Business |
12 Months Ended |
|---|---|
Dec. 31, 2017 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Business |
Business
We are a biopharmaceutical company with the near-term goal of becoming a self-sustained, integrated pharmaceutical company that is focused on pediatric healthcare. We have a diverse portfolio of products and product candidates in development with a focus on patients with rare neurological and psychiatric disorders. The Company's pipeline is led by CERC-301, which Cerecor currently intends to explore as a novel treatment for orphan neurological indications. The Company is also developing three preclinical stage compounds, CERC-611,CERC-406 and CERC-425.
We were incorporated in 2011 and commenced operations in the second quarter of 2011.In August 2017, we sold our worldwide rights to CERC-501 to Janssen Pharmaceuticals, Inc. (“Janssen”) in exchange for initial gross proceeds of $25 million, of which $3.75 million was deposited into a twelve-month escrow to secure certain indemnification obligations to Janssen, as well as a potential future $20 million regulatory milestone payment. The terms of the agreement provide that Janssen will assume ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. On November 17, 2017, we acquired TRx Pharmaceuticals, LLC (“TRx”) and its wholly-owned subsidiaries (see Acquisition of TRx Pharmaceuticals for a description of the transaction).
On February 16, 2018, we purchased and acquired all rights to Avadel Pharmaceuticals PLC’s (“Advadel's)”) marketed pediatric products (the “Acquired Products”) for the assumption of certain of Avadel's financial obligations to Deerfield CSF, LLC, which includes a $15 million loan due in January 2021 and its related interest payments as well as a 15% annual royalty on net sales of the Acquired Products through February 2026.
Liquidity
For the year ended December 31, 2017, the Company generated net income of $11.9 million and positive cash flows from operations of $12.5 million. Prior to the year ended December 31, 2017, the Company had incurred recurring operating losses since inception. As a result of the TRx and Avadel acquisitions, our commercial operations are expected to generate positive cash flows from product sales.
As of December 31, 2017, the Company had an accumulated deficit of $58.2 million and a balance of $2.5 million in cash and cash equivalents. The Company anticipates generating positive cash flows from our commercial operations to offset costs related to its preclinical programs, additional clinical development of its product candidates, business development and costs associated with its organizational infrastructure. We apply a disciplined decision making methodology as we evaluate the optimal allocation of our resources between investing in our current commercial product line, our development portfolio and acquisitions or in-licensing of new assets.The Company, however, may require additional financing to continue to execute its clinical development strategy. The Company plans to meet its capital requirements primarily through a combination of equity or debt financings, collaborations, or out-licensing arrangements, strategic alliances, federal and private grants, marketing, distribution or licensing arrangements and in the longer term, revenue from product sales to the extent its product candidates receive marketing approval and are commercialized.
The Company expects its cash on hand at December 31, 2017 and its cash flows from operations to fund future expenses through at least April 2, 2019.
|