these financial statements.

 

Zero Cost Warrants

 

The Company agreed, for certain Aegerion creditors who wished to restrict their percentage share interest in Amryt's issued share capital, to issue to the relevant Aegerion creditor, as an alternative to Amryt ordinary shares, an equivalent number of new zero cost warrants to subscribe for Amryt ordinary shares to be constituted on the terms of the zero cost warrant. The relevant Aegerion creditors are entitled at any time to exercise the zero cost warrants, at which point in time the Company would issue to that Aegerion creditor the relevant number of fully paid ordinary shares in return for the exercise of the zero cost warrants.

 

On September 24, 2019, certain of Aegerion's creditors elected to receive 8,065,000 zero cost warrants to subscribe for Amryt ordinary shares as consideration for the acquisition. Separately 5,911,722 warrants were issued to investors in connection with the US$60,000,000 equity raise.

 

On November 14, 2019, the Company repurchased a combined 4,864,656 ordinary shares from Highbridge Tactical Master Fund L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77 Global Multi Strategy Alpha Master Limited. In exchange for the ordinary shares, these institutions were issued an equivalent number of zero cost warrants. Each warrant entitles the holder to subscribe for one ordinary share at zero cost. These ordinary shares are now held as treasury shares. On December 19, 2019, Highbridge MSF International Ltd exercised 1,645,105 zero cost warrants in exchange for 1,645,105 ordinary shares.

 

 

24. Fair value measurement and financial risk management

 

Categories of financial instruments

 

 

December 31,

 

2019

 

2018

 

US$'000

 

Financial assets (all at amortized cost):

 

 

 

Cash and cash equivalents...................................................................................

$              67,229

 

 

$             11,226

 

Trade receivables....................................................................................................

28,607

 

 

3,572

 

Total financial assets..............................................................................................

95,836

 

 

14,798

 

 

 

 

 

Financial liabilities:

 

 

 

At amortized cost

 

 

 

Trade payables and accrued expenses...............................................................

75,800

 

 

11,543

 

Lease liabilities

1,624

 

 

-

 

Other liabilities

19,457

 

 

-

 

Convertible notes....................................................................................................

96,856

 

 

-

 

Long term loan........................................................................................................

81,610

 

 

19,011

 

At fair value

 

 

 

Contingent consideration......................................................................................

102,461

 

 

47,316

 

Total financial liabilities.........................................................................................

377,808

 

 

77,870

 

Net

$           (281,972

)

 

$            (63,072

)

 

Financial instruments evaluated at fair value can be classified according to the following valuation hierarchy, which reflects the extent to which the fair value is observable:

 

·      Level 1: fair value evaluations using prices listed on active markets (not adjusted) of identical assets or liabilities.

 

·      Level 2: fair value evaluations using input data for the asset or liability that are either directly observable (as prices) or indirectly observable (derived from prices), but which do not constitute listed prices pursuant to Level 1.

 

·      Level 3: fair value evaluations using input data for the asset or liability that are not based on observable market data (unobservable input data).

 

The contingent consideration has been valued using Level 3. The contingent consideration comprises:

 

a.     Contingent consideration relating to the acquisition of Amryt GmbH (see Note 6, Business combinations and asset acquisitions) that was measured at US$53,048,000 as at December 31, 2019 (2018: US$47,316,000). The fair value comprises royalty payments which was determined using probability weighted revenue forecasts and the fair value of the milestones payments which was determined using probability adjusted present values. It also included a revision to the discount rate used, and revenue and costs forecasts have been amended to reflect management's current expectations.

 

Impact of key unobservable input data

·      An increase of 10% in estimated revenue forecasts would result in an increase to the fair value of US$3,710,000. A decrease would have the opposite effect.

 

·      A 5% increase in the discount factor used would result in a decrease to the fair value of US$9,761,000. A decrease of 5% would result in an increase to the fair value of US$13,312,000.

 

·      A six-month delay in the launch date for AP101 for EB would result in a decrease to the fair value of US$4,313,000.

 

b.     Contingent consideration relating to the acquisition of Aegerion that was measured at US$49,413,000 as at December 31, 2019. The fair value comprises approval milestones which was determined using probability weighted revenue forecasts and the fair value of the revenue milestones which was determined using probability adjusted present values.

 

Impact of key unobservable input data

 

·      An increase of 10% in estimated revenue forecasts would not result in any change to the fair value. A decrease would result in a decrease to the fair value of US$444,000.

 

·      A 5% increase in the discount factors used would result in a decrease to the fair value of US$3,440,000. A decrease of 5% would result in an increase to the fair value of US$3,894,000.

 

·      A six-month delay in the launch date for AP101 for EB would result in a decrease to the fair value of US$2,788,000.

 

Policies and Objectives

 

The Group's operations expose it to some financial risks arising from its use of financial instruments, the most significant ones being liquidity, market risk and credit risk. The Board of Directors is responsible for the Group and Company's risk management policies and whilst retaining responsibility for them it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. The main policies for managing these risks are as follows:

 

Liquidity risk

 

The Group is not subject to any externally imposed capital requirement. Accordingly, the Group's objectives are to safeguard the ability to continue as a going concern in order to provide returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Working capital forecasts are prepared to ensure the Group has sufficient funds to complete contracted work commitments.

 

The following table shows the maturity profile of trade payables of the Group:

 

 

Less than 1 month

 

Between 1 and 3 months

 

Between 3 and 6 months

 

Total

December 31, 2019

US$'000

 

 

 

Trade payables

$              17,995

 

$           3,272

 

$            2,151

 

$              23,418

 

 

 

 

 

 

 

 

 

Less than 1 month

 

Between 1 and 3 months

 

Between 3 and 6 months

 

Total

December 31, 2018

US$'000

 

 

 

Trade payables

$               4,344

 

$                -

 

$               995

 

$               5,339

 

The following table shows the maturity profile of lease liabilities and other liabilities of the Group:

 

Less than 1 year

 

Between 1 and 3 years

 

Between 3 and 5 years

 

Greater than 5 years

 

Total

December 31, 2019

US$'000

 

 

 

 

Lease liabilities

$              969

 

 

$                  916

 

 

$                  143

 

 

$                   20

 

 

$               2,048

 

Other liabilities

15,722

 

 

3,928

 

 

-

 

 

-

 

 

19,650

 

 

$         16,691

 

 

$               4,844

 

 

$                  143

 

 

$                   20

 

 

$             21,698

 

 

The following table shows the undiscounted maturity profile of long-term loans of the Group, including principal and interest:

 

Less than 1 year

 

Between 1 and 3 years

 

Between 3 and 5 years

 

Greater than 5 years

 

Total

December 31, 2019

US$'000

 

 

 

 

Long term loan

$          5,585

 

 

$             12,296

 

 

$           124,427

 

 

$                   -

 

 

$           142,308

 

Convertible notes

6,372

 

 

 

12,500

 

 

12,500

 

 

128,125

 

 

159,497

 

 

$        11,957

 

 

$             24,796

 

 

$           136,927

 

 

$          128,125

 

 

$           301,805

 

 

 

 

 

 

 

 

 

 

 

 

Less than 1 year

 

Between 1 and 3 years

 

Between 3 and 5 years

 

Greater than 5 years

 

Total

December 31, 2018

US$'000

 

 

 

 

Long term loan

$               -

 

 

$                    -

 

 

$             19,358

 

 

$                   -

 

 

$             19,358

 

                               

 

The following table shows the undiscounted maturity profile of the contingent consideration of the Group:

 

Less than 1 year

 

Between 1 and 3 years

 

Between 3 and 5 years

 

Greater than 5 years

 

Total

December 31, 2019

US$'000

 

 

 

 

Contingent consideration

$               -

 

 

$            99,559

 

 

$             27,998

 

 

$                   -

 

 

$           127,557

 

 

 

 

 

 

 

 

 

 

 

 

Less than 1 year

 

Between 1 and 3 years

 

Between 3 and 5 years

 

Greater than 5 years

 

Total

December 31, 2018

US$'000

 

 

 

 

Contingent consideration

$               -

 

 

$            14,875

 

 

$             28,607

 

 

$                   -

 

 

$              43,482

 

 

Capital management

 

The Group considers its capital to be its ordinary share capital, share premium, other reserves and accumulated deficit. The Group manages its capital to ensure that entities within the Group will be able to continue individually as going concerns, while maximizing the return to shareholders through the optimization of debt and equity balances. The Group manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. On a regular basis, management receives financial and operational performance reports that enable continuous management of assets, liabilities and liquidity. No changes were made in the objectives, policies or processes during the years ended December 31, 2019 and December 31, 2018.

 

Market risk

 

Market risk arises from the use of interest-bearing financial instruments and represents the risk that future cash flows of a financial instrument will fluctuate as a result of changes in interest rates. It is the Group's policy to ensure that significant contracts are entered into in its functional currency whenever possible and to maintain the majority of cash balances in the functional currency of the Company. The Group considers this policy minimizes any unnecessary foreign exchange exposure. In order to monitor the continuing effectiveness of this policy, the Board of Directors reviews the currency profile of cash balances and managements accounts.

 

It is the Group's policy to enter into long term borrowings at fixed rates of interest where possible to reduce the Group's exposure to cash flow interest rate risk. During the years ended December 31, 2019 and December 31, 2018, the long term borrowings of the Group were subject to fixed rates of interest.

 

During the year 2019, the Group earned interest on its interest-bearing financial assets at rates between 0% and 2%. The effect of a 1% change in interest rates obtainable during the year on cash and on short-term deposits would be to increase or decrease the Group loss before tax by US$71,000 (2018: US$64,000).

 

In addition to cash balances maintained in US$, the Group had balances in £ and € amongst others at year-end. A theoretical 10% adverse movement in the year end €:US$ exchange rate would lead to an increase in the Group loss before tax by US$573,000 with a corresponding reduction in the Group loss before tax with a 10% favorable movement. A theoretical 10% adverse movement in £:US$ exchange rates would lead to an increase in the Group loss before tax by US$438,000 with a corresponding reduction in the Group loss before tax with a 10% favorable movement.

 

Credit risk

 

The Group has no significant concentrations of credit risk. Exposure to credit risk is monitored on an ongoing basis. If necessary, the Group maintains specific provisions for potential credit losses. To date there has been no requirement for such provisions. The Group maintains cash and cash equivalents with various financial institutions. The Group performs regular and detailed evaluations of these financial institutions to assess their relative credit standing. The carrying amount reported in the balance sheet for cash and cash equivalents approximate their fair value. Credit risk is the risk that the counterparty will default on its contractual obligations resulting in financial loss. Credit risk arises from cash and cash equivalents and from exposure via deposits with the Group's bankers. For cash and cash equivalents, the Group only uses recognized banks with high credit ratings.

 

Credit risk related to customers is managed through risk assessment procedures, through assessment of credit quality, taking into account the financial position of the customer, past experience and other factors. The compliance with credit terms is monitored on a regular basis by management. Credit terms may vary from one month to several months depending on the region and customer. The major customers contribute to 58% of the total trade receivables of the group outstanding as at December 31, 2019 (2018: 92%).

               

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group assesses ECL based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

 

 

 

 

25. Commitments and contingencies

 

Contingent consideration

 

See Note 6, Business combinations and asset acquisitions, in relation to contingent consideration as a result of the acquisition of Amryt GmbH and Aegerion.

 

License Agreements

 

In connection with metreleptin, the Group has license agreements for the exclusive license and patents for the use of metreleptin to develop, manufacture and commercialize a preparation containing metreleptin. Under the license agreements the Group is required to make royalty payments on net sales on a country-by-country basis. During the year ended December 31, 2019, following the Aegerion acquisition on September 24, 2019, the Group made aggregate royalty payments of US$5,104,000 (2018: US$nil).

 

The Group holds a license agreement for the exclusive, worldwide license of certain know-how and a range of patent rights applicable to lomitapide. The Group is obligated to use commercially reasonable efforts to develop, commercialize, market and sell at least one product covered by the licensed patent right, such as lomitapide. Additionally, the Group is required to make royalty payments on net sales of products. During the year ended December 31, 2019, following the Aegerion acquisition on September 24, 2019, the Group recorded aggregate royalty expenses to third parties of US$803,000 (2018: US$nil).

 

Prior to the Aegerion acquisition, Amryt had the exclusive right to sell LOJUXTA across the licensed territories pursuant to a license agreement with Aegerion. During the year ended December 31, 2019, Amryt recorded aggregate royalty expenses to Aegerion of US$2,512,000 (2018: US$2,678,000).

 

The Group entered into a license agreement for the exclusive, worldwide license to the patent rights for a novel polymer-based topical gene therapy delivery platform for potential use in the treatment of rare genetic diseases. The first product candidate utilizing this platform, AP103, is currently in preclinical development for the treatment of recessive dystrophic EB, a subset of severe EB. Under the license agreement Amryt is required to pay milestone payments and, upon the sale of product, royalty payments on net sales of products.

 

The Group entered into a license agreement for the non-exclusive, worldwide license to the patent rights for the design and development of gene coded therapy vectors and methods for making such vectors, in order for Amryt to develop and commercialize its genetic encoded therapies relating to AP103. Under this agreement Amryt is required to make milestone payments and royalty payments on net sales of products.

 

Legal matters

 

Prior to the acquisition of Aegerion by Amryt, Aegerion entered into settlement agreements with governmental entities including the Department of Justice (''DOJ'') and the FDA in connection with JUXTAPID investigations. The settlement agreements require Aegerion to pay specified fines and engage in regulatory compliance efforts. Subsequent to the acquisition, Aegerion made US$3,387,000 of settlement payments, including interest, and the total amount of the settlements that remains due as a current liability and a non-current liability is $15,547,000 and $3,910,000, respectively, as of December 31, 2019.

 

Other legal matters

 

The Group recognizes a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Group reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Group's views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Group's liability accrual would be recorded in the period in which such determination is made. At December 31, 2019 the Group had recognized liabilities of US$7,500,000 in relation to ongoing legal matters.

 

Lease commitments

 

The Group had no finance lease commitments in 2019 (2018: nil). In February 2020, the Group entered an 8-year term lease for its U.S. operational office, located in Boston, Massachusetts. The lease will commence in April 2020, and the aggregate lease payment amounts over the lease term is approximately US$2,400,000.

 

 

26. Investment in subsidiaries

 

List of subsidiary companies:

 

Subsidiary

Activities

Incorporation

2019 %
Holding

2018 %
Holding

Amryt Pharma Holdings Ltd.

Direct

Holding company and management services

5316808

UK

100

100

Amryt Pharmaceuticals DAC

Indirect

Holding company and management services

566448

Ireland

100

100

Amryt Research Limited

Indirect

Pharmaceuticals R&D

571411

Ireland

100

100

Amryt Endocrinology Limited

Indirect

Pharmaceuticals R&D

572984

Ireland

100

100

Amryt Lipidology Limited

Indirect

Licensee for Lojuxta

593833

Ireland

100

100

Amryt Genetics Limited

Indirect

Pharmaceutical R&D

622577

Ireland

100

100

Amryt Pharma (UK) Limited

Indirect

Management services

10463152

UK

100

100

Amryt Pharma France

Indirect

Dormant

824 418 156 00017

France

100

100

Amryt Pharma Italy SRL

Indirect

Management services

2109476

Italy

100

100

Amryt Pharma Spain SL

Indirect

Management services

B67130567

Spain

100

100

Amryt GmbH (previously Amryt AG)

Indirect

Product Sales and Pharmaceuticals R&D

HRB 711487

Germany

100

100

SomPharmaceuticals SA

Indirect

Pharmaceuticals R&D and management services

CHE-435.396.568

Switzerland

100

100

SomTherapeutics, Corp

Indirect

License holder

P14000071235

USA

100

100

Aegerion Pharmaceuticals, Inc.

Indirect

Holding company and management services

3922075

USA

100

Not applicable

Aegerion International Ltd.

Indirect

Management services

52048

Bermuda

100

Not applicable

Aegerion Securities Corporation

Indirect

Management services

464215084

USA

100

Not applicable

Aegerion Pharmaceuticals Holdings, Inc.

Indirect

Management services

5213687

USA

100

Not applicable

Aegerion Argentina S.R.L.

Indirect

Management services

901-709682-0

Argentina

100

Not applicable

Aegerion Pharmaceuticals (Canada) Ltd.

Indirect

Management services

85134 5132 RT0001

Canada

100

Not applicable

Aegerion Colombia S.A.S.

Indirect

Management services

R048196625

Colombia

100

Not applicable

Aegerion Pharmaceuticals K.K.

Indirect

Management services

0104-01-107816

Japan

100

Not applicable

Aegerion Brasil Comercio E Importacao De Medicamentos LTDA

Indirect

Management services

3522602510-1

Brazil

100

Not applicable

Aegerion Pharmaceuticals Ltd.

Indirect

Management services

46134

Bermuda

100

Not applicable

Aegerion Pharmaceuticals Limited

Indirect

Management services

8114919

UK

100

Not applicable

Aegerion Pharmaceuticals, SAS

Indirect

Management services

534 195 59900012

France

100

Not applicable

Aegerion Pharmaceuticals S.r.l.

Indirect

Management services

1166250

Italy

100

Not applicable

Aegerion Pharmaceuticals GmbH

Indirect

Management services

HRB 95895

Germany

100

Not applicable

Aegerion İlaç Ticaret Limited Şirketi

Indirect

Management services

907292

Turkey

100

Not applicable

Aegerion Pharmaceuticals SARL

Indirect

Management services

CHE-497.494.599

Switzerland

100

Not applicable

Aegerion Pharmaceuticals B.V.

Indirect

Management services

69859647

Netherlands

100

Not applicable

Aegerion Pharmaceuticals Spain, S.L.

Indirect

Management services

B88019161

Spain

100

Not applicable

 

 

 

 

List of registered offices:

Company

Registered Office Address

Amryt Pharma Holdings Ltd

Dept 920a 196 High Road, Wood Green, London, United Kingdom, N22 8HH
 

Amryt Pharmaceuticals DAC

90 Harcourt Street, Dublin 2

Amryt Research Limited

90 Harcourt Street, Dublin 2

Amryt Endocrinology Limited

90 Harcourt Street, Dublin 2

Amryt Lipidology Limited

90 Harcourt Street, Dublin 2

Amryt Genetics Limited

90 Harcourt Street, Dublin 2

Amryt Pharma (UK) Limited

3rd Floor 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT

Amryt Pharma France

17 Avenue George V, 75008 Paris

Amryt Pharma Italy SRL

Milano (MI)-Via Dell'Annunciata 23/4

Amryt Spain SL

Barcelona, calle Diputacio, number 260

Amryt GmbH (previously Amryt AG)

Streiflingsweg 11, 75223 Niefern-Öschelbronn

SomPharmaceuticals SA

Bahnofstrasse 21, 6300 Zug

SomTherapeutics, Corp

3795 Coventry Lane, Boca Raton, FL 33496

Aegerion Pharmaceuticals Inc.

245 First Street, Riverview II, 18th Floor, Cambridge, MA 02142

Aegerion International Ltd.

Clarendon House, 2 Church Street, Hamilton, HM11

Aegerion Securities Corporation

245 First Street, Riverview II, 18th Floor, Cambridge, MA 02142

Aegerion Pharmaceuticals Holdings, Inc.

245 First Street, Riverview II, 18th Floor, Cambridge, MA 02142

Aegerion Argentina S.R.L.

Avda. Camacua 421, Suite 102, Olivos, Vicente Lopez, 1636

Aegerion Pharmaceuticals Canada (Ltd).

5300 Commerce Court West, 199 Bay Street, Toronto, ON M5L 1B9

Aegerion Colombia S.A.S.

CR 12 89 33 P 5, Bogota DC, Bogota 110111

Aegerion Pharmaceuticals K.K.

12F, Ark Mori Building, 1-12-32 Akasaka, Minato-ku, Tokyo

Aegerion Brazil Comercio E Importacao De Medicamentos. LTDA

Rua Joseefina, 200-Guarulhos City, Sao Paulo

Aegerion Pharmaceuticals Ltd.

Clarendon House, 2 Church Street, Hamilton, HM11

Aegerion Pharmaceuticals Limited

Royal Albert House, Sheet Street, Windsor, UK SL4 1BE

Aegerion Pharmaceuticals, SAS

235, Avenue Le Jour se Leve, Boulogne-Billancourt, 92 100

Aegerion Pharmaceuticals, S.r.l.

Viale Abruzzi n. 94, Milano, 20131

Aegerion Pharmaceuticals GmbH

Maximilianstrasse 35A, Munich, Germany, 80539

Aegerion ILac Ticaret Limited Sirketi

Orjin Maslak, Eski Buyukdere Caddesi No: 27 K:11, Maslak, Istanbul, 34485

Aegerion Pharmaceuticals SARL

Rue de Rive 5, Nyon, Switzerland 1260

Aegerion Pharmaceuticals B.V.

Atrium Building, 8th Floor, Strawinskylaan 3127, 8e verdieping, Amsterdam

Aegerion Pharmaceuticals Spain, S.L.

Calle Josep Coroleu, 83 2-2, Vilanova I la Geltru, Barcelona 08800

 

 

 

 

27. Events after the reporting period

On February 18, 2020, Amryt confidentially submitted a draft registration statement on Form F-1 to the U.S. Securities and Exchange Commission (''SEC'') relating to the proposed offering of American Depositary Shares (''ADSs''), each representing five Amryt ordinary shares, and the proposed listing of the ADSs on the Nasdaq Global Select Market (''Nasdaq'').

 

 

Since a novel strain of coronavirus (SARS-CoV-2) causing a disease referred to as COVID-19 was first reported in December 2019, the disease has spread across the world, including countries in which we have patients and in which we have planned or active clinical trial sites.  The outbreak and government measures taken in response have had a significant impact, both direct and indirect, on all businesses and commerce as supply chains have been disrupted, facilities and production have been suspended and demand for certain goods and services has spiked while demand for other goods and services has fallen.  As COVID-19 continues to spread around the globe, Amryt may experience disruptions that could affect its business, preclinical studies and clinical trials.

 

In response to the spread of COVID-19, Amryt has closed its executive offices with its administrative employees continuing their work outside of our offices and limited the number of staff in Amryt's manufacturing facility in Germany.  Amryt provides therapeutic products to HoFH and lipodystrophy patients globally on a recurring basis. Once lomitapide (for the treatment of HoFH) or metreleptin (for the treatment of lipodystrophy) is prescribed by physicians, patients are typically on treatment over a long period of time with repeat prescriptions for each patient.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
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on 11/07/2016