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Forward Pharma Reports First Quarter 2015 Financial and Operational Results

COPENHAGEN, Denmark, May 12, 2015 (GLOBE NEWSWIRE) -- Forward Pharma A/S (Nasdaq:FWP) ("Forward" or the "Company"), today reported financial results for the first quarter ended March 31, 2015. Net income for the first quarter ended March 31, 2015 was $5.3 million, or $0.11 per share. On a non-GAAP basis, after removing the effect of non-cash income and expense items, our first quarter net loss for 2015 would have been approximately $6.9 million, or $0.15 per share. The comparable amounts for 2014 would have been a net loss of $4.2 million or $0.14 per share. As of March 31, 2015, Forward had $206.4 million in cash, cash equivalents and marketable securities, with no debt outstanding.

"We are off to a great start in 2015," said Peder Andersen, Chief Executive Officer of Forward. "We are particularly pleased with the progress we have made in advancing our intellectual property portfolio, as evidenced by both our senior party status in our ongoing interference proceeding in the U.S., and our recent patent grant in Europe."

First Quarter ended March 31, 2015 Financial and Operational Results

The net income for the first quarter of 2015 was $5.3 million compared to a net loss of $5.3 million for the first quarter of 2014, with the first quarter of 2015 benefiting from non-cash foreign currency gains of $14.3 million, which more than offset our operating expenses of $8.4 million.  

Research and development expenses were $4.3 million for the quarter ended March 31, 2015 compared to $2.3 million for the same period in 2014. The increase in research and development expenses in 2015 was due primarily to a $2.0 million increase in clinical and pre-clinical expenses. We continue to expect research and development costs to increase in 2015 as we advance FP187.

General and administrative expenses were $4.1 million for the first quarter of 2015 compared to $1.9 million for the same period in 2014. The increase in general and administrative expenses was primarily due to higher stock based compensation and costs related to our U.S. subsidiary which we established in the third quarter of 2014, offset by a decrease in costs related to our initial public offering which we completed in 2014. We continue to expect that our general and administrative costs will increase in 2015 versus 2014 as we expand our business, develop our intellectual property, and incur additional costs associated with operating as a public company. 

Non-cash stock based compensation expense included in total operating expenses was $2.2 million for the first quarter of 2015 versus $0.2 million for the same period in 2014.

As of March 31, 2015, Forward had $206.4 million in cash, cash equivalents and marketable securities. 

Recent IP progress and outlook 

To date in 2015, we have made significant progress in advancing our intellectual property portfolio. The following summarizes the current status of several of our most important U.S. and European patents and patent applications.

  • In April, the USPTO declared an interference between Forward and Biogen regarding the treatment of MS with a 480 mg daily dose of DMF, the active ingredient in Tecfidera®. We received senior party status based on an earlier priority date for our application 11/576,871, and we expect the initial motions to be filed in early July.
     
  • In April, we received a decision to grant from the European Patent Office for one of our patent applications in Europe covering the treatment of MS with a 480 mg daily dose of DMF. We expect this application will issue with the patent number EP2801355 on May 20, 2015.
     
  • We have two pending U.S. patent applications relating to the 480 mg daily dose of DMF that we believe may be allowable, one of which (14/213,399) claims particular up-titration schedules using delayed release formulations of DMF to treat MS, and the other (14/212,503) claims treating MS with delayed release formulations of DMF specifying levels of mono methyl fumarate (MMF- the first metabolite of DMF) in the bloodstream.
     
  • On November 18, 2014, we filed a lawsuit against Biogen alleging infringement by Tecfidera® of our German utility model related to the treatment of MS with a 480 mg dose of DMF per day. An oral proceeding in this case in Germany is scheduled for February 16, 2016.

Our development plan for our lead drug, FP187, includes preparation for a Phase 3 program in multiple sclerosis and other indications.

Forward Pharma A/S
Condensed Consolidated Statement of Operations
(in thousands, expect per share amounts)
     
   Three Months Ended 
   March 31st 
  2015 2014
     
Research and development  $ (4,320)  $ (2,345)
General and administrative  (4,069)  (1,899)
Total operating expenses  (8,389)  (4,244)
     
Fair value adjustments  --   (1,004)
Foreign exchange gain  14,310  15
Other  105  (125)
Net income (loss) before taxes  6,026  (5,358)
     
Income tax (expense) benefit  (764)  29
Net income (loss) used to compute per share amounts  $ 5,262  $ (5,329)
     
Net income (loss) per ordinary share    
Basic  $ 0.11  $ (0.18)
Diluted  $ 0.11  $ (0.18)
     
Weighted-average shares    
Basic  46,514  29,799
Diluted  49,007  29,799
     
     
Forward Pharma A/S
Reconciliation of net income (loss) as reported to non-GAAP net (loss)
(in thousands, except per share amounts)
     
   Three Months Ended 
   March 31st 
  2015 2014
     
Net income (loss) as reported   $ 5,262  $ (5,329)
Adjustments for non-cash items:    
Share based compensation  $ 2,169  $ 185
Foreign exchange gain  $ (14,310)  $ (15)
Fair value adjustment shareholder warrants  $ --   $ 1,004
     
Non-GAAP net loss  $ (6,879)  $ (4,155)
     
Non-GAAP net loss per share information:    
Weighted-average shares used  $ 46,514  $ 29,799
Non-GAAP basic per share net loss  $ (0.15)  $ (0.14)
     
     
This press release uses a non-GAAP measure of net loss that is a financial measure that is not calculated in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The Company believes that the presentation of non-GAAP net loss is useful to investors because it excludes non-cash items that do not affect the Company's liquidity and period to period changes, most of which are not within the control of the Company. Non-cash items include: (i) share-based compensation expense; (ii) non-cash foreign exchange gains or (losses) and (iii) fair value adjustments of shareholder warrants. However, there are limitations in the use of non-GAAP financial measures as they exclude certain income and expenses that are recurring in nature. Furthermore, the Company's non-GAAP financial measure may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented herein should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with IFRS.
     
     
Forward Pharma A/S
Condensed Consolidated Balance Sheet
(in thousands)
     
   March 31st   December 31st 
  2015 2014
Assets    
Cash, cash equivalents and available-for-sale financial assets  $ 206,410  $ 223,484
Other assets  2,153  1,825
Total assets  $ 208,563  $ 225,309
     
Equity and Liabilities    
Shareholder equity  $ 204,036  $ 222,394
Liabilities  4,527  2,915
Total equity and liabilities  $ 208,563  $ 225,309

About Forward Pharma:

Forward Pharma A/S is a Danish biopharmaceutical company developing FP187, a proprietary formulation of DMF (dimethyl fumarate) for the treatment of inflammatory and neurological indications. Since our founding in 2005, we have worked to advance unique formulations of DMF, which is an immune modulator, as a therapeutic agent to improve the health and well-being of patients with immune disorders including multiple sclerosis. FP187, our clinical candidate, is a DMF formulation in a delayed and slow release oral dose.

Our principal executive offices are located at Østergade 24A, 1st Floor, 1100 Copenhagen K, Denmark and our American Depositary Shares are publicly traded on NASDAQ Stock Market (symbol: FWP). For more information about the Company's products and developments, please visit our web site at http://www.forward-pharma.com.

Forward Pharma A/S Media Contact:
Sharon Klahre, Director, Investor Relations
Forward Pharma USA, LLC
7 Skyline Drive
Hawthorne, NY 10532 
SK@forward-pharma.com 
+1 914-752-3542

The Ruth Group
Lee Roth
lroth@theruthgroup.com  
+1 646-536-7014

Forward Looking Statements:

Certain statements in this press release may constitute "forward-looking statements" of the Company within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements which contain language such as "believe," "expect," "anticipate," "hope," "would" and "potential." Forward-looking statements are predictions only which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: the Company's ability to obtain, maintain and defend issued patents with protective claims; the issuance and term of term of patents; the commencement of any patent interference or infringement action; the Company's ability to prevail in or obtain a favorable decision in any such action; the Company's ability to recover damages in any such action; uncertainties relating to our development plans and activities, including the results, timing, cost and location thereof; risks and uncertainties related to the scope, validity and enforceability of our intellectual property rights in general and the impact on us of patents and other intellectual property rights of third parties. These and other factors are identified and described in detail in certain of our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 20-F for the year ended December 31, 2014. 

Forward Pharma