NEOS Neos Therapeutics Inc.
Drug Pipeline
| Drug | Stage | Notes |
|---|---|---|
|
NT0502
Sialorrhea
|
Phase 1
Phase 1
|
Phase 1 ascending dose trial initiation planned in 2H 2020.
|
|
Cotempla XR-ODT
Attention deficit hyperactivity disorder (ADHD)
|
Approved
Approved
|
Approval announced June 19, 2017.
|
|
Adzenys XR-ODT
Attention deficit hyperactivity disorder (ADHD)
|
Approved
Approved
|
Approved January 27, 2016.
|
|
NT-0201
Attention deficit hyperactivity disorder (ADHD)
|
Approved
Approved
|
Approval announced September 15, 2017.
|
Latest News
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Patrick Heron to leave the Board
DUBLIN, Ireland and CHICAGO, March 16, 2021 (GLOBE NEWSWIRE) -- Iterum Therapeutics plc (NASDAQ:ITRM) (the "Company" or "Iterum"), a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections caused by multi-drug resistant pathogens in both community and hospital settings, today announced the appointment of Beth P. Hecht to the Company's Board of Directors replacing Patrick Heron, who announced he would be leaving the Board, effective as of March 12, 2021. Ms. Hecht will also serve as a member of the Audit Committee and Compensation Committee of the Board.
"I want to thank Patrick for his leadership and steadfast support of Iterum since our founding in 2015. As the representative of one of Iterum's founding venture capital firms, Patrick's insights and experiences were invaluable in helping us build the solid foundation we now have," said Corey Fishman, Iterum's Chief Executive Officer.
Mr. Fishman continued, "I am very pleased to welcome Beth to the board at this important time for Iterum. Beth brings a wealth of extensive experiences from across the industry, and an in-depth understanding of commercial operations, regulatory, legal and compliance matters, as well as transactional experience that complements the expertise of our current board colleagues," said Corey Fishman, Chief Executive Officer of Iterum Therapeutics plc. "As Iterum transitions from a development company to a commercial organization, we are looking forward to leveraging Beth's diverse pharmaceutical experiences and collaborating with us to shape our strategic plans and advance our vision."
"It's an exciting time to join the Board of Iterum, and I'm looking forward to partnering with Iterum's leadership as they work toward a bringing the first branded oral antibiotic for the treatment of uncomplicated urinary tract infections to the market in over 20 years, addressing a very important women's health issue," said Beth Hecht.
Ms. Hecht currently serves as Senior Vice President, General Counsel and Corporate Secretary of Xeris Pharmaceuticals, Inc. (NASDAQ:XERS). She has over 25 years of experience as a corporate executive in the life science industry, most recently serving as Managing Director and Chief Legal and Administrative Officer for Auven Therapeutics, a global biotechnology and pharmaceutical private equity firm. Ms. Hecht is also a member of the Board of Directors of Neos Therapeutics (NASDAQ:NEOS) where she chairs the Nominating and Governance Committee. Ms. Hecht is a graduate of Amherst College and Harvard Law School and started her career as an attorney specializing in intellectual property and corporate transactions at Willkie Farr & Gallagher (NY) and then Kirkland & Ellis (NY). She has established and led legal, compliance, licensing, human resources, and security departments at companies including Durata Therapeutics, Sun Products, MedPointe Inc. (formerly known as Carter-Wallace Inc.), Warner Chilcott PLC, ChiRex Ltd., and Alpharma Inc.
About Iterum Therapeutics plc
Iterum Therapeutics plc is a clinical-stage pharmaceutical company dedicated to developing differentiated anti-infectives aimed at combatting the global crisis of multi-drug resistant pathogens to significantly improve the lives of people affected by serious and life-threatening diseases around the world. Iterum Therapeutics is advancing its first compound, sulopenem, a novel penem anti-infective compound, in Phase 3 clinical development with oral and IV formulations. Sulopenem has demonstrated potent in vitro activity against a wide variety of gram-negative, gram-positive and anaerobic bacteria resistant to other antibiotics. Iterum Therapeutics has received Qualified Infectious Disease Product (QIDP) and Fast Track designations for its oral and IV formulations of sulopenem in seven indications. For more information, please visit http://www.iterumtx.com.
Forward Looking Statements
This press release contains forward-looking statements. These forward-looking statements include, without limitation, statements regarding the Company's plans, strategies and prospects for its business, including with respect to the timing of review by the U.S. Food and Drug Administration of the new drug application for oral sulopenem and the Company's expectations for potential approval on the Prescription Drug User Fee Act (PDUFA) date, the market potential for sulopenem, commercialization activities, and the sufficiency of the Company's cash resources to execute its strategy. In some cases, forward-looking statements can be identified by words such as "may," "believes," "intends," "seeks," "anticipates," "plans," "estimates," "expects," "should," "assumes," "continues," "could," "would," "will," "future," "potential" or the negative of these or similar terms and phrases. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include all matters that are not historical facts. Actual future results may be materially different from what is expected due to factors largely outside the Company's control, including the uncertainties inherent in the initiation and conduct of clinical trials, availability and timing of data from clinical trials, changes in regulatory requirements or decisions of regulatory authorities, the timing or likelihood of regulatory filings and approvals, changes in public policy or legislation, commercialization plans and timelines, if oral sulopenem is approved, the actions of third-party clinical research organizations, suppliers and manufacturers, the accuracy of the Company's expectations regarding how far into the future the Company's cash on hand will fund the Company's ongoing operations, the impact of COVID-19 and related responsive measures thereto, risks and uncertainties concerning the outcome, impact, effects and results of the Company's evaluation of corporate, strategic, financial and financing alternatives, including the terms, timing, structure, value, benefits and costs of any corporate, strategic, financial or financing alternative and the Company's ability to complete one at all and other factors discussed under the caption "Risk Factors" in its Annual Report on Form 10- K filed with the Securities and Exchange Commission (the "SEC") on March 12, 2021, and other documents filed with the SEC from time to time. Forward-looking statements represent the Company's beliefs and assumptions only as of the date of this press release. Except as required by law, the Company assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.
Investor Contact:
Judy Matthews
Chief Financial Officer
312-778-6073
[email protected]
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– The Neos Therapeutics Board of Directors recommend stockholders vote "FOR" the transaction in advance of the virtual special meeting scheduled for March 18, 2021 at 10:00 a.m. Eastern Time –
– Stockholders are encouraged to vote, no matter how many or how few shares they own –
– Vote TODAY by telephone, online at www.proxyvote.com, or by mailing proxy card –
– MacKenzie Partners, the Company's proxy solicitor, is available to answer any questions and help stockholders vote their shares –
DALLAS and FORT WORTH, Texas, March 12, 2021 (GLOBE NEWSWIRE) -- Neos Therapeutics, Inc. (NASDAQ:NEOS), a commercial-stage pharmaceutical company developing and manufacturing central nervous system-focused products, today announced that leading independent proxy advisory firm Glass, Lewis & Co., LLC ("Glass Lewis") has recommended Neos Therapeutics stockholders vote "FOR" the pending merger with Aytu BioScience, Inc ("Aytu"). On March 10, 2021, the Company announced that another leading independent proxy advisory firm, Institutional Shareholder Services Inc., had also recommended Neos Therapeutics stockholders vote "FOR" the pending merger with Aytu.
In recommending Neos stockholders vote "FOR" the merger, Glass Lewis indicated in its March 12, 2021 report:
"For Neos shareholders, the transaction would also provide an opportunity to participate in a combined company with a stronger financial profile and balance sheet than Neos on a stand-alone basis. Broadly speaking, we see no cause for significant concern with the strategic rationale for the proposed transaction and expect shareholders of both companies could benefit from the combination.
…
Overall, we believe the proposed transaction is strategically reasonable and financially acceptable from the perspective of shareholders of both companies. Based on these factors and the support of the board, we believe the proposed transaction is in the best interests of shareholders."
The Neos Board of Directors recommend that stockholders vote "FOR" the proposal to approve the pending merger with Aytu in advance of the Special Meeting, which will be held on March 18, 2021 at 10:00 a.m. Eastern Time. Due to the pandemic, the Special Meeting will be held exclusively online via a live audio webcast at www.virtualshareholdermeeting.com/NEOS2021SM. There is no physical location for the special meeting.
The approval of the merger requires the affirmative vote of holders of a majority of all of the outstanding shares of Neos common stock as of the record date, February 5, 2021. Stockholders are encouraged to vote their shares, no matter how many or how few they own.
Whether or not a stockholder intends to attend the virtual special meeting, the Neos Board asks that they vote TODAY by telephone, by Internet at www.proxyvote.com using 16-digit control number on the proxy card, or by completing, signing, dating and returning the proxy card enclosed in the proxy.
Any stockholder with questions about the special meeting or in need of assistance in voting their shares should contact the Company's proxy solicitor:
MacKenzie Partners
1407 Broadway, 27th Floor
New York, New York 10018
Email: [email protected]
Call Collect: (212) 929-5500
Toll-Free: (800) 322-2885About Neos Therapeutics
Neos Therapeutics, Inc. is a commercial-stage pharmaceutical company developing and manufacturing central nervous system (CNS)-focused products. Neos markets Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), Cotempla XR-ODT® (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), and Adzenys-ER® (amphetamine) extended-release oral suspension (see Full Prescribing Information, including Boxed WARNING), all for the treatment of ADHD. Neos also has a development candidate, NT0502, for the treatment of sialorrhea in patients with neurological conditions. Additional information about Neos is available at www.neostx.com.
Additional Information about the Proposed Merger Transaction and Where to Find It
This communication discusses the proposed merger transaction pursuant to the terms of the Agreement and Plan of Merger, dated as of December 10, 2020, by and among Neos Therapeutics, Inc. ("Neos"), Aytu BioScience, Inc. ("Aytu"), and Neutron Acquisition Sub, Inc. (the "Merger Agreement"). In connection with the proposed merger transaction, Aytu filed with the United States Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "registration statement") that included a joint proxy statement of Aytu and Neos that also constituted a prospectus of Aytu (the "joint proxy statement/prospectus"). The registration statement was declared effective on February 9, 2021 and the joint proxy statement/prospectus was first mailed to stockholders of Neos and Aytu on or about February 12, 2021. Aytu and Neos also plan to file other relevant documents with the SEC regarding the proposed merger transaction.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION.
You may obtain a free copy of the registration statement and the joint proxy statement/prospectus and other relevant documents (if and when they become available) filed by Aytu or Neos with the SEC at the SEC's website at www.sec.gov. Copies of the documents filed by Aytu with the SEC will be available free of charge on Aytu's website at www.aytubio.com or by contacting Aytu's Investor Relations at [email protected]. Copies of the documents filed by Neos with the SEC will be available free of charge on Neos' website at www.investors.neostx.com or by contacting Neos' Investor Relations at (972) 408-1300.
Certain Information Regarding Participants
Neos and Aytu and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger transaction. You can find information about Neos' executive officers and directors in Neos' definitive proxy statement filed with the SEC on April 21, 2020 in connection with Neos' 2020 annual meeting of stockholders. You can find information about Aytu's executive officers and directors in Aytu's definitive proxy statement filed with the SEC on March 4, 2020 in connection with Aytu's 2020 annual meeting of stockholders. Additional information regarding the interests of such potential participants is included in the joint proxy statement/prospectus and will be included in other relevant documents filed with the SEC if and when they become available. You may obtain free copies of these documents from Neos or Aytu using the sources indicated above.
No Offer or Solicitation
This communication does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor a solicitation of any vote or approval with respect to the proposed merger transaction or otherwise. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the "Securities Act") and otherwise in accordance with applicable law.
Cautionary Statement Regarding Forward-Looking Statements
This communication and other related materials contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, but not limited to, statements concerning: the expected timetable for completing the proposed merger transaction, the results, effects, benefits and synergies of the proposed merger transaction, future, opportunities for the combined company, future financial performance and condition, the executive and board structure of Aytu; the ability of Neos to successfully commercialize Adzenys XR-ODT®, Cotempla XR-ODT®, Adzenys ER® (the "Approved ADHD Products") and its generic Tussionex®; its ability to successfully advance its pipeline of product candidates, including licensed product candidates; its ability to maintain and protect its intellectual property; the outcome or success of its clinical trials; the rate and degree of market acceptance of its products; and its ability to develop sales and marketing capabilities. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "aim," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements of this communication are only predictions and are subject to a number of risks, uncertainties and assumptions, including, without limitation, (i) the outcome of any legal proceedings that may be instituted against the companies related to the proposed merger transaction; (ii) unanticipated difficulties or expenditures relating to the proposed merger transaction, the response of business partners and competitors to the announcement of the proposed merger transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed merger transaction; (iii) risks associated with the companies' ability to obtain the stockholder approvals required to consummate the proposed merger transaction and the timing of the closing of the proposed merger transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed merger transaction will not occur; (iv) the impact of COVID-19 on prescriptions for the Neos' products and on its business, revenues, results of operations and financial condition; (v) Neos' commercialization strategy for the Approved ADHD Products and other products that may be approved; (vi) the timing of any such approval; (vii) Neos' ability to market and sell the Approved ADHD Products and any other products that may be approved; (viii) Neos' ability to successfully compete in the market for medications indicated for ADHD; (ix) the manufacture of the Approved ADHD Products or Neos' other product candidates; (x) the therapeutic potential of the Approved ADHD Products or Neos' other product candidates; (xi) our ability to initiate and complete trials for NT0502; and (xii) other risks set forth under the caption "Risk Factors" in Neos' most recent Annual Report on Form 10-K, as updated by Neos' most recent Quarterly Report on Form 10-Q, and its other SEC filings. Moreover, Neos operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Neos management to predict all risks, nor can Neos assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements it may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this communication may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although Neos believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither Neos nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Forward-looking statements in this communication represent Neos' views only as of the date of this communication. Neos undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
CONTACTS:
Richard I. Eisenstadt
Chief Financial Officer
Neos Therapeutics
(972) 408-1389
[email protected]Sarah McCabe
Investor Relations
Stern Investor Relations, Inc.
(212) 362-1200
[email protected]
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– The Neos Therapeutics Board of Directors recommend stockholders vote "FOR" the transaction in advance of the virtual special meeting scheduled for March 18, 2021 at 10:00 a.m. Eastern Time –
– Stockholders are encouraged to vote, no matter how many or how few shares they own –
– Vote TODAY by telephone, online at www.proxyvote.com, or by mailing proxy card –
– MacKenzie Partners, the Company's proxy solicitor, is available to answer any questions and help stockholders vote their shares –
DALLAS and FORT WORTH, Texas, March 10, 2021 (GLOBE NEWSWIRE) -- Neos Therapeutics, Inc. (NASDAQ:NEOS), a commercial-stage pharmaceutical company developing and manufacturing central nervous system-focused products, today announced that leading independent proxy advisory firm Institutional Shareholder Services Inc. ("ISS") has recommended Neos Therapeutics stockholders vote "FOR" the pending merger with Aytu BioScience, Inc.
In recommending Neos stockholders vote "FOR" the merger, ISS concluded in its March 8, 2021 report:
"The [Neos] board conducted a thorough sales process, the strategic rationale for the merger is sound, and market reaction to the merger has been strong. Given the liquidity constraints and significant doubt raised to the company's ability to continue as a going concern, there appears to be significant risks involved in remaining a standalone entity. Support for the merger is therefore warranted."
The Neos Board of Directors recommend that stockholders vote "FOR" the proposal to approve the pending merger with Aytu BioScience in advance of the Special Meeting, which will be held on March 18, 2021 at 10:00 a.m. Eastern Time. Due to the pandemic, the Special Meeting will be held exclusively online via a live audio webcast at www.virtualshareholdermeeting.com/NEOS2021SM. There is no physical location for the special meeting.
The approval of the merger requires the affirmative vote of holders of a majority of all of the outstanding shares of Neos common stock as of the record date, February 5, 2021. Stockholders are encouraged to vote their shares, no matter how many or how few they own.
Whether or not a stockholder intends to attend the virtual special meeting, the Neos Board asks that they vote TODAY by telephone, by Internet at www.proxyvote.com using 16-digit control number on the proxy card, or by completing, signing, dating and returning the proxy card enclosed in the proxy.
Any stockholder with questions about the special meeting or in need of assistance in voting their shares should contact the Company's proxy solicitor:
MacKenzie Partners
1407 Broadway, 27th Floor
New York, New York 10018
Email: [email protected]
Call Collect: (212) 929-5500
Toll-Free: (800) 322-2885About Neos Therapeutics
Neos Therapeutics, Inc. is a commercial-stage pharmaceutical company developing and manufacturing central nervous system (CNS)-focused products. Neos markets Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), Cotempla XR-ODT® (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), and Adzenys-ER® (amphetamine) extended-release oral suspension (see Full Prescribing Information, including Boxed WARNING), all for the treatment of ADHD. Neos also has a development candidate, NT0502, for the treatment of sialorrhea in patients with neurological conditions. Additional information about Neos is available at www.neostx.com.
Additional Information about the Proposed Merger Transaction and Where to Find It
This communication discusses the proposed merger transaction pursuant to the terms of the Agreement and Plan of Merger, dated as of December 10, 2020, by and among Neos Therapeutics, Inc. ("Neos"), Aytu BioScience, Inc. ("Aytu"), and Neutron Acquisition Sub, Inc. (the "Merger Agreement"). In connection with the proposed merger transaction, Aytu filed with the United States Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "registration statement") that included a joint proxy statement of Aytu and Neos that also constituted a prospectus of Aytu (the "joint proxy statement/prospectus"). The registration statement was declared effective on February 9, 2021 and the joint proxy statement/prospectus was first mailed to stockholders of Neos and Aytu on or about February 12, 2021. Aytu and Neos also plan to file other relevant documents with the SEC regarding the proposed merger transaction.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION.
You may obtain a free copy of the registration statement and the joint proxy statement/prospectus and other relevant documents (if and when they become available) filed by Aytu or Neos with the SEC at the SEC's website at www.sec.gov. Copies of the documents filed by Aytu with the SEC will be available free of charge on Aytu's website at www.aytubio.com or by contacting Aytu's Investor Relations at [email protected]. Copies of the documents filed by Neos with the SEC will be available free of charge on Neos' website at www. investors.neostx.com or by contacting Neos' Investor Relations at (972) 408-1300.
Certain Information Regarding Participants
Neos and Aytu and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger transaction. You can find information about Neos' executive officers and directors in Neos' definitive proxy statement filed with the SEC on April 21, 2020 in connection with Neos' 2020 annual meeting of stockholders. You can find information about Aytu's executive officers and directors in Aytu's definitive proxy statement filed with the SEC on March 4, 2020 in connection with Aytu's 2020 annual meeting of stockholders. Additional information regarding the interests of such potential participants is included in the joint proxy statement/prospectus and will be included in other relevant documents filed with the SEC if and when they become available. You may obtain free copies of these documents from Neos or Aytu using the sources indicated above.
No Offer or Solicitation
This communication does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor a solicitation of any vote or approval with respect to the proposed merger transaction or otherwise. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the "Securities Act") and otherwise in accordance with applicable law.
Cautionary Statement Regarding Forward-Looking Statements
This communication and other related materials contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws, including, but not limited to, statements concerning: the expected timetable for completing the proposed merger transaction, the results, effects, benefits and synergies of the proposed merger transaction, future, opportunities for the combined company, future financial performance and condition, the executive and board structure of Aytu; the ability of Neos to successfully commercialize Adzenys XR-ODT®, Cotempla XR-ODT®, Adzenys ER® (the "Approved ADHD Products") and its generic Tussionex®; its ability to successfully advance its pipeline of product candidates, including licensed product candidates; its ability to maintain and protect its intellectual property; the outcome or success of its clinical trials; the rate and degree of market acceptance of its products; and its ability to develop sales and marketing capabilities. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "aim," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements of this communication are only predictions and are subject to a number of risks, uncertainties and assumptions, including, without limitation, (i) the outcome of any legal proceedings that may be instituted against the companies related to the proposed merger transaction; (ii) unanticipated difficulties or expenditures relating to the proposed merger transaction, the response of business partners and competitors to the announcement of the proposed merger transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed merger transaction; (iii) risks associated with the companies' ability to obtain the stockholder approvals required to consummate the proposed merger transaction and the timing of the closing of the proposed merger transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed merger transaction will not occur; (iv) the impact of COVID-19 on prescriptions for the Neos' products and on its business, revenues, results of operations and financial condition; (v) Neos' commercialization strategy for the Approved ADHD Products and other products that may be approved; (vi) the timing of any such approval; (vii) Neos' ability to market and sell the Approved ADHD Products and any other products that may be approved; (viii) Neos' ability to successfully compete in the market for medications indicated for ADHD; (ix) the manufacture of the Approved ADHD Products or Neos' other product candidates; (x) the therapeutic potential of the Approved ADHD Products or Neos' other product candidates; (xi) our ability to initiate and complete trials for NT0502; and (xii) other risks set forth under the caption "Risk Factors" in Neos' most recent Annual Report on Form 10-K, as updated by Neos' most recent Quarterly Report on Form 10-Q, and its other SEC filings. Moreover, Neos operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Neos management to predict all risks, nor can Neos assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements it may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this communication may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although Neos believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither Neos nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Forward-looking statements in this communication represent Neos' views only as of the date of this communication. Neos undertakes no obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
CONTACTS:
Richard I. Eisenstadt
Chief Financial Officer
Neos Therapeutics
(972) 408-1389
[email protected]Sarah McCabe
Investor Relations
Stern Investor Relations, Inc.
(212) 362-1200
[email protected] -
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Q4 2020 Net Asset Value "NAV" per Share Increased 9.7% to $11.26 from Q3 2020
Q4 2020 Net Investment Income Provides 116% Coverage of Base Distribution Payout
Record FY 2020 Total Investment Income Increased 7.2% Year-over-Year
Record FY 2020 Net Investment Income Increased 9.7% Year-over-Year
Record Undistributed Earnings Spillover of $107.7 Million, or $0.94(1) per Ending Shares Outstanding
Record Available Liquidity of $673.3 Million
Q4 2020 Financial Achievements and Highlights
-
Net Investment Income "NII" of $42.2 million, or $0.37 per share, an increase of 5.1% year-over-year
- Provides 116% coverage of base distribution payout
- Total Investment Income of $75.3 million, an increase of 6.7% year-over-year
-
Q4 new debt and equity commitments of $150.8 million
- Q4 total gross fundings of $129.8 million
- Unscheduled early principal repayments or "early loan repayments" of $282.3 million
- $673.3 million of available liquidity, subject to existing terms and covenants
- 13.8% Return on Average Equity "ROAE" (NII/Average Equity)
- 6.6% Return on Average Assets "ROAA" (NII/Average Assets)
- GAAP leverage of 100.6% and regulatory leverage of 93.0%(2)
- Net Asset Value "NAV" increased to $11.26 from $10.26, up 9.7% from Q3 2020
- 13.3% GAAP Effective Yield and 11.8% Core Yield(3), a non-GAAP measure
Full-year ending December 31, 2020 Financial Achievements and Highlights
- Record Total Investment Income of $287.3 million, an increase of 7.2%, compared to $267.9 million for the 12 months ending December 31, 2019
- Record NII of $157.1 million, or $1.39 per share, an increase of 9.7%, compared to $143.3 million for the 12 months ending December 31, 2019
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New equity and debt commitments of $1.19 billion for the 12 months ending December 31, 2020
- Total fundings of $761.2 million for the twelve months ending December 31, 2020
- Record unscheduled early loan repayments of $709.0 million for the 12 months ending December 31, 2020
Footnotes:
(1) $0.95 per Weighted Average Shares Outstanding
(2) Regulatory leverage represents debt-to-equity ratio, excluding the Company's Small Business Administration "SBA" debenture
(3) Core Yield excludes early loan repayments and one-time fees, and includes income and fees from expired commitments
Hercules Capital, Inc. (NYSE:HTGC) ("Hercules" or the "Company"), the largest and leading specialty financing provider to innovative venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, today announced its financial results for the fourth quarter and full-year ended December 31, 2020.
"Despite the unique challenges of 2020, Hercules was able to reach several new financial and operating milestones," stated Scott Bluestein, chief executive officer and chief investment officer of Hercules. "Notably, we closed over $1.0 billion in new debt and equity commitments for the third consecutive year, delivered record total investment income and net investment income, each growing 7.2% and 9.7%, respectively, and maintained the strong credit quality of our debt investment portfolio. In addition, during Q4 our portfolio generated net investment income in excess of our base shareholder distribution and this allowed us to declare a $0.05 supplemental distribution to our shareholders."
Bluestein added, "Our Technology and Life Sciences segments continue to be well positioned throughout the COVID-19 pandemic. Access to liquidity for our portfolio companies continues to be strong as evidenced by record-breaking venture capital fundraising and investments in 2020."
Bluestein concluded, "As Hercules enters 2021, we do so from a position of strength with record liquidity, conservative leverage and strong originations momentum. We made significant investments throughout 2020 in our team, infrastructure and systems. We added talent to all levels of the organization and made a series of investments in our technology and systems that we believe will best position us for future growth."
Q4 2020 Review and Operating Results
Debt Investment Portfolio
Hercules delivered new debt and equity commitments totaling $150.8 million and gross fundings totaling $129.8 million.
During the fourth quarter, Hercules realized early loan repayments of $282.3 million, which along with normal scheduled amortization of $18.3 million, resulted in total debt repayments of $300.5 million.
The new debt investment origination and funding activities lead to a net debt investment portfolio decrease of ($184.2) million during the fourth quarter, on a cost basis.
The Company's total investment portfolio, (at cost and fair value) by category, quarter-over-quarter is highlighted below:
Total Investment Portfolio: Q4 2020 to Q3 2020
(in millions) Debt Equity & Inv.
FundsWarrants Total Portfolio Balances at Cost at 9/30/20 $
2,283.7
$
193.3
$
28.8
$
2,505.8
New fundings(a) 122.2
7.4
0.2
129.8
Warrants not related to Q4 2020 fundings —
—
0.1
0.1
Early payoffs(b) (282.3
)
—
—
(282.3
)
Principal payments received on investments (18.3
)
—
—
(18.3
)
Net changes attributed to conversions, liquidations, and fees (5.8
)
(10.5
)
(3.4
)
(19.7
)
Net activity during Q4 2020 (184.2
)
(3.1
)
(3.1
)
(190.4
)
Balances at Cost at 12/31/20 $
2,099.5
$
190.2
$
25.7
$
2,315.4
Balances at Value at 9/30/20 $
2,264.5
$
133.8
$
22.5
$
2,420.8
Net activity during Q4 2020 (184.2
)
(3.1
)
(3.1
)
(190.4
)
Net change in unrealized appreciation (depreciation) 14.2
94.3
15.2
123.7
Total net activity during Q4 2020 (170.0
)
91.2
12.1
(66.7
)
Balances at Value at 12/31/20 $
2,094.5
$
225.0
$
34.6
$
2,354.1
(a) New fundings amount includes $604K fundings associated with revolver loans during Q4 2020. (b) Early payoffs include $3.64 million of paydowns on revolvers during Q4 2020. Debt Investment Portfolio Balances by Quarter
(in millions) Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Ending Balance at Cost $2,099.5
$2,283.7
$2,278.9
$2,242.9
$2,170.1
Weighted Average Balance $2,246.0
$2,217.0
$2,248.0
$2,178.0
$2,164.0
Debt Investment Portfolio Composition by Quarter
(% of debt investment portfolio) Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
First Lien Senior Secured 84.2%
85.5%
83.5%
83.0%
84.0%
Floating Rate w/Floors 96.9%
97.9%
97.9%
97.8%
97.4%
Effective Portfolio Yield and Core Portfolio Yield ("Core Yield")
The effective yield on Hercules' debt investment portfolio was 13.3% during Q4 2020, as compared to 12.6% for Q3 2020. The Company realized $282.3 million of early loan repayments in Q4 2020 compared to $190.8 million in Q3 2020, or an increase of 48.0%. Effective yields generally include the effects of fees and income accelerations attributed to early loan repayments, and other one-time events. Effective yields are materially impacted by the elevated or reduced levels of early loan repayments and derived by dividing total investment income by the weighted average earning investment portfolio assets outstanding during the quarter, which excludes non-interest earning assets such as warrants and equity investments.
Core yield, a non-GAAP measure, was 11.8% during Q4 2020, within the Company's expected range of 11.0% to 12.0%, and increased compared to 11.3% in Q3 2020. Hercules defines core yield as yields that generally exclude any benefit from income related to early repayments attributed to the acceleration of unamortized income and prepayment fees and includes income from expired commitments.
Income Statement
Total investment income increased to $75.3 million for Q4 2020, compared to $70.6 million in Q4 2019, an increase of 6.7% year-over-year. The increase is primarily attributable to a higher weighted average debt investment balance and fee income from higher early loan repayments between periods.
Non-interest and fee expenses were $16.0 million in Q4 2020 versus $14.5 million for Q4 2019. The increase was due to higher general and administrative expenses, tax expenses and higher employee compensation expenses.
Interest expense and fees were $17.2 million in Q4 2020, compared to $16.0 million in Q4 2019. The increase was due to higher weighted-average borrowings between periods.
The Company had a weighted average cost of borrowings comprised of interest and fees, of 5.2% in Q4 2020, as compared to 5.0% for Q4 2019.
NII – Net Investment Income
NII for Q4 2020 was $42.2 million, or $0.37 per share, based on 113.9 million basic weighted average shares outstanding, compared to $40.1 million, or $0.38 per share, based on 105.6 million basic weighted average shares outstanding in Q4 2019. The increase is attributable to a higher average debt investment balance and fee income from higher early loan repayments offset by an increase in total operating expenses and lower core yields between periods.
Continued Credit Discipline and Strong Credit Performance
Hercules' net cumulative realized gain/(loss) position, since its first origination activities in October 2004 through December 31, 2020, (including net loan, warrant and equity activity) on investments, totaled ($79.7) million, on a GAAP basis, spanning over 16 years of investment activities.
When compared to total new debt investment commitments during the same period of over $11.1 billion, the total realized gain/(loss) since inception of ($79.7) million represents approximately 72 basis points "bps," or 0.72%, of cumulative debt commitments, or an effective annualized loss rate of 4.5 bps, or 0.04%.
Realized Gains/(Losses)
During Q4 2020, Hercules had net realized losses of ($14.7) million primarily from gross realized losses on the write-off or termination of equity, warrant and loan investments of ($22.4) million. These gross realized losses were offset by gross realized gains of $7.7 million due to the sale of the Company's equity investments.
Unrealized Appreciation/(Depreciation)
During Q4 2020, Hercules recorded $123.7 million of net unrealized appreciation, all of which was net unrealized appreciation from our debt, equity and warrant investments.
Portfolio Asset Quality
As of December 31, 2020, the weighted average grade of the debt investment portfolio, at fair value, improved to 2.16, compared to 2.22 as of September 30, 2020, based on a scale of 1 to 5, with 1 being the highest quality. Hercules' policy is to generally adjust the credit grading down on its portfolio companies as they approach their expected need for additional growth equity capital to fund their respective operations for the next 9-14 months. Various companies in the Company's portfolio will require additional rounds of funding from time to time to maintain their operations.
Additionally, Hercules may selectively downgrade portfolio companies, from time to time, if they are not meeting the Company's financing criteria, or underperforming relative to their respective business plans.
As of December 31, 2020, grading of the debt investment portfolio at fair value, excluding warrants and equity investments, was as follows:
Credit Grading at Fair Value, Q4 2020 - Q4 2019 ($ in millions) Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Grade 1 - High $
411.0
19.6
%
$
406.5
17.9
%
$
443.6
20.1
%
$
390.4
17.7
%
$
387.3
18.0
%
Grade 2 $
1,027.9
49.1
%
$
1,053.1
46.5
%
$
877.9
39.6
%
$
818.1
37.3
%
$
1,180.5
55.0
%
Grade 3 $
621.3
29.7
%
$
772.3
34.1
%
$
849.7
38.3
%
$
917.2
41.8
%
$
509.9
23.7
%
Grade 4 $
25.3
1.2
%
$
26.7
1.2
%
$
25.0
1.1
%
$
54.3
2.5
%
$
69.0
3.2
%
Grade 5 - Low $
8.9
0.4
%
$
5.9
0.3
%
$
20.1
0.9
%
$
15.5
0.7
%
$
1.8
0.1
%
Weighted Avg. 2.16
2.22
2.30
2.34
2.15
Non-Accruals
Non-accruals increased as a percentage of the overall investment portfolio in the fourth quarter of 2020. As of December 31, 2020, the Company had seven (7) debt investments on non-accrual with an investment cost and fair value of approximately $31.0 million and $11.9 million, respectively, or 1.3% and 0.5% as a percentage of the Company's total investment portfolio at cost and value, respectively.
Compared to September 30, 2020, the Company had five (5) debt investments on non-accrual with an investment cost and fair value of approximately $23.5 million and $6.2 million, respectively, or 0.9% and 0.3% as a percentage of the total investment portfolio at cost and value, respectively.
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Total Investments at Cost $2,315.4
$2,505.8
$2,501.4
$2,466.3
$2,402.0
Loans on non-accrual as a % of Total Investments at Value 0.5%
0.3%
0.5%
0.0%
0.0%
Loans on non-accrual as a % of Total Investments at Cost 1.3%
0.9%
2.4%
0.8%
0.4%
Liquidity and Capital Resources
In November 2020, the Company announced a private offering totaling $100.0 million in aggregate principal amount of $50.0 million 4.50% Notes due March 2026 (the "March 2026 A Notes") and $50.0 million 4.55% Notes due March 2026 (the "March 2026 B Notes"). The issuance of $50.0 million of the March 2026 A Notes occurred on November 4, 2020 and the issuance of $50.0 million of the March 2026 B Notes is expected to occur in March 2021.
The Company ended Q4 2020 with $673.3 million in available liquidity, including $198.3 million in unrestricted cash and cash equivalents, and $475.0 million in available credit facilities, subject to existing terms and advance rates and regulatory and covenant requirements.
During the three months ending December 31, 2020, the Company sold 306,000 shares of common stock under the equity ATM program, for total accumulated net proceeds of approximately $3.6 million, including $190,000 of offering expenses. During the twelve months ending December 31, 2020, the Company sold approximately 6.3 million shares of common stock, which were issued under the equity ATM program, for total accumulated net proceeds of approximately $77.2 million, including $1.0 of offering expenses, all accretive to net asset value. As of February 22, 2021, approximately 16.2 million shares remain available for issuance and sale under the Equity Distribution Agreement.
On October 27, 2020, HC IV was licensed to operate as a Small Business Investment Company (SBIC) under the SBA. This additional license has a 10-year term. The Company will gain access to $175 million of capital through the SBA debenture program, in addition to its regulatory capital contribution of $87.5 million to HC IV which will be used for investment purposes, subject to the issuance of a capital commitment by the SBA and customary procedures.
Bank Facilities
As of December 31, 2020, there were no outstanding borrowings under the Hercules' $400.0 million committed credit facility with Union Bank as Agent and no outstanding borrowings under the Hercules' $75.0 million committed credit facility with Wells Fargo Capital Finance.
Leverage
As of December 31, 2020, Hercules' GAAP leverage ratio, including its Small Business Administration "SBA" debentures, was 100.6%. Hercules' regulatory leverage, or debt-to-equity ratio, excluding its SBA debentures, was 93.0% and net regulatory leverage, a non-GAAP measure (excluding cash of approximately $198.3 million), was 77.6%. Hercules' net leverage ratio, including its SBA debentures, was 85.3%.
Available Unfunded Commitments – Representing 6.9% of Total Assets
The Company's unfunded commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans to select portfolio companies. A portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones in order to gain access to additional funding. Furthermore, the Company's credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments. In addition, since a portion of these commitments may also expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements.
As of December 31, 2020, the Company had $179.8 million of available unfunded commitments at the request of the portfolio company and unencumbered by any milestones, including undrawn revolving facilities, representing 6.9% of Hercules' total assets. This decreased from the previous quarter of $242.5 million of available unfunded commitments or 9.7% of Hercules' total assets.
Existing Pipeline and Signed Term Sheets
After closing $150.8 million in new debt and equity commitments in Q4 2020, Hercules has pending commitments of $248.0 million in signed non-binding term sheets outstanding as of February 18, 2021. Since the close of Q4 2020 and as of February 18, 2021, Hercules has closed new debt and equity commitments of $294.4 million and funded $196.3 million.
Signed non-binding term sheets are subject to satisfactory completion of Hercules' due diligence and final investment committee approval process as well as negotiations of definitive documentation with the prospective portfolio companies. These non-binding term sheets generally convert to contractual commitments in approximately 90 days from signing. It is important to note that not all signed non-binding term sheets are expected to close and do not necessarily represent future cash requirements or investments.
Net Asset Value
As of December 31, 2020, the Company's net assets were $1.29 billion, compared to $1.17 billion at the end of Q3 2020. NAV per share increased 9.7% to $11.26 on 114.7 million outstanding shares of common stock as of December 31, 2020, compared to $10.26 on 114.3 million outstanding shares of common stock as of December 31, 2020. The increase in NAV per share was primarily attributed to the net change in unrealized appreciation and earnings exceeding the distribution paid in Q4 of $0.05 per share.
Interest Rate Sensitivity
Hercules has an asset sensitive debt investment portfolio with 96.9% of its debt investment portfolio being priced at floating interest rates as of December 31, 2020, with a Prime or LIBOR-based interest rate floor, combined with 100% of its outstanding debt borrowings bearing fixed interest rates, leading to higher net investment income sensitivity.
Based on Hercules' Consolidated Statement of Assets and Liabilities as of December 31, 2020, the following table shows the approximate annualized increase/(decrease) in components of net income resulting from operations of hypothetical base rate changes in interest rates, such as Prime Rate, assuming no changes in Hercules' debt investments and borrowings. These estimates are subject to change due to the impact from active participation in the Company's equity ATM program and any future equity offerings.
(in thousands) Interest Interest Net EPS(2) Basis Point Change Income(1) Expense Income (75)
$
(9
)
$
(83
)
$
74
$
-
(50)
$
(9
)
$
(55
)
$
46
$
-
(25)
$
(9
)
$
(28
)
$
19
$
-
25
$
2,259
$
28
$
2,231
$
0.02
50
$
4,517
$
55
$
4,462
$
0.04
75
$
6,589
$
83
$
6,506
$
0.06
100
$
8,907
$
110
$
8,797
$
0.08
200
$
20,110
$
221
$
19,889
$
0.17
(1) Source: Hercules Capital Form 10-K for Q4 2020 (2) EPS calculated on basic weighted shares outstanding of 113,898. Estimates are subject to change due to impact from active participation in the Company's equity ATM program and any future equity offerings. Existing Equity and Warrant Portfolio
Equity Portfolio
Hercules held equity positions in 59 portfolio companies with a fair value of $224.7 million and a cost basis of $189.9 million as of December 31, 2020. On a fair value basis, 61.6% or $138.3 million is related to existing public equity positions.
Warrant Portfolio
Hercules held warrant positions in 100 portfolio companies with a fair value of $34.6 million and a cost basis of $25.7 million as of December 31, 2020. On a fair value basis, 38.0% or $13.1 million is related to existing public warrant positions.
Portfolio Company IPO and M&A Activity in Q4 2020 and YTD 2021
IPO Activity
As of February 18, 2021, Hercules held debt, warrant or equity positions in two (2) portfolio companies that had completed their IPOs and five (5) companies that have entered into definitive agreements to go public via a special purpose acquisition company "SPAC," including:
- In December 2020, Hercules portfolio company DoorDash, Inc. (NYSE:DASH), a technology company that connects customers with local and national businesses in more than 4,000 cities and all 50 states across the United States, Canada, and Australia, completed its initial public offering of 33.0 million shares of common stock at an initial public offering price of $102.00 per share on the New York Stock Exchange. Hercules currently holds 525,000 shares of common stock as of December 31, 2020.
- In December 2020, Hercules portfolio company 908 Devices Inc. (NASDAQ:MASS), a pioneer of purpose-built handheld and desktop mass spectrometer devices for chemical and biomolecular analysis, completed its initial public offering at an initial public offering price of $20.00 per share on the Nasdaq Global Market. Hercules initially committed $15.0 million in venture debt financing beginning in February 2017 and currently holds warrants for 49,078 shares of common stock as of December 31, 2020.
- In January 2021, Hercules portfolio company Achronix Semiconductor Corp., a semiconductor developer of FPGA and eFPGA devices, announced it has entered into a definitive agreement for a reverse merger initial public offering with ACE Convergence Acquisition Corp. (NASDAQ:ACEV), a special purpose acquisition company. Upon completion of the merger, Achronix will be listed on the Nasdaq Global Market under the ticker symbol "ACHX." Hercules initially committed $38.0 million in venture debt financing beginning in June 2011 and currently holds warrants for 360,000 shares of Preferred Series C stock and 750,000 shares of Preferred Series D-2 stock as of December 31, 2020.
- In February 2021, Hercules portfolio company Wheels Up Partners LLC, a provider of subscription club memberships for private-jet flyers, announced it has entered into a definitive agreement for a reverse merger initial public offering with Aspirational Consumer Lifestyle Corp. (NYSE:ASPL), a special purpose acquisition company. Upon completion of the merger, the Wheels Up will be listed on the New York Stock Exchange under the ticker symbol "UP." Hercules initially committed $23.0 million in venture debt financing beginning in December 2017.
- In January 2021, Hercules portfolio company Proterra, a leading commercial electric vehicle technology and manufacturing company, announced it has entered into a definitive agreement for a reverse merger initial public offering with ArcLight Clean Transition Corp. (NASDAQ:ACTC), a special purpose acquisition company. Upon completion of the merger, the Proterra will be listed on the Nasdaq Global Market under the ticker symbol "PTRA." Hercules initially committed $30.0 million in venture debt financing beginning in May 2015 and currently holds warrants for 36,360 shares of common stock, warrants for 477,517 shares of Preferred Series 4 stock and 99,280 shares of Preferred Series 5 stock as of December 31, 2020.
- In February 2021, Nerdy, the parent company of Hercules portfolio company Varsity Tutors, a technology developer of an online tutoring platform, announced it has entered into a definitive agreement for a reverse merger initial public offering with TPG Pace Tech Opportunities (NYSE:PACE), a special purpose acquisition company. Upon completion of the merger, Nerdy will be listed on the New York Stock Exchange under the ticker symbol "NRDY." Hercules initially committed $50.0 million in venture debt financing beginning in August 2019.
- In February 2021, Hercules portfolio company 23andMe Inc., a provider of consumer DNA-testing products, announced it has entered into a definitive agreement for a reverse merger initial public offering with VG Acquisition Corp. (NYSE:VGAC), a special purpose acquisition company. Upon completion of the merger, 23andMe will be listed on the New York Stock Exchange under the ticker symbol "ME." Hercules currently holds 360,000 shares of common stock as of December 31, 2020.
There can be no assurances that companies that have yet to complete their IPOs will do so.
M&A Activity
- In September 2020, Hercules' portfolio company Insurance Technologies, LLC, a provider of sales and regulatory automation solutions for the insurance and financial services industries, announced that they entered into a definitive agreement with Thomas H. Lee Partners, a premier private equity firm investing in growth companies, under which Thomas H. Lee will acquire a majority stake in Insurance Technologies. Hercules initially committed $17.5 million in venture debt financing in March 2018.
- In November 2020, Hercules' portfolio company Postmates Inc., a leader in on-demand food delivery, announced that it has reached a definitive agreement to be acquired by Uber Technologies, Inc. (NYSE:UBER), a ride-hailing company offering services that include peer-to-peer ridesharing, ride service hailing, and food delivery, for approximately $2.65 billion in an all-stock transaction. The acquisition was completed in December 2020. Hercules initially committed $20.0 million in venture debt financing in July 2018 and currently holds 32,991 shares of Uber common stock as of December 31, 2020.
- In November 2020, Hercules' portfolio company Urovant Sciences (NASDAQ:UROV), a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions, announced that they have entered into a definitive merger agreement with Sumitovant Biopharma, a global biopharmaceutical company developing investigational medicines across a range of disease areas targeting high unmet need, for Sumitovant to acquire the outstanding shares of Urovant common stock not already owned by Sumitovant. Hercules initially committed $45.0 million in venture debt financing in February 2019 and currently holds warrants for 99,777 shares of common stock, as of December 31, 2020.
- In December 2020, Hercules' portfolio company Actifio Inc., a data management company that helps companies with data continuity to be better prepared in the event of a security breach or other need for disaster recovery, announced it reached an agreement to be acquired by Google. Terms of the acquisition were not disclosed. Hercules initially committed $40.0 million in venture debt financing beginning in July 2015.
- In December 2020, Hercules portfolio company Neos Therapeutics, Inc. (NASDAQ:NEOS), a commercial stage pharmaceutical company developing and manufacturing central nervous system-focused products, announced that they entered into a definitive merger agreement with Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant patient needs. Neos will merge with a wholly owned subsidiary of Aytu in an all-stock transaction. Hercules initially committed $26.5 million in venture debt financing beginning in March 2014 and currently holds 125,000 shares of common stock, as of December 31, 2020.
- In January 2021, Hercules portfolio company Wattpad, the developer of a global multi-platform entertainment company for original stories and leading social storytelling platform, announced its unanimous approval of a definitive agreement to be acquired by Naver, South Korea's internet conglomerate and home of WEBTOON™, a leading global digital comics platform. Naver is expected to acquire Wattpad in a cash and stock transaction valued at more than an estimated USD $600.0 million, subject to customary adjustments and other terms. Hercules initially committed $10.0 million in venture debt financing beginning in February 2016.
Subsequent Events
-
As of February 18, 2021, Hercules has:
- Funded $196.3 million to new and existing commitments since the close of the fourth quarter 2020.
- Pending commitments (signed non-binding term sheets) of $248.0 million.
The table below summarizes the Company's year-to-date closed and pending commitments as follows:
Closed Commitments and Pending Commitments (in millions)
Q1 2021 Closed Commitments (as of February 18, 2021)(a)
$294.4
Q1 2021 Pending Commitments (as of February 18, 2021)(b)
$248.0
Year-to-Date 2021 Closed and Pending Commitments
$542.4
Notes:
- Closed Commitments may include renewals of existing credit facilities and equity commitments. Not all Closed Commitments result in future cash requirements. Commitments generally fund over the two succeeding quarters from close.
- Not all pending commitments (signed non-binding term sheets) are expected to close and do not necessarily represent any future cash requirements.
Conference Call
Hercules has scheduled its fourth quarter and full-year 2020 financial results conference call for February 23, 2021 at 2:00 p.m. PT (5:00 p.m. ET). To listen to the call, please dial (877) 304-8957 (or (408) 427-3709 internationally) and reference Conference ID: 1585214 if asked, approximately 10 minutes prior to the start of the call. A taped replay will be made available approximately three hours after the conclusion of the call and will remain available for seven days. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and enter the passcode 1585214.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE:HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than $11.1 billion to over 520 companies and is the lender of choice for entrepreneurs and venture capital firms seeking growth capital financing. Companies interested in learning more about financing opportunities should contact [email protected], or call 650.289.3060.
Hercules' common stock trades on the New York Stock Exchange (NYSE) under ticker symbol HTGC. In addition, Hercules has two retail bond issuances of 5.25% Notes due 2025 (NYSE:HCXZ) and 6.25% Notes due 2033 (NYSE:HCXY).
Category: Earnings
Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.
The information disclosed in this press release is made as of the date hereof and reflects Hercules' most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.
HERCULES CAPITAL, INC. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (dollars in thousands, except per share data) December 31, 2020 December 31, 2019 Assets Investments: Non-control/Non-affiliate investments (cost of $2,175,651 and $2,248,524, respectively) $
2,288,338
$
2,232,972
Control investments (cost of $65,257 and $65,333, respectively) 57,400
59,746
Affiliate investments (cost of $74,450 and $88,175, respectively)
8,340
21,808
Total investments in securities, at value (cost of $2,315,358 and $2,402,032, respectively) 2,354,078
2,314,526
Cash and cash equivalents 198,282
64,393
Restricted cash 39,340
50,603
Interest receivable 19,077
20,207
Right of use asset 9,278
11,659
Other assets 3,942
580
Total assets $
2,623,997
$
2,461,968
Liabilities Accounts payable and accrued liabilities $
36,343
$
30,306
Operating lease liability 9,312
11,538
SBA Debentures, net (principal of $99,000 and $149,000, respectively)(1) 98,716
148,165
2022 Notes, net (principal of $150,000 and $150,000, respectively)(1) 149,039
148,514
July 2024 Notes, net (principal of $105,000 and $105,000, respectively)(1) 103,942
103,685
February 2025 Notes, net (principal of $50,000 and $0, respectively)(1) 49,522
—
April 2025 Notes, net (principal of $75,000 and $75,000, respectively)(1) 73,351
72,970
June 2025 Notes, net (principal of $70,000 and $0, respectively)(1) 69,272
—
March 2026 A Notes, net (principal of $50,000 and $0, respectively)(1) 49,550
—
2033 Notes, net (principal of $40,000 and $40,000, respectively)(1) 38,610
38,501
2027 Asset-Backed Notes, net (principal of $180,988 and $200,000 respectively)(1) 178,812
197,312
2028 Asset-Backed Notes, net (principal of $250,000 and $250,000, respectively)(1) 247,647
247,395
2022 Convertible Notes, net (principal of $230,000 and $230,000, respectively)(1) 228,177
226,614
Credit Facilities —
103,919
Total liabilities $
1,332,293
$
1,328,919
Net assets consist of: Common stock, par value 115
108
Capital in excess of par value 1,158,198
1,145,106
Total distributable earnings (loss) 133,391
(12,165
)
Total net assets $
1,291,704
$
1,133,049
Total liabilities and net assets $
2,623,997
$
2,461,968
Shares of common stock outstanding ($0.001 par value, 200,000,000 authorized) 114,726
107,364
Net asset value per share $
11.26
$
10.55
(1) The Company's SBA Debentures, February 2025 Notes, June 2025 Notes, 2033 Notes, April 2025 Notes, 2022 Notes, 2027 Asset-Backed Notes, 2028 Asset-Backed Notes, 2022 Convertible Notes, July 2024 Notes, and March 2026 A Notes, as each term is defined herein, are presented net of the associated debt issuance costs for each instrument. HERCULES CAPITAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended December 31, Twelve Months Ended December 31, 2020
2019
2020
2019
Investment income: Interest and dividend income Non-control/Non-affiliate investments $
67,581
$
64,925
$
259,989
$
241,491
Control investments 740
894
2,857
4,014
Affiliate investments (76
)
267
533
2,008
Total interest income 68,245
66,086
263,379
247,513
Fee income Non-control/Non-affiliate investments 7,081
4,486
23,858
20,157
Control investments 6
5
21
18
Affiliate investments —
—
—
186
Total fee income 7,087
4,491
23,879
20,361
Total investment income 75,332
70,577
287,258
267,874
Operating expenses: Interest 15,190
14,669
59,605
54,596
Loan fees 2,001
1,285
7,269
7,078
General and administrative 4,725
4,573
18,910
19,183
Tax expenses 1,257
519
4,285
2,226
Employee compensation Compensation and benefits 6,421
7,621
28,996
30,993
Stock-based compensation 3,576
1,811
11,053
10,526
Total employee compensation 9,997
9,432
40,049
41,519
Total operating expenses 33,170
30,478
130,118
124,602
Other income(loss) —
—
—
—
Net investment income 42,162
40,099
157,140
143,272
Net realized gain (loss) on investments Non-control/Non-affiliate investments (563
)
2,890
(41,956
)
16,523
Control investments —
—
—
—
Affiliate investments (14,149
)
—
(14,149
)
—
Total net realized gain (loss) on investments (14,712
)
2,890
(56,105
)
16,523
Net change in unrealized appreciation (depreciation) on investments Non-control/Non-affiliate investments 108,756
(458
)
128,238
15,074
Control investments 2,292
1,174
(2,271
)
1,595
Affiliate investments 12,674
906
259
(2,866
)
Total net unrealized appreciation (depreciation) on investments 123,722
1,622
126,226
13,803
Total net realized and unrealized gain(loss) 109,010
4,512
70,121
30,326
Net increase(decrease) in net assets resulting from operations $
151,172
$
44,611
$
227,261
$
173,598
Net investment income before investment gains and losses per common share: Basic $
0.37
$
0.38
$
1.39
$
1.41
Change in net assets resulting from operations per common share: Basic $
1.32
$
0.42
$
2.02
$
1.71
Diluted $
1.31
$
0.42
$
2.01
$
1.71
Weighted average shares outstanding: Basic 113,898
105,634
111,985
101,132
Diluted 114,263
106,072
112,267
101,569
Distributions paid per common share: Basic $
0.34
$
0.35
$
1.38
$
1.33
View source version on businesswire.com: https://www.businesswire.com/news/home/20210223005937/en/
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Net Investment Income "NII" of $42.2 million, or $0.37 per share, an increase of 5.1% year-over-year
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– Record date for each Special Meeting of Stockholders is February 5, 2021 –
– Upon merger closing, combined company will be renamed Aytu Biopharma, Inc. –
ENGLEWOOD, Colo. and GRAND PRAIRIE, Texas, Feb. 10, 2021 (GLOBE NEWSWIRE) -- Aytu BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant patient needs, and Neos Therapeutics, Inc. (NASDAQ:NEOS), a commercial-stage pharmaceutical company developing and manufacturing central nervous system-focused products, today announced that the companies' respective special meetings of stockholders related to the proposed merger between Aytu and Neos have been set for Thursday, March 18, 2021. Stockholders of record of each company as of February 5, 2021 will be eligible to receive notice of and to vote at their respective company's special meeting.
Following stockholder approval and the satisfaction or waiver of the other conditions to the closing of the merger, the combined company will be renamed Aytu Biopharma, Inc., and its common stock will continue to trade under the symbol "AYTU" on the Nasdaq Capital Market.
As described in more detail in the definitive joint proxy statement/prospectus, both companies' Board of Directors encourage all stockholders of their respective companies to vote "FOR" all proposals in advance of the special meetings by telephone, via the Internet or by signing, dating and returning the proxy cards upon receipt by following the instructions on the proxy cards. The joint proxy statement/prospectus, which is publicly available, will first be mailed to Aytu stockholders and Neos stockholders on or about February 12, 2021.
If Neos stockholders of record have any questions or need assistance voting, please contact MacKenzie Partners, Inc., Neos' proxy solicitor, by calling (800) 322-2885 or by email to [email protected].
If Aytu stockholders of record have any questions or need assistance voting, please contact the Proxy Advisory Group, LLC, Aytu's proxy solicitor, by calling (212) 616-2181 or by email to [email protected].
About Aytu BioScience, Inc.
Aytu BioScience is a commercial-stage specialty pharmaceutical company focused on commercializing novel products that address significant patient needs. Aytu currently markets a portfolio of prescription products addressing large primary care and pediatric markets. The primary care portfolio includes (i) Natesto®, the only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone, or "Low T"), (ii) ZolpiMist®, the only FDA-approved oral spray prescription sleep aid, and (iii) Tuzistra® XR, the only FDA-approved 12-hour codeine-based antitussive syrup. The pediatric portfolio includes (i) Cefaclor, a second-generation cephalosporin antibiotic suspension; (ii) Karbinal® ER, an extended-release carbinoxamine (antihistamine) suspension indicated to treat numerous allergic conditions; and (iii) Poly-Vi-Flor® and Tri-Vi-Flor®, two complementary prescription fluoride-based supplement product lines containing combinations of fluoride and vitamins in various formulations for infants and children with fluoride deficiency. Aytu also distributes a COVID-19 IgG/IgM rapid antibody test and rapid antigen test. These tests are used separately in the rapid, qualitative diagnostic assessment of the 2019 Novel Coronavirus. Additionally, Aytu recently licensed worldwide rights to develop the Healight™ technology platform. Healight is an investigational medical device being studied as a prospective treatment for COVID-19 and other respiratory infections.
Aytu operates a consumer health subsidiary, Innovus Pharmaceuticals, Inc. ("Innovus"), a specialty pharmaceutical company commercializing, licensing and developing safe and effective consumer healthcare products designed to improve men's and women's health and vitality. Innovus commercializes numerous novel consumer health products competing in large healthcare categories including diabetes, men's health, sexual wellness, respiratory health, and general wellness. The Innovus product portfolio is commercialized through direct-to-consumer marketing channels utilizing the company's proprietary Beyond Human® marketing and sales platform.
Aytu's strategy is to continue building its portfolio of revenue-generating Rx and consumer health products, leveraging its focused commercial team and expertise to build leading brands within large therapeutic markets. For more information visit aytubio.com and visit innovuspharma.com to learn about Aytu's consumer healthcare products.
About Neos Therapeutics
Neos Therapeutics, Inc. is a commercial-stage pharmaceutical company developing and manufacturing central nervous system (CNS)-focused products. Neos markets Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), Cotempla XR-ODT® (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING), and Adzenys-ER® (amphetamine) extended-release oral suspension (see Full Prescribing Information, including Boxed WARNING), all for the treatment of ADHD. Neos also has a development candidate, NT0502, for the treatment of sialorrhea in patients with neurological conditions. Additional information about Neos is available at www.neostx.com.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. All statements other than statements of historical facts contained in this press release, are forward-looking statements. Forward-looking statements are generally written in the future tense and/or are preceded by words such as ''may,'' ''will,'' ''should,'' ''forecast,'' ''could,'' ''expect,'' ''suggest,'' ''believe,'' ''estimate,'' ''continue,'' ''anticipate,'' ''intend,'' ''plan,'' or similar words, or the negatives of such terms or other variations on such terms or comparable terminology. All statements other than statements of historical facts contained in this presentation, are forward-looking statements, including but not limited to any statements regarding the expected timetable for completing the proposed transaction, the results of the proposed transaction and any other statements regarding Aytu's or Neos' future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance. These statements are just predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include, among others: failure to obtain the required votes of Neos' stockholders or Aytu's stockholders to approve the transaction and related matters, the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all. We also refer you to (i) the risks described in "Risk Factors" in the definitive joint proxy statement/prospectus filed by Aytu and dated as of February 9, 2021, (ii) the risks described in ''Risk Factors'' in Part I, Item 1A of Aytu's Annual Report on Form 10-K and in the other reports and documents it files with the Securities and Exchange Commission and (iii) the Risk Factors set forth in Neos' Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC and in the other filings Neos makes with the SEC from time to time.