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, 2023

☐ 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 99,349,814 ordinary shares ($0.01 nominal value per share) outstanding as of May 10, 2023.

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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; our planned rollout of our next-generation e-commerce portal in the second half of 2023; 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:

●

Our ability to continue our operations requires that we raise additional capital and our operations could be curtailed or discontinued if we are unable to obtain the additional funding as or when needed.

●

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

●

Upneeq may fail to achieve sufficient 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.

●

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.

●

The terms of the documentation governing our indebtedness restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

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●

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

●

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.

●

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.

●

Other factors that are described in Part 1, Item 1A "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the U.S. Securities and Exchange Commission (“SEC”) on March 20, 2023.

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, 2023 and December 31, 2022	5
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss – Three Months Ended March 31, 2023 and 2022	6
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity – Three Months Ended March 31, 2023 and 2022	7
Unaudited Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2023 and 2022	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.	25
ITEM 4. Controls and Procedures.	25
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.	25
ITEM 1A. Risk Factors.	26
ITEM 5 Other Information	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, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	32,640	$	44,543
Accounts receivable and other receivables		1,879		3,031
Inventories, net		213		784
Prepaid expenses and other current assets		3,620		8,617
Total current assets		38,352		56,975
Property, plant and equipment, net		2,487		1,276
Operating lease assets		522		512
Indefinite-lived intangible assets		13,900		13,900
Goodwill		55,847		55,847
Total assets	$	111,108	$	128,510
Liabilities and Shareholders' Equity
Current liabilities:
Trade accounts payable	$	2,630	$	2,407
Accrued liabilities		9,268		15,395
Current portion of debt ($3,261 measured at fair value and representing $3,533 of aggregate unpaid principal at March 31, 2023)		4,150		1,432
Current portion of obligations under finance leases		11		10
Current portion of lease liability		306		435
Income taxes payable - current portion		43		44
Total current liabilities		16,408		19,723
Long-term debt (measured at fair value and representing $67,133 and $75,000 of aggregate unpaid principal at March 31, 2023 and December 31, 2022, respectively)		53,039		55,500
Warrant liability		1,274		1,951
Long-term portion of obligations under finance leases		15		18
Long-term portion of lease liability		229		94
Income taxes payable - long term portion		71		70
Deferred taxes		72		61
Total liabilities		71,108		77,417
Commitments and contingencies (see Note 11)
Shareholders' equity:
Ordinary shares ($0.01 nominal value, 400,000,000 shares authorized, 99,349,814 and 99,161,375 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively)		993		992
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		619,841		619,323
Accumulated deficit		(580,834)		(569,222)
Total shareholders' equity		40,000		51,093
Total liabilities and shareholders' equity	$	111,108	$	128,510

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,
	2023		2022

Net product sales	$	8,832	$	5,944
Royalty and licensing revenue		—		15,500
Total revenues		8,832		21,444
Cost of goods sold		2,299		2,144
Gross profit		6,533		19,300
Selling, general and administrative expenses		16,198		23,834
Research and development expenses		626		862
Total operating expenses		16,824		24,696
Operating loss		(10,291)		(5,396)
Interest expense and amortization of debt discount		26		985
Change in fair value of debt and interest expense		7,349		1,044
Change in fair value of warrants		(677)		4,508
Other non-operating income, net		(5,435)		(5,037)
Total other non-operating income		1,263		1,500
Loss before income taxes		(11,554)		(6,896)
Income tax expense (benefit)		58		(75)
Net loss	$	(11,612)	$	(6,821)
Change in fair value of debt due to change in credit risk, net of tax		—		(1,700)
Comprehensive loss	$	(11,612)	$	(8,521)
Loss per ordinary share:
Basic and diluted	$	(0.12)	$	(0.08)
Weighted average ordinary shares outstanding:
Basic and diluted		99,321,304		83,489,900

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, 2022		83,297,567	$	833	$	591,730	$	(517,530)	$	1,700	$	76,733
Share compensation		217,844		2		1,326		—		—		1,328
Net loss		—		—		—		(6,821)		—		(6,821)
Payments for taxes related to the net share settlement of equity awards		—		—		(57)		—		—		(57)
Change in fair value of debt due to change in credit risk		—		—		—		—		(1,700)		(1,700)
Balance at March 31, 2022		83,515,411	$	835	$	592,999	$	(524,351)	$	—	$	69,483

Balance at January 1, 2023		99,161,375	$	992	$	619,323	$	(569,222)	$	—	$	51,093
Share compensation		188,439		1		590		—		—		591
Net loss		—		—		—		(11,612)		—		(11,612)
Payments for taxes related to the net share settlement of equity awards		—		—		(72)		—		—		(72)
Balance at March 31, 2023		99,349,814	$	993	$	619,841	$	(580,834)	$	—	$	40,000

See accompanying notes to unaudited condensed consolidated financial statements.

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RVL PHARMACEUTICALS PLC

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)


	Three Months Ended March 31,
	2023		2022
Cash Flows from Operating Activities:
Net loss	$	(11,612)	$	(6,821)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		93		89
Share compensation		499		1,209
Change in fair value of debt		5,134		(400)
Change in fair value of warrants		(677)		4,508
Deferred income tax benefit		11		9
Gain on sale of fixed and leased assets		(79)		(37)
Amortization of deferred financing and loan origination fees		—		967
Change in operating assets and liabilities:
Accounts receivable and other receivables		1,152		(15,439)
Inventories, net		571		—
Prepaid expenses and other current and non-current assets		4,998		420
Trade accounts payable		224		955
Accrued and other current liabilities		(6,132)		1,264
Net cash used in operating activities		(5,818)		(13,276)
Cash Flows from Investing Activities:
Proceeds from sale of fixed and leased assets		79		37
Purchases of property, plant and equipment		(1,304)		(27)
Net cash (used in) provided by investing activities		(1,225)		10
Cash Flows from Financing Activities:
Payments on finance lease obligations		(2)		(2)
Payments on insurance financing loan		(544)		(897)
Payments for taxes related to net share settlement of share-based awards		(72)		(57)
Proceeds from issuance of ordinary shares under the ESP Plan		92		119
Debt repayments		(4,334)		—
Net cash used in financing activities		(4,860)		(837)

SEC Form 10-Q filed by RVL Pharmaceuticals plc