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Aug 01, 2017
Intersect ENT Reports Second Quarter 2017 Results

MENLO PARK, Calif.--(BUSINESS WIRE)--Aug. 1, 2017-- Intersect ENT, Inc. (NASDAQ:XENT), a company dedicated to improving the quality of life for patients with ear, nose and throat conditions, today reported financial results for the second quarter ended June 30, 2017.

Second Quarter Financial Highlights

  • Second quarter 2017 revenue was $24.0 million, a 24% increase over the second quarter 2016
  • Second quarter 2017 gross margin was 85% compared to 84% in the second quarter 2016

Second Quarter Business Highlights

  • The company launched PROPEL® Contour following approval and initial commercialization at the end of the first quarter 2017. With the addition of Contour, the company’s PROPEL family of steroid releasing implants allows for treatment of patients undergoing ethmoid, frontal or maxillary surgeries, which represent the majority of procedures for the treatment of chronic sinusitis.
  • In May 2017, the company announced that the U.S. Food and Drug Administration (FDA) accepted the New Drug Application (NDA) for SINUVATM, the company’s investigational steroid releasing implant, and set a PDUFA (Prescription Drug User Fee Act) target action date in January 2018.

Second Quarter Financial Results

Total revenue grew to $24.0 million for the second quarter of 2017, compared to $19.3 million for the same period of 2016, an increase of 24%. The increase in revenue was primarily attributable to growth in adoption of our PROPEL® family of products and an increase in the average selling price.

Gross profit for the second quarter of 2017 was $20.3 million, representing an 85% gross margin, compared to $16.2 million in the same period of the prior year, representing an 84% gross margin. The increase in gross profit was primarily attributable to an increase in the average selling price as well as to some costs associated with the sale of PROPEL Contour having been expensed in 2016 prior to FDA approval.

Operating expenses for the second quarter of 2017 were $22.9 million, compared to $22.4 million in the same period of the prior year, an increase of 2%. R&D expenses decreased to $4.2 million from $4.6 million due to lower clinical trial spending. SG&A expenses increased to $18.7 million from $17.8 million, primarily driven by increased headcount.

Cash, cash equivalents and short-term investments totaled $100.0 million as of June 30, 2017.

Outlook

The company expects to achieve revenue in the third quarter 2017 of $21.0-$21.5 million. For the full year 2017, the company is raising the revenue outlook to $91-$93 million from the prior guidance of $89-$91 million. The company continues to expect full year 2017 gross margin of approximately 84% and operating expenses in the range of $96-$98 million.

Webcast and Conference Call Information

Intersect ENT will host a conference call today at 4:30 p.m. ET to discuss the company’s second quarter 2017 results and business outlook. To access the conference call via the internet, go to the "Investor Relations" page of the company's web site at www.intersectENT.com. To access the live conference call via phone, dial 1-844-850-0548 and ask to join the Intersect ENT call. International callers may access the live call by dialing 1-412-317-5205. Participants may expedite telephone access by pre-registering for the call using the following link: http://dpregister.com/10110446.

A replay of the conference call may be accessed that same day after 8:00 p.m. ET at www.intersectENT.com or via phone at 1-877-344-7529 or 1-412-317-0088 for international callers. The reference number to enter the replay of the call is 10110446. The dial-in replay will be available for a week after the call and via the internet for approximately one month.

About Intersect ENT

Intersect ENT is dedicated to transforming the landscape of care for patients with ear, nose and throat conditions. The company’s PROPEL family of dissolvable steroid releasing implants are clinically proven to improve outcomes for chronic sinusitis patients undergoing sinus surgery. In addition, Intersect ENT is continuing to expand its portfolio of products based on the company’s unique localized steroid releasing technology and is committed to broadening patient access to less invasive and more cost-effective care.

For additional information on the company or the products, including risks and benefits, please visit www.IntersectENT.com.

The SINUVA steroid releasing implant has not been approved by the FDA and is available for investigational use only.

Intersect ENT® and PROPEL® are registered trademarks and SINUVATM is a trademark of Intersect ENT, Inc.

Forward-Looking Statements

The statements in this press release regarding Intersect ENT's continued growth, financial outlook and product development are "forward-looking" statements. These forward-looking statements are based on Intersect ENT's current expectations and inherently involve significant risks and uncertainties. These statements and risks include Intersect ENT's ability to provide solutions to improve surgical outcomes, Intersect ENT’s ability to expand the use and adoption of its current products and advance its pipeline, Intersect ENT’s ability to obtain and maintain FDA or other regulatory approvals, the ability to procure and maintain adequate coverage and reimbursement for our products and/or the procedures in which they are used, and Intersect ENT’s projections about 2017 revenue, gross margin, operating expenses and cash usage. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties which are described in the company's filings on Form 10-K, Form 10-Q and the company's other filings with the Securities and Exchange Commission (SEC) available at the SEC's Internet site (www.sec.gov). Intersect ENT does not undertake any obligation to update forward-looking statements and expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein.

XENT-F

 
Intersect ENT, Inc.
Condensed Statements of Operations
(in thousands, except percentages and per share data)
(unaudited)
       
Three Months Ended
June 30,
Six Months Ended
June 30,
2017 2016 2017 2016
Revenue $ 23,985 $ 19,317 $ 44,459 $ 36,009
Cost of sales   3,684     3,117     6,568     6,327  
Gross profit 20,301 16,200 37,891 29,682
Gross margin 85 % 84 % 85 % 82 %
 
Operating expenses:
Selling, general and administrative 18,682 17,795 39,001 35,188
Research and development   4,176     4,588     8,396     9,083  
Total operating expenses   22,858     22,383     47,397     44,271  
Loss from operations (2,557 ) (6,183 ) (9,506 ) (14,589 )
Interest income and other, net   288     224     556     409  
Net loss $ (2,269 ) $ (5,959 ) $ (8,950 ) $ (14,180 )
 
Net loss per share, basic and diluted $ (0.08 ) $ (0.21 ) $ (0.31 ) $ (0.50 )
 

Weighted average common shares used to compute net loss per share, basic and diluted

  28,950     28,379     28,830     28,293  
 
Intersect ENT, Inc.
Condensed Balance Sheets
(in thousands)
(unaudited)
   
June 30,
2017
December 31,
2016
Assets
Current assets:
Cash, cash equivalents and short-term investments $ 100,033 $ 103,945
Accounts receivable, net 12,253 14,421
Inventory 7,979 5,613
Prepaid expenses and other current assets   1,400   1,313
Total current assets 121,665 125,292
Property and equipment, net 4,237 4,127
Other non-current assets   445   358
Total assets $ 126,347 $ 129,777
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,525 $ 3,267
Accrued compensation 8,948 10,152
Other current liabilities   934   945
Total current liabilities 12,407 14,364
Deferred rent   831   1,016
Total liabilities 13,238 15,380
Total stockholders' equity   113,109   114,397
Total liabilities and stockholders' equity $ 126,347 $ 129,777

Source: Intersect ENT, Inc.

Intersect ENT, Inc.
Jeri Hilleman, 650-641-2105
ir@intersectENT.com