UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38709

RVL Pharmaceuticals plc

(Exact name of registrant as specified in its charter)


Ireland		Not Applicable
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

400 Crossing Boulevard

Bridgewater, NJ 08807

(Address of principal executive offices)

(Zip Code)

(908) 809-1300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, $0.01 nominal value per share	RVLP	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

There were 83,549,659 ordinary shares ($0.01 nominal value per share) outstanding as of May 11, 2022.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "plan," "should," "estimate," "continue," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives and financial needs. Examples of forward-looking statements include, among others, statements we make regarding: our intentions, beliefs or current expectations concerning, among other things, future operations; future financial performance, trends and events, particularly relating to sales of Upneeq; U.S. Food and Drug Administration, or the FDA, and other regulatory applications, approvals and actions; the continuation of historical trends; our ability to manage costs and service our debt; and the sufficiency of our cash balances and cash generated from operating and financing activities for future liquidity and capital resource needs.

We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include the following:

●

Due to our dependence on one product, Upneeq, our business could be materially adversely affected if Upneeq does not perform as well as expected.

●

Our business may be adversely affected by the ongoing coronavirus outbreak.

●

Upneeq may fail to achieve market acceptance by clinicians and patients, or others in the medical community, and the market opportunity for Upneeq may be smaller than we estimate.

●

If we are unable to successfully commercialize Upneeq, or develop new products, on a timely or cost effective basis, our operating results will suffer.

●

Our profitability depends on our customers’ willingness to pay the price we charge for Upneeq. If we decide to lower the price we charge for Upneeq our profitability could materially suffer.

●

Our marketing and sales expenditures may not result in the commercial success of Upneeq.

●

There is no certainty that we will be able to get FDA approval of arbaclofen extended release (“ER”) and no certainty that we will be able to realize any value for arbaclofen ER if we decide to license or divest the product.

●

We expend a significant amount of resources on research and development, including milestones on in licensed products, which may not lead to successful product introductions.

●

If we are unable to maintain our sales, marketing and distribution capabilities, or establish additional capabilities if and when necessary, we may not be successful in commercializing Upneeq.

●

We depend to a large extent on third-party suppliers and distributors for Upneeq, including Nephron Pharmaceuticals, and if such suppliers and distributors are unable to supply raw materials for manufacture and deliver Upneeq in a timely manner, or are unable to manufacture Upneeq at a scale sufficient to meet demand, it could have material adverse effect on our business, financial position and results of operations.

●

If Upneeq does not produce the intended effects, our business may suffer.

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●

Failures of or delays in clinical trials are common and have many causes, and such failures or delays could result in increased costs to us and could prevent or delay our ability to obtain regulatory approval and commence product sales for new products.

●

The drug regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.

●

We are, and will continue to be in the future, a party to legal proceedings that could result in adverse outcomes;

●

Other factors that are described in Part 1, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 30, 2022.

The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. We 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. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.

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TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited).	5
Unaudited Condensed Consolidated Balance Sheets – March 31, 2022 and December 31, 2021	5
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss – Three Months Ended March 31, 2022 and 2021	6
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three Months Ended March 31, 2022 and 2021	7
Unaudited Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2022 and 2021	8
Notes to Unaudited Condensed Consolidated Financial Statements	9
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.	26
ITEM 4. Controls and Procedures.	26
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.	26
ITEM 1A. Risk Factors.	26
ITEM 6. Exhibits.	27

SIGNATURES	28

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PART I – FINANCIAL INFORMATION

Item 1.Financial Statements (unaudited).

RVL PHARMACEUTICALS PLC

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	26,341	$	40,444
Other receivables		17,572		2,133
Inventories, net		838		838
Prepaid expenses and other current assets		12,481		12,901
Financial commitment asset		2,096		3,063
Total current assets		59,328		59,379
Property, plant and equipment, net		804		866
Operating lease assets		1,119		1,368
Indefinite-lived intangible assets		27,210		27,210
Goodwill		55,847		55,847
Total assets	$	144,308	$	144,670
Liabilities and Shareholders' Equity
Current liabilities:
Trade accounts payable	$	4,732	$	3,777
Accrued liabilities		14,345		13,077
Current portion of debt		1,512		2,409
Current portion of obligations under finance leases		2		5
Current portion of lease liability		688		839
Income taxes payable - current portion		13		1
Total current liabilities		21,292		20,108
Long-term debt (measured at fair value and representing $55,000 of aggregate unpaid principal)		45,100		43,800
Warrant liability		7,728		3,220
Long-term portion of lease liability		478		592
Income taxes payable - long term portion		67		66
Deferred taxes		160		151
Total liabilities		74,825		67,937
Commitments and contingencies (See Note 11)
Shareholders' equity:
Ordinary shares ($0.01 nominal value, 400,000,000 shares authorized, 83,515,411 and 83,297,567 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively)		835		833
Preferred shares ($0.01 nominal value, 40,000,000 shares authorized, no shares issued and outstanding)		—		—
Euro deferred shares (€1.00 nominal value, 25,000 shares authorized, no shares issued and outstanding)		—		—
Additional paid in capital		592,999		591,730
Accumulated deficit		(524,351)		(517,530)
Accumulated other comprehensive income		—		1,700
Total shareholders' equity		69,483		76,733
Total liabilities and shareholders' equity	$	144,308	$	144,670

See accompanying notes to unaudited condensed consolidated financial statements.

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RVL PHARMACEUTICALS PLC

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)


	Three Months Ended March 31,
	2022		2021

Net product sales	$	5,944	$	773
Royalty and licensing revenue		15,500		162
Total revenues		21,444		935
Cost of goods sold		2,144		679
Gross profit		19,300		256
Selling, general and administrative expenses		23,834		16,952
Research and development expenses		862		2,204
Total operating expenses		24,696		19,156
Operating loss before gain on sales of product rights, net		(5,396)		(18,900)
Gain on sales of product rights, net		—		5,636
Operating loss		(5,396)		(13,264)
Interest expense and amortization of debt discount		985		521
Change in fair value of debt and interest expense		1,044		—
Change in fair value of warrants		4,508		—
Other non-operating income, net		(5,037)		(9)
Total other non-operating expense		1,500		512
Loss before income taxes		(6,896)		(13,776)
Income tax benefit, continuing operations		(75)		(4)
Loss from continuing operations		(6,821)		(13,772)
Income from discontinued operations before income taxes		—		4,699
Income tax expense, discontinued operations		—		539
Income from discontinued operations, net of tax		—		4,160
Net loss	$	(6,821)	$	(9,612)
Change in fair value of debt due to change in credit risk, net of tax		(1,700)		—
Comprehensive loss	$	(8,521)	$	(9,612)
(Loss) earnings per ordinary share:
Basic and diluted, continuing operations	$	(0.08)	$	(0.22)
Basic and diluted, discontinued operations		—		0.07
Basic and diluted	$	(0.08)	$	(0.15)
Weighted average ordinary shares outstanding:
Basic and diluted		83,489,900		62,678,130

See accompanying notes to unaudited condensed consolidated financial statements.

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RVL PHARMACEUTICALS PLC

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity

(In thousands, except share data)


									Accumulated
									other
	Ordinary shares				Additional		Accumulated		comprehensive		Total
	Shares		Amount		paid in capital		deficit		income (loss)		shareholders' equity
Balance at January 1, 2021		62,545,832	$	625	$	548,070	$	(452,610)	$	(2,229)	$	93,856
Share compensation		173,299		2		1,309		—		—		1,311
Net loss		—		—		—		(9,612)		—		(9,612)
Payments for taxes related to the net share settlement of equity awards		—		—		(358)		—		—		(358)
Balance at March 31, 2021		62,719,131	$	627	$	549,021	$	(462,222)	$	(2,229)	$	85,197

Balance at January 1, 2022		83,297,567	$	833	$	591,730	$	(517,530)

SEC Form 10-Q filed by RVL Pharmaceuticals plc