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10-Q
PARATEK PHARMACEUTICALS, INC. filed this Form 10-Q on 05/09/2018
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option to purchase up to an additional $25.0 million aggregate principal amount of Notes, which was exercised in full on April 20, 2018.

In addition, J. Wood Capital Advisors LLC, the Company’s financial advisor, purchased $5.0 million aggregate principal amount of Notes in a separate, concurrent private placement on the same terms as other investors.

We have used and we intend to continue to use the net proceeds from the above offerings of our common stock and the Notes, as well as from the Hercules Loan Agreement, as amended, together with our existing capital resources, to fund our ongoing and future clinical studies of omadacycline, to fund commercial launch, and for working capital and other general corporate purposes.

As of March 31, 2018, we had cash, cash equivalents and marketable securities of $184.3 million.

The following table summarizes our cash provided by and used in operating, investing and financing activities (in thousands):

 

 

 

Three Months Ended

March 31,

 

(in thousands)

 

2018

 

 

2017

 

Net cash used in operating activities

 

$

(19,052

)

 

$

(24,927

)

Net cash used in investing activities

 

$

(18,716

)

 

$

(3,562

)

Net cash provided by financing activities

 

$

51,692

 

 

$

36,881

 

 

Operating Activities

Cash used in operating activities for the three months ended March 31, 2018 of $19.1 million is primarily the result of our $27.8 million net loss, and a $1.5 million net decrease in other current liabilities. This is offset by $5.0 million in non-cash items, including $4.6 million in depreciation, amortization and stock-based compensation expense and $0.4 million of interest income, as well as a $4.2 million decrease in accounts receivable and a $0.7 million decrease in prepaids and other current assets. Cash used in operating activities for the three months ended March 31, 2017 of $24.9 million is primarily the result of our $27.7 million net loss as well as a $2.4 million decrease in accounts payable and accrued expenses. The remainder is the net impact of $4.4 million in non-cash items, including $4.3 million in depreciation, amortization and stock-based compensation expense, offset slightly by a $0.2 million decrease in contingent obligations to former Transcept stockholders.

Investing Activities

Net cash used in investing activities during the three months ended March 31, 2018 consists of $50.0 million investment in short-term marketable securities (U.S. treasury and government agency securities) offset by proceeds from maturities of marketable securities of $31.0 million. During the three months ended March 30, 2017, we invested $27.6 million in short-term marketable securities (U.S. treasury securities) and received proceeds from maturities of marketable securities of $25.0 million. We also purchased $0.9 million of fixed assets for our new offices in Boston and King of Prussia.

Financing Activities

Net cash provided by financing activities during the three months ended March 31, 2018 primarily represents $50.0 million in proceeds received in connection with our January 2018 public offering of common stock, net of $0.2 million in offering expenses incurred, net proceeds of $1.8 million received from the sale of shares of our common stock under the Sales Agreements and $0.2 million from the exercise of stock options. Net cash provided by financing activities during the three months ended March 31, 2017 primarily represents net proceeds of $36.9 million received from the sale of shares of our common stock under the Sales Agreement.

Future Funding Requirements

We have not generated any revenue from product sales. We do not know when, if ever, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales unless and until either we or either of our partners, Allergan or Zai, obtain regulatory approval of and commercialize one or more of our product candidates. Subject to obtaining regulatory approval for any of our product candidates, we anticipate that we will need substantial additional funding in connection with our continuing operations to support pre-launch and commercial activities associated with our lead product candidate, omadacycline.

 

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