|
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
30 Technology Drive, Warren, NJ 07059
|
82-3827296
|
(State or other jurisdiction of Incorporation or organization)
|
(908) 941-1900
|
(I.R.S. Employer Identification Number)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $0.001 per share
|
AQST
|
NASDAQ Global Market
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
|
Emerging growth company ☒
|
Page No.
|
||
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
Item 2.
|
25
|
|
Item 3.
|
41
|
|
Item 4.
|
42
|
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
42
|
|
Item 1A.
|
45
|
|
Item 2.
|
46
|
|
Item 3.
|
46
|
|
Item 4.
|
46
|
|
Item 5.
|
46
|
|
Item 6.
|
47
|
|
48
|
Item 1. |
FINANCIAL STATEMENTS (Unaudited)
|
September 30,
2020
|
December 31,
2019
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
17,064
|
$
|
49,326
|
||||
Trade and other receivables, net
|
7,990
|
13,130
|
||||||
Inventories, net
|
3,242
|
2,859
|
||||||
Prepaid expenses and other current assets
|
3,388
|
2,999
|
||||||
Total current assets
|
31,684
|
68,314
|
||||||
Property and equipment, net
|
|
|
7,728
|
9,726
|
||||
Right-of-use assets, net
|
3,609
|
—
|
||||||
Intangible assets, net and other assets
|
7,402
|
439
|
||||||
Total assets
|
$
|
50,423
|
$
|
78,479
|
||||
Liabilities and stockholders’ deficit
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
15,237
|
$
|
17,749
|
||||
Lease liabilities, current
|
664
|
—
|
||||||
Loans payable, current
|
1,750
|
—
|
||||||
Deferred revenue, current
|
722
|
806
|
||||||
Total current liabilities
|
18,373
|
18,555
|
||||||
Loans payable, net
|
60,346
|
60,338
|
||||||
Lease liabilities
|
3,047
|
—
|
||||||
Deferred revenue, net of current portion
|
3,694
|
4,348
|
||||||
Asset retirement obligations
|
1,482
|
1,360
|
||||||
Total liabilities
|
86,942
|
84,601
|
||||||
Contingencies (note 18)
|
||||||||
Stockholders’ deficit:
|
||||||||
Common stock, $.001 par value. Authorized 250,000,000 shares; 33,619,796 and 33,562,885 shares issued and outstanding at September 30, 2020 and December 31, 2019,
respectively
|
34
|
34
|
||||||
Additional paid-in capital
|
129,336
|
124,318
|
||||||
Accumulated deficit
|
(165,889
|
)
|
(130,474
|
)
|
||||
Total stockholders’ deficit
|
(36,519
|
)
|
(6,122
|
)
|
||||
Total liabilities and stockholders’ deficit
|
$
|
50,423
|
$
|
78,479
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenues
|
$
|
8,260
|
$
|
12,418
|
$
|
38,700
|
$
|
36,190
|
||||||||
Costs and expenses:
|
||||||||||||||||
Manufacture and supply
|
2,978
|
4,643
|
10,176
|
13,569
|
||||||||||||
Research and development
|
7,260
|
5,063
|
15,461
|
17,517
|
||||||||||||
Selling, general and administrative
|
11,803
|
13,714
|
40,310
|
47,868
|
||||||||||||
Total costs and expenses
|
22,041
|
23,420
|
65,947
|
78,954
|
||||||||||||
Loss from operations
|
(13,781
|
)
|
(11,002
|
)
|
(27,247
|
)
|
(42,764
|
)
|
||||||||
Other income/(expenses):
|
||||||||||||||||
Interest expense
|
(2,778
|
)
|
(2,652
|
)
|
(8,296
|
)
|
(6,515
|
)
|
||||||||
Interest income
|
8
|
138
|
128
|
565
|
||||||||||||
Loss on extinguishment of debt
|
-
|
(4,896
|
)
|
-
|
(4,896
|
)
|
||||||||||
Net loss before income taxes
|
(16,551
|
)
|
(18,412
|
)
|
(35,415
|
)
|
(53,610
|
)
|
||||||||
Income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
$
|
(16,551
|
)
|
$
|
(18,412
|
)
|
$
|
(35,415
|
)
|
$
|
(53,610
|
)
|
||||
Comprehensive loss
|
$
|
(16,551
|
)
|
$
|
(18,412
|
)
|
$
|
(35,415
|
)
|
$
|
(53,610
|
)
|
||||
Net loss per share - basic and diluted
|
$
|
(0.49
|
)
|
$
|
(0.74
|
)
|
$
|
(1.05
|
)
|
$
|
(2.15
|
)
|
||||
Weighted-average number of common shares outstanding - basic and diluted
|
33,619,379
|
25,031,478
|
33,592,846
|
24,992,229
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity/Deficit
|
||||||||||||||||
For the periods ended September 30, 2020:
|
||||||||||||||||||||
Balance at January 1, 2020
|
33,562,885
|
$
|
34
|
$
|
124,318
|
$
|
(130,474
|
)
|
$
|
(6,122
|
)
|
|||||||||
Share-based compensation
|
19,811
|
-
|
1,823
|
-
|
1,823
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(16,530
|
)
|
(16,530
|
)
|
|||||||||||||
Balance at March 31, 2020
|
33,582,696
|
34
|
126,141
|
(147,004
|
)
|
(20,829
|
)
|
|||||||||||||
Shares issued under employee stock purchase plan
|
14,961
|
-
|
73
|
-
|
73
|
|||||||||||||||
Share-based compensation
|
18,944
|
-
|
|
1,702
|
-
|
1,702
|
||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,334
|
)
|
(2,334
|
)
|
|||||||||||||
Balance at June 30, 2020
|
33,616,601
|
34
|
127,916
|
(149,338
|
)
|
(21,388
|
)
|
|||||||||||||
Share-based compensation
|
3,195
|
-
|
1,420
|
-
|
1,420
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(16,551
|
)
|
(16,551
|
)
|
|||||||||||||
Balance at September 30, 2020
|
33,619,796
|
$
|
34
|
$
|
129,336
|
$
|
(165,889
|
)
|
$
|
(36,519
|
)
|
For the periods ended September 30, 2019:
|
||||||||||||||||||||
Balance at January 1, 2019
|
24,957,309
|
$
|
25
|
$
|
71,431
|
$
|
(61,376
|
)
|
$
|
10,080
|
||||||||||
Adoption of ASU 2014-09, ASU 2018-07 (Note 3C)
|
-
|
-
|
20
|
(2,852
|
)
|
(2,832
|
)
|
|||||||||||||
Share-based compensation
|
17,830
|
-
|
1,422
|
-
|
1,422
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(14,726
|
)
|
(14,726
|
)
|
|||||||||||||
Balance at March 31, 2019
|
24,975,139
|
25
|
72,873
|
(78,954
|
)
|
(6,056
|
)
|
|||||||||||||
Shares issued under employee stock purchase plan
|
31,393
|
-
|
132
|
-
|
132
|
|||||||||||||||
Share-based compensation
|
16,128
|
-
|
1,739
|
-
|
1,739
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(20,472
|
)
|
(20,472
|
)
|
|||||||||||||
Balance at June 30, 2019
|
25,022,660
|
25
|
74,744
|
(99,426
|
)
|
(24,657
|
)
|
|||||||||||||
Share-based compensation
|
20,304
|
-
|
1,810
|
-
|
1,810
|
|||||||||||||||
Fair value of warrants issued
|
-
|
-
|
6,800
|
-
|
6,800
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(18,412
|
)
|
(18,412
|
)
|
|||||||||||||
Balance at September 30, 2019
|
25,042,964
|
$
|
25
|
$
|
83,354
|
$
|
(117,838
|
)
|
$
|
(34,459
|
)
|
Nine Months Ended
September 30,
|
||||||||
2020
|
2019
|
|||||||
Cash flows used for operating activities:
|
||||||||
Net loss
|
$
|
(35,415
|
)
|
$
|
(53,610
|
)
|
||
Adjustments to reconcile net loss to net cash used for operating activities:
|
||||||||
Depreciation and amortization
|
2,337
|
2,288
|
||||||
Share-based compensation
|
5,052
|
5,199
|
||||||
Amortization of debt issuance costs and discounts
|
1,758
|
1,338
|
||||||
Loss on extinguishment of debt
|
-
|
4,896
|
||||||
All other non-cash expenses
|
34
|
76
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Trade and other receivables
|
5,082
|
(3,887
|
)
|
|||||
Inventories, net
|
(383
|
)
|
1,317
|
|||||
Prepaid expenses and other assets
|
(7,101
|
)
|
(1,029
|
)
|
||||
Accounts payable and accrued expenses
|
(2,573
|
)
|
(5,632
|
)
|
||||
Deferred revenue
|
(738
|
)
|
(591
|
)
|
||||
Net cash used for operating activities
|
(31,947
|
)
|
(49,635
|
)
|
||||
Cash flows used for investing activities:
|
||||||||
Capital expenditures
|
(281
|
)
|
(577
|
)
|
||||
Net cash used for investing activities
|
(281
|
)
|
(577
|
)
|
||||
Cash flows used for financing activities:
|
||||||||
Proceeds from shares issued under employee stock purchase plan
|
62
|
112
|
||||||
Proceeds from issuance of long-term debt
|
-
|
70,000
|
||||||
Debt repayment
|
-
|
(50,000
|
)
|
|||||
Payments for loan acquisition costs
|
-
|
(3,918
|
)
|
|||||
Premium paid to retire debt
|
-
|
(2,944
|
)
|
|||||
Payments for taxes on share-based compensation
|
(96
|
)
|
(2,723
|
)
|
||||
Net cash (used for)/provided by financing activities
|
(34
|
)
|
10,527
|
|||||
Net decrease in cash and cash equivalents
|
(32,262
|
)
|
(39,685
|
)
|
||||
Cash and cash equivalents:
|
||||||||
Beginning of period
|
49,326
|
60,599
|
||||||
End of period
|
$
|
17,064
|
$
|
20,914
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash payments for interest
|
$
|
6,562
|
$
|
5,153
|
||||
Net decrease in capital expenditures included in accounts payable and accrued expenses
|
(152
|
)
|
(290
|
)
|
||||
Net increase in offering costs included in accounts payable and accrued expenses
|
237
|
162
|
||||||
Warrants issued in connection with long-term debt
|
-
|
6,800
|
Note 1. |
Corporate Organization and Company Overview
|
Note 2. |
Basis of Presentation
|
Note 3. |
Summary of Significant Accounting Policies
|
Note 4. |
Risks and Uncertainties
|
Note 5. |
Revenues and Trade Receivables, Net
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Manufacture and supply revenue
|
$
|
5,903
|
$
|
9,155
|
$
|
20,078
|
$
|
24,739
|
||||||||
License and royalty revenue
|
328
|
1,356
|
13,682
|
6,402
|
||||||||||||
Co-development and research fees
|
341
|
1,073
|
870
|
2,862
|
||||||||||||
Proprietary product sales, net
|
1,688
|
834
|
4,070
|
2,187
|
||||||||||||
Total revenues
|
$
|
8,260
|
$
|
12,418
|
$
|
38,700
|
$
|
36,190
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
United States
|
$
|
6,567
|
$
|
11,022
|
$
|
35,496
|
$
|
33,683
|
||||||||
Ex-United States
|
1,693
|
1,396
|
3,204
|
2,507
|
||||||||||||
Total revenues
|
$
|
8,260
|
$
|
12,418
|
$
|
38,700
|
$
|
36,190
|
September 30,
2020
|
December 31,
2019
|
|||||||
Trade receivables
|
$
|
6,659
|
$
|
9,094
|
||||
Contract and other receivables
|
1,872
|
4,363
|
||||||
Less: allowance for bad debts
|
(264
|
)
|
(124
|
)
|
||||
Less: sales-related allowances
|
(277
|
)
|
(203
|
)
|
||||
Trade and other receivables, net
|
$
|
7,990
|
$
|
13,130
|
September 30,
2020
|
December 31,
2019
|
|||||||
Allowance for doubtful accounts at beginning of year
|
$
|
124
|
$
|
58
|
||||
Additions charged to bad debt expense
|
140
|
66
|
||||||
Write-downs charged against the allowance
|
—
|
—
|
||||||
Allowance for doubtful accounts at end of the period
|
$
|
264
|
$
|
124
|
Total Sales Related
Allowances and Accruals
|
||||
Balance at December 31, 2019
|
$
|
1,377
|
||
Provision
|
3,996
|
|||
Payments / credits
|
(3,441
|
)
|
||
Balance at September 30, 2020
|
$
|
1,932
|
Note 6. |
Material Agreements
|
Note 7.
|
Financial Instruments – Fair Value Measurements
|
|
• |
Level 1 — Observable quoted prices in active markets for identical assets or liabilities.
|
|
• |
Level 2 — Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
|
|
• |
Level 3 — Unobservable inputs that are supported by little or no market activity, such as pricing models, discounted cash flow methodologies and similar techniques.
|
Note 8. |
Inventories, Net
|
September 30,
2020
|
December 31,
2019
|
|||||||
Raw material
|
$
|
1,153
|
$
|
1,244
|
||||
Packaging material
|
1,231
|
1,096
|
||||||
Finished goods
|
858
|
519
|
||||||
Total inventory, net
|
$
|
3,242
|
$
|
2,859
|
Note 9. |
Property and Equipment, Net
|
|
Useful
Lives
|
September 30,
2020
|
December 31,
2019
|
||||||
Machinery
|
3-15 yrs
|
$
|
21,406
|
$
|
21,088
|
||||
Furniture and fixtures
|
3-15 yrs
|
1,209
|
1,150
|
||||||
Leasehold improvements
|
(a)
|
21,333
|
21,333
|
||||||
Computer, network equipment and software
|
3-7 yrs
|
2,886
|
2,787
|
||||||
Construction in progress
|
1,065
|
1,412
|
|||||||
47,899
|
47,770
|
||||||||
Less: accumulated depreciation and amortization
|
(40,171
|
)
|
(38,044
|
)
|
|||||
Total property and equipment, net
|
$
|
7,728
|
$
|
9,726
|
(a) |
Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives.
|
Note 10. |
Right-of-Use Assets and Lease Obligations
|
Remainder of 2020
|
$
|
266
|
||
2021
|
1,287
|
|||
2022
|
1,295
|
|||
2023
|
944
|
|||
2024
|
565
|
|||
2025
|
565
|
|||
2026
|
424
|
|||
Total lease payments
|
5,346
|
|||
Less: imputed interest
|
(1,635
|
)
|
||
Total operating lease liabilities
|
$
|
3,711
|
Note 11. |
Intangible Assets, Net and Other Assets
|
September 30,
2020
|
December 31,
2019
|
|||||||
Purchased technology-based intangible
|
$
|
2,358
|
$
|
2,358
|
||||
Purchased patent
|
509
|
509
|
||||||
2,867
|
2,867
|
|||||||
Less: accumulated amortization
|
(2,752
|
)
|
(2,714
|
)
|
||||
Intangible assets, net
|
115
|
153
|
||||||
Royalty receivable
|
7,000
|
-
|
||||||
Other assets, primarily security deposits
|
287
|
286
|
||||||
Total intangible assets, net and other assets
|
$
|
7,402
|
$
|
439
|
Note 12. |
Accounts Payable and Accrued Expenses
|
September 30,
2020
|
December 31,
2019
|
|||||||
Accounts payable
|
$ | 9,169 |
$
|
12,274
|
||||
Accrued compensation
|
4,129 |
3,758
|
||||||
Accrued distribution expenses
|
1,655
|
1,174
|
||||||
Other
|
284
|
543
|
||||||
Total accounts payable and accrued expenses
|
$
|
15,237
|
$
|
17,749
|
Note 13. |
12.5 % Senior Secured Notes and Loans Payable
|
Remainder of 2020
|
$
|
-
|
||
2021
|
3,500
|
|||
2022
|
10,500
|
|||
2023
|
17,500
|
|||
2024
|
24,500
|
|||
2025
|
14,000
|
|||
Total
|
$
|
70,000
|
Note 14. |
Warrants Issued to 12.5% Senior Secured Noteholders
|
Note 15. |
Net Loss Per Share
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net loss
|
$
|
(16,551
|
)
|
$
|
(18,412
|
)
|
$
|
(35,415
|
)
|
$
|
(53,610
|
)
|
||||
Denominator:
|
||||||||||||||||
Weighted-average number of common shares – basic
|
33,619,379
|
25,031,478
|
33,592,846
|
24,992,229
|
||||||||||||
Loss per common share – basic and diluted
|
$
|
(0.49
|
)
|
$
|
(0.74
|
)
|
$
|
(1.05
|
)
|
$
|
(2.15
|
)
|
September 30,
2020
|
September 30,
2019
|
|||||||
Options on common shares outstanding
|
3,075,942
|
2,256,092
|
||||||
Restricted stock units unvested
|
13,489
|
107,144
|
||||||
Warrants on common shares outstanding
|
1,571,429
|
—
|
||||||
Total potentially antidilutive derivatives excluded from losses per share
|
4,660,860
|
2,363,236
|
Note 16. |
Share-Based Compensation
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Manufacture and supply
|
$
|
73
|
$
|
60
|
$
|
208
|
$
|
176
|
||||||||
Research and development
|
178
|
188
|
543
|
536
|
||||||||||||
Selling, general and administrative
|
1,176
|
1,622
|
4,301
|
4,480
|
||||||||||||
Total share-based compensation expenses
|
$
|
1,427
|
$
|
1,870
|
$
|
5,052
|
$
|
5,200
|
||||||||
Share-based compensation from:
|
||||||||||||||||
Restricted stock units
|
$
|
16
|
$
|
473
|
$
|
789
|
$
|
1,403
|
||||||||
Stock options
|
1,411
|
1,397
|
4,252
|
3,777
|
||||||||||||
Employee stock purchase plan
|
-
|
—
|
11
|
20
|
||||||||||||
Total share-based compensation expenses
|
$
|
1,427
|
$
|
1,870
|
$
|
5,052
|
$
|
5,200
|
Restricted Stock Unit Awards (RSUs):
|
Number of
Units
|
Weighted
Average
Grant Date Fair
Value
|
||||||
(in thousands)
|
||||||||
Unvested as of December 31, 2019
|
74
|
$
|
14.64
|
|||||
Granted
|
4
|
7.54
|
||||||
Vested
|
(64
|
)
|
14.88
|
|||||
Forfeited
|
—
|
—
|
||||||
Unvested as of September 30, 2020
|
14
|
$
|
11.38
|
|||||
Grant date fair value of shares vested during the period
|
$
|
958
|
||||||
Unrecognized compensation costs as of September 30, 2020
|
$
|
140
|
Stock Option Awards:
|
Number of
Options
|
Weighted Average
Exercise Price
|
||||||
(in thousands)
|
||||||||
Outstanding as of December 31, 2019
|
2,231
|
$
|
10.42
|
|||||
Granted
|
981
|
2.68
|
||||||
Exercised, Forfeited, Expired
|
(136
|
)
|
(4.39
|
)
|
||||
Outstanding as of September 30, 2020
|
3,076
|
$
|
8.22
|
|||||
Vested or expected to vest as of September 30, 2020
|
2,866
|
$
|
8.22
|
|||||
Exercisable as of September 30, 2020
|
1,014
|
$
|
11.87
|
Expected dividend yield
|
None
|
|||
Expected volatility
|
100
|
%
|
||
Expected term (years)
|
5.5 - 6.1
|
|||
Risk-free interest rate
|
0.4 – 1.7
|
%
|
Note 17. |
Income Taxes
|
Note 18. |
Contingencies
|
• |
Mylan and Sandoz settled without a trial. Sandoz withdrew all challenges and became the distributor of the authorized generic products.
|
|
• |
All cases against Par were resolved pursuant to a May 2018 settlement agreement among the Company, Indivior, and Par and certain of its affiliates.
|
|
• |
Actavis was found to infringe Patent No. 8,603,514, or the ’514 patent, and cannot enter the market until the expiration of the patent in 2024, and the United States Court of Appeals for the Federal
Circuit (“Federal Circuit”) affirmed that ruling on July 12, 2019.
|
|
• |
DRL and Alvogen were found not to infringe under a different claim construction analysis, and the Federal Circuit affirmed that ruling on July 12, 2019. Teva has agreed to be bound by all DRL adjudications.
|
• |
The first, a declaratory judgment action brought by BDSI against Indivior and Aquestive, seeks declarations of invalidity and non-infringement of U.S. Patents Nos. 7,897,080, 8,652,378 and 8,475,832. This case is stayed.
|
• |
The second was filed by Aquestive and Indivior related to BDSI’s infringing Bunavail product, and alleges infringement of Aquestive’s patent, U.S. Patent No. 8,765,167, or the ’167 patent, and seeks an injunction and potential monetary
damages. Shortly after the case was filed, BDSI filed four (4) IPR’s challenging the asserted ’167 patent. On March 24, 2016, the United States Patent Trial and Appeal Board (“PTAB”), issued a final written decision finding that all claims
of the ’167 patent were valid. The case was stayed in May 2016 pending the final determination of the appeals on those decisions. Following the PTAB’s February 7, 2019 decisions on remand denying institution, Aquestive and Indivior submitted
a notice to the Court on February 15, 2019 notifying the Court that the stay should be lifted as a result of the PTAB’s decisions. The parties in this matter are awaiting further action from the Court.
|
|
• |
On January 13, 2017, the Company also sued BDSI asserting infringement of the ’167 patent by BDSI’s Belbuca product and seeking an injunction and potential monetary damages. On
August 7, 2019, the Eastern District of North Carolina Court granted BDSI’s motion to dismiss the Complaint without prejudice and denied BDSI’s motion to stay as moot. On November 11, 2019, Aquestive filed a new Complaint against BDSI in
the Eastern District of North Carolina Court. On November 27, 2019, BDSI filed a motion to stay the case pending BDSI’s appeal of the PTAB’s remand decisions, and the Company opposed this motion. The Eastern District of North Carolina
Court denied BDSI’s motion to stay on April 1, 2020. BDSI’s appeal of the PTAB’s remand decisions to the United States Court of Appeals for the Federal Circuit was docketed on March 13, 2019, and on March 20, 2019, and a motion was made to
dismiss this appeal for lack of jurisdiction. On August 29, 2019, the Federal Circuit granted the motion to dismiss BDSI’s appeal. On September 30, 2019, BDSI filed a petition for rehearing in the Federal Circuit en banc, which the Company opposed. The Federal Circuit denied BDSI’s petition for rehearing en
banc on January 13, 2020. On June 11, 2020, BDSI filed a petition for writ of certiorari at the Supreme Court of the United States. At the
request of the Supreme Court, Aquestive filed an opposition to BDSI’s petition on August 17, 2020, and BDSI filed a reply on August 27, 2010. On October 5, 2020, the Supreme Court issued an order denying BDSI’s petition. After the Federal Circuit denied BDSI’s petition, on January 13, 2020, BDSI filed with the Eastern District of North Carolina Court a motion to dismiss the Complaint, and Aquestive opposed on February 2, 2020. The
Eastern District of North Carolina Court denied BDSI’s motion to dismiss and its motion to stay on April 1, 2020. On April 16, 2020, BDSI
filed an Answer to the Complaint, including counterclaims for non-infringement, invalidity, and unenforceability of the ’167 patent. On May 7, 2020, Aquestive filed a motion to
dismiss BDSI’s unenforceability counterclaim and a motion to strike BDSI’s corresponding affirmative defenses for failure to state a claim for inequitable conduct under the heightened pleading standard applicable to such claims and
defenses. Rather than oppose Aquestive’s Motion to Dismiss, on May 28, 2020, BDSI amended its counterclaims and filed an Answer and Amended Counterclaims, which included additional allegations in support of BDSI’s unenforceability
counterclaim. On June 25, 2020, Aquestive filed a Motion to Dismiss BDSI’s Amended Counterclaim for unenforceability and a Motion to Strike BDSI’s corresponding affirmative defense of unenforceability again for failure to state a claim
under the applicable heightened pleading standard. BDSI’s filed its opposition to Aquestive’s Motion to Dismiss and Strike on July 16, 2020. Aquestive filed its Reply to BDSI’s Opposition on July 30, 2020. The parties are awaiting
further action from the court on Aquestive’s motion.
|
Note 19. |
Subsequent Events
|
Item 2. |
|
• |
AQST-108, a “first of its kind” oral sublingual film formulation delivering systemic epinephrine that is in development as a rescue medication for the treatment of anaphylaxis using Aquestive’s proprietary PharmFilm technologies.
Epinephrine is the standard of care for the treatment of anaphylaxis and is currently administered via subcutaneous or intramuscular injection. The current market leader is EpiPen®, a single-dose, pre-filled automatic injection device. As a
result of its administration via subcutaneous or intra-muscular injection, many patients and their caregivers are reluctant to use currently available products, resulting in increased hospital visits and overall cost of care to treat
anaphylactic events. The data from the previously completed Phase I dose escalation study demonstrated that AQST-108 achieved similar ranges of mean values of maximum concentration (Cmax) and time to reach maximum concentration (Tmax) to
that reported for injectables EpiPen and another injection device, Auvi-Q®, provided a greater total exposure (AUC0-t; area under the curve) than that reported for EpiPen and Auvi-Q, had less interpatient variability when compared to degree
of variation (CV%) data reported for EpiPen and Auvi-Q, and was well tolerated, with no study participants discontinuing participation due to an adverse event. We believe that, as a result of its sublingual administration, AQST-108 will
improve patient compliance and lower the total cost of care. After a constructive face-to-face pre-IND meeting with the FDA in early February 2020, the Company submitted an IND for AQST-108, as expected, to the FDA on June 26, 2020 and our
IND was subsequently accepted by the FDA on July 23, 2020. The FDA confirmed that the drug candidate will be reviewed under the 505(b)(2) regulatory approval pathway, and that no additional studies will be necessary prior to opening the IND
application. We expect that this pathway will provide the means to more expedient and less costly development and filing. We completed enrollment and dosing of 28 healthy volunteers in a Phase 1 pharmacokinetic (PK) trial for AQST-108 in
October 2020. The trial features a four-treatment crossover design comparing the pharmacokinetics and pharmacodynamics of AQST-108, 0.3 mg of epinephrine subcutaneous injection (subQ), 0.3 mg of epinephrine intramuscular (IM) injection, and
0.5 mg epinephrine subQ. The study includes secondary endpoints for changes in blood pressure and heart rate.
|
|
• |
AQST-305 is a sublingual film formulation of octreotide, a small peptide that has a similar pharmacological profile to natural somatostatin, for the treatment of acromegaly, as well as severe diarrhea and flushing associated with carcinoid
syndrome. Acromegaly is a hormone disorder that results from the overproduction of growth hormone in middle-aged adults. Octreotide is the standard of care for the treatment of acromegaly. The current market leader, Sandostatin®, is
administered via deep subcutaneous or intramuscular injections once a month. This monthly treatment regimen can result in loss of efficacy toward the end of the monthly treatment cycle. We are developing AQST-305 as a non-invasive,
pain-free alternative to Sandostatin to reduce treatment burden, healthcare costs and the potential loss of efficacy of the treatment cycle. AQST-305 has shown promising preclinical and human proof of concept results. While we focus our
efforts on Libervant and AQST-108 this year, limited formulation work is being done to prepare AQST-305 for additional research trials.
|
|
• |
focus on the approval of Libervant for marketing in the U.S. and, subsequently, if approved, which we cannot assure, its commercialization,
|
|
• |
continue clinical development of AQST-108 along the 505(b)(2) pathway, having begun PK clinical trials during the third quarter of 2020, subject to any delay from the coronavirus pandemic, and
|
|
• |
continue to grow Sympazan revenues as a precursor and complement to an eventual launch of Libervant, if approved for U.S. market access.
|
|
• |
employee-related expenses, including compensation, benefits, share-based compensation and travel expenses;
|
|
• |
external research and development expenses incurred under arrangements with third parties, such as contract research organizations, investigational sites and consultants, including costs associated with preclinical and clinical activities
and regulatory operations;
|
|
• |
the cost of acquiring, developing and manufacturing clinical study materials; and
|
|
• |
costs associated with preclinical and clinical activities and regulatory operations and activities.
|
|
• |
Seeking to obtain the approval and subsequent launch of Libervant, subject to approval by the FDA for marketing in the U.S., which cannot be assured.
|
|
• |
Continuing the development of AQST-108 along the 505(b)(2) pathway having begun PK clinical trials during the third quarter of 2020, subject to any delays associated with the coronavirus pandemic; and
|
|
• |
Growing the revenue contribution from Sympazan as a first step to position Aquestive in the epilepsy community.
|
Three Months Ended
September 30,
|
Change
|
|||||||||||||||
(In thousands, except %)
|
2020
|
2019
|
$ |
|
%
|
|||||||||||
Manufacture and supply revenue
|
$
|
5,903
|
$
|
9,155
|
$
|
(3,252
|
)
|
(36
|
%)
|
|||||||
License and royalty revenue
|
328
|
1,356
|
(1,028
|
)
|
(76
|
%)
|
||||||||||
Co-development and research fees
|
341
|
1,073
|
(732
|
)
|
(68
|
%)
|
||||||||||
Proprietary product sales, net
|
1,688
|
834
|
854
|
102
|
%
|
|||||||||||
Total revenues
|
$
|
8,260
|
$
|
12,418
|
$
|
(4,158
|
)
|
(33
|
%)
|
Three Months Ended
September 30,
|
Change
|
|||||||||||||||
(In thousands, except %)
|
2020
|
2019
|
$ |
%
|
||||||||||||
Manufacture and supply
|
$
|
2,978
|
$
|
4,643
|
$
|
(1,665
|
)
|
(36
|
%)
|
|||||||
Research and development
|
7,260
|
5,063
|
2,197
|
43
|
%
|
|||||||||||
Selling, general and administrative
|
11,803
|
13,714
|
(1,911
|
)
|
(14
|
%)
|
||||||||||
Interest expense
|
2,778
|
2,652
|
126
|
5
|
%
|
|||||||||||
Interest income
|
(8
|
)
|
(138
|
)
|
(130
|
)
|
(94
|
%)
|
||||||||
Loss on extinguishment of debt
|
—
|
4,896
|
(4,896
|
)
|
NM
|
Nine Months Ended
September 30,
|
Change
|
|||||||||||||||
(In thousands, except %)
|
2020
|
2019
|
$ |
%
|
||||||||||||
Manufacture and supply revenue
|
$
|
20,078
|
$
|
24,739
|
$
|
(4,661
|
)
|
(19
|
%)
|
|||||||
License and royalty revenue
|
13,682
|
6,402
|
7,280
|
114
|
%
|
|||||||||||
Co-development and research fees
|
870
|
2,862
|
(1,992
|
)
|
(70
|
%)
|
||||||||||
Proprietary product sales, net
|
4,070
|
2,187
|
1,883
|
86
|
%
|
|||||||||||
Total revenues
|
$
|
38,700
|
$
|
36,190
|
$
|
2,510
|
7
|
%
|
|
Nine Months Ended
September 30,
|
Change
|
||||||||||||||
(In thousands, except %)
|
2020 |
2019
|
$ |
|
%
|
|||||||||||
Manufacture and supply
|
$
|
10,176
|
$
|
13,569
|
$
|
(3,393
|
)
|
(25
|
%)
|
|||||||
Research and development
|
15,461
|
17,517
|
(2,056
|
)
|
(12
|
%)
|
||||||||||
Selling, general and administrative
|
40,310
|
47,868
|
(7,558
|
)
|
(16
|
%)
|
||||||||||
Interest expense
|
8,296
|
6,515
|
1,781
|
27
|
%
|
|||||||||||
Interest income
|
(128
|
)
|
(565
|
)
|
(437
|
)
|
(77
|
%)
|
||||||||
Loss on extinguishment of debt
|
—
|
4,896
|
(4,896
|
)
|
NM
|
(in thousands)
|
2020
|
2019
|
||||||
Net cash (used for) operating activities
|
$
|
(31,947
|
)
|
$
|
(49,635
|
)
|
||
Net cash (used for) investing activities
|
(281
|
)
|
(577
|
)
|
||||
Net cash (used for)/provided by financing activities
|
(34
|
)
|
10,527
|
|||||
Net decrease in cash and cash equivalents
|
$
|
(32,262
|
)
|
$
|
(39,685
|
)
|
|
• |
the effects of the COVID-19 pandemic on our operations, operations of our key suppliers and third-party clinical and other service providers, our employees and contractors and debt, equity and other capital
markets;
|
|
• |
continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for our manufactured goods, Suboxone and Sympazan, including effects of generics and other
competitive pressures as currently envisioned;
|
|
• |
continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for provided co-development and feasibility services, as well as regulatory support services
for recently licensed products, such as Exservan;
|
|
• |
access to debt or equity capital markets if, and at the time, needed for any necessary future funding;
|
|
• |
FDA approval of our key new drug candidate, Libervant, for U.S. market access. We submitted the NDA filing for Libervant in the fourth quarter of 2019 and received a PDUFA date of September 27, 2020. We
received a Complete Response Letter on September 25, 2020 denying approval of the NDA in its current form. We are planning to resubmit the NDA to the FDA and to seek to demonstrate that Libervant is “clinically superior” as a major
contribution to patient care to gain U.S. market access. There can be no assurance that we will obtain approval of Libervant for U.S. market access;
|
|
• |
our ability to issue additional lender committed debt in an aggregate amount of $10,000 of additional 12.5% Notes, which is contingent upon FDA product approval of Libervant, noted above;
|
|
• |
our ability to issue additional marketable debt in an aggregate amount of up to $20,000 of additional 12.5% Notes, which is contingent upon FDA product approval of Libervant for U.S. market access, noted above;
|
|
• |
continuing review and appropriate adjustment of our cost structure consistent with our anticipated revenues and funding;
|
|
• |
continued growth and market penetration of Sympazan within expected commercialization cost levels for this product, including anticipated patient and physician acceptance and our ability to obtain adequate
price and payment support from government agencies and other private medical insurers;
|
|
• |
effective commercialization within anticipated cost levels and expected ramp-up timeframes of our product candidate Libervant, if approved for U.S. market access by the FDA;
|
|
• |
infrastructure and administrative costs at expected levels to support operations as an FDA and highly regulated public company;
|
|
• |
a manageable level of costs for ongoing efforts to protect our intellectual property rights, including litigation costs in connection with seeking to enforce our rights concerning third parties’ at-risk launch
of generic products;
|
|
• |
continued compliance with all covenants under our 12.5% Notes; and
|
|
• |
absence of significant unforeseen cash requirements.
|
Item 3. |
Item 4. |
Item 1. |
|
● |
Mylan and Sandoz settled without a trial. Sandoz withdrew all challenges and became the distributor of the authorized generic
products.
|
|
● |
All cases against Par were resolved pursuant to a May 2018 settlement agreement between the Company, Indivior, and Par and certain of its affiliates.
|
|
● |
Actavis was found to infringe Patent No. 6,603,514, or the ’514 patent, and cannot enter the market until the expiration of the patent in 2024, and the United States
Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed that ruling on July 12, 2019.
|
|
● |
DRL and Alvogen were found not to infringe under a different claim construction analysis, and the Federal Circuit affirmed that
ruling on July 12, 2019. Teva has agreed to be bound by all DRL adjudications.
|
|
● |
The first, a declaratory judgment action brought by BDSI against Indivior and Aquestive, seeks declarations of invalidity and non-infringement of U.S. Patents Nos. 7,897,080 8,652,378 and 8,475,832. This case
is stayed.
|
|
● |
The second was filed by us and Indivior related to BDSI’s infringing Bunavail product, and alleges infringement of our patent, U.S. Patent No. 8,765,167, or the ’167 patent, and seeks an injunction and
potential monetary damages. Shortly after the case was filed, BDSI filed four (4) IPR’s challenging the asserted ’167 patent. On March 24, 2016, the United States Patent Trial and Appeal Board (PTAB), issued a final written decision finding
that all claims of the ’167 patent were valid. The case was stayed in May 2016 pending the final determination of the appeals on those decisions. Following the PTAB’s February 7, 2019 decisions on remand denying institution, we and Indivior
submitted a notice to the Court on February 15, 2019 notifying the Court that the stay should be lifted as result of the PTAB’s decisions. We are awaiting further action from the Court.
|
|
● |
On January 13, 2017, we also sued BDSI asserting infringement of the ’167 patent by BDSI’s Belbuca product and seeking an injunction and potential monetary damages. On August 7, 2019, the Eastern District of
North Carolina Court granted BDSI’s motion to dismiss the Complaint without prejudice and denied BDSI’s motion to stay as moot. On November 11, 2019, we filed a new Complaint against BDSI in the Eastern District of North Carolina Court. On
November 27, 2019, BDSI filed a motion to stay the case pending BDSI’s appeal of the PTAB’s remand decisions, and we opposed the motion. The Eastern District of North Carolina Court denied BDSI’s motion to stay on April 1, 2020. BDSI’s
appeal of the PTAB’s remand decisions to the United State Court of Appeals for the Federal Circuit was docketed on March 13, 2019, and on March 20, 2019, we moved to dismiss the appeal for lack of jurisdiction. On August 29, 2019, the
Federal Circuit granted the motion to dismiss BDSI’s appeal. On September 30, 2019, BDSI filed a petition for rehearing in the Federal Circuit en banc, which we opposed. The Federal Circuit denied
BDSI’s petition for rehearing en banc on January 13, 2020. On June 11, 2020, BDSI filed a petition for writ of certiorari at the Supreme Court of the United States. At the request of the Supreme
Court, we filed an opposition to BDSI’s petition on August 17, 2020, and BDSI filed a reply on August 27, 2010. On October 5, 2020, the Supreme Court issued an order denying BDSI’s petition. After the Federal Circuit denied BDSI’s petition,
on January 13, 2020, BDSI filed with the Eastern District of North Carolina Court a motion to dismiss the Complaint, and we opposed the motion on February 2, 2020. The Eastern District of North Carolina Court denied BDSI’s motion to dismiss
and its motion to stay on April 1, 2020. On April 16, 2020, BDSI filed an Answer to the Complaint, including counterclaims for non-infringement, invalidity, and unenforceability of the ’167 patent. On May 7, 2020, Aquestive filed a motion
to dismiss BDSI’s unenforceability counterclaim and a motion to strike BDSI’s corresponding affirmative defenses for failure to state a claim for inequitable conduct under the heightened pleading standard applicable to such claims and
defenses. Rather than oppose Aquestive’s Motion to Dismiss, on May 28, 2020, BDSI amended its counterclaims and filed an Answer and Amended Counterclaims, which included additional allegations in support of BDSI’s unenforceability
counterclaim. On June 25, 2020, Aquestive filed a Motion to Dismiss BDSI’s Amended Counterclaim for unenforceability and a Motion to Strike BDSI’s corresponding affirmative defense of unenforceability again for failure to state a claim under
the applicable heightened pleading standard. BDSI’s filed its opposition to Aquestive’s Motion to Dismiss and Strike on July 16, 2020. Aquestive filed its Reply to BDSI’s Opposition on July 30, 2020. The parties are awaiting further action
from the court on Aquestive’s motion.
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Item 1A. |
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● |
Various aspects of our clinical trials, including delays or difficulties in enrolling patients in our clinical trials, in clinical trial site initiation, and in recruiting clinical site investigators and
clinical site staff; increased rates of patients withdrawing from clinical trials; diversion of healthcare resources away from the conduct of clinical trials; interruption of key clinical trial activities such as clinical trials site data
monitoring due to limitations on travel imposed or recommended by federal or state governments; impact on employees and others or interruption of clinical trial visits or study procedures which may impact the integrity of subject data and
clinical study endpoints; and interruption or delays in the operations of the U.S. FDA, and comparable foreign regulatory agencies, which may impact regulatory review and approval timelines.
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● |
If any third-party in our supply chain for any materials, including active pharmaceutical ingredients and other raw materials supply, which we need for our product candidates for our clinical trials and for the
approved products we manufacture and distribute, are adversely impacted by restrictions resulting from the coronavirus pandemic, including staffing shortages, production slowdowns, or disruptions in freight and other transportation services
and delivery distribution systems, our supply chain may be disrupted, limiting our ability to manufacture our product candidates for our clinical trials, conduct our research, development and clinical operations, and manufacture, distribute
and sell our approved products.
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● |
We have closed our business office and requested most of our colleagues located there to work from home, restricted full-time on-site staff generally to those colleagues who must perform essential activities
on-site and implemented staggered schedules for full-time on-site staff in our research and development laboratory in order to reduce risk of transmission. Our increased reliance on colleagues and other third parties on whom we rely working
from home or having health issues may negatively impact productivity and has limited our in-person commercialization activities for our existing approved proprietary product and would limit commercial launch activities for any new approved
product, or disrupt, delay, or otherwise adversely impact our business. In addition, this could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which
could adversely impact our business operations. Our colleagues conducting research and development activities might not be able to access our laboratory or manufacturing facilities for an extended period of time as a result of any further
closure of our facilities as well as the possibility of further governmental restrictions. As a result, this could delay timely completion of pre-clinical activities, including completing Investigational New Drug (IND)/Clinical Trial
Application (CTA) enabling studies or our ability to select future development candidates, and initiation of clinical or other of our development programs and production and delivery of our products.
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● |
The FDA and comparable foreign regulatory agencies may experience disruptions, have slower response times or be under-resourced to continue to monitor our clinical trials or to conduct required activities and
review of our product candidates seeking regulatory review and such disruptions could materially affect the development, timing and approval of our product candidates.
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● |
The coronavirus pandemic may impact the requirements of our customers and growth of our approved products. For example, Indivior, our significant customer for Suboxone, had announced that it anticipated
coronavirus impact on its product sales. Further, sales force expansion may not be as productive during a time when a significant number of interactions are virtual and such interactions may not be as effective as face-to-face
interactions. Additionally, an increasing number of patient visits to their Healthcare Professionals have been virtual during the coronavirus pandemic which may reduce the likelihood that a change in medicine would occur which could impact
Sympazan growth. We cannot accurately predict the adverse impact the coronavirus pandemic will have on orders of our approved products Suboxone and Sympazan. We also have experienced in one instance, and could in the future experience, extended customer payment cycles.
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● |
As a result of concerns caused by the continuing effects of the coronavirus, we may face issues and investor concerns in raising capital through sales of our common stock or other securities, or in seeking to
monetize our licensed royalty and milestone rights. In addition, a recession, depression or other sustained adverse market event could materially and adversely affect the financial markets, our business, the value of our common stock and our
ability to obtain on favorable terms, or at all, equity or debt financing or any potential monetization of our royalty streams.
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Item 2. |
Item 3. |
Item 4. |
Item 5. |
Item 6. |
Number
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Description
|
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Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a), as amended, under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).
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||
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a), as amended, under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).
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||
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
||
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
|
||
101.INS
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XBRL Instance Document
|
|
101.SCH
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XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Aquestive Therapeutics, Inc.
(REGISTRANT)
|
|
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||
Date:
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November 4, 2020
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/s/ Keith J. Kendall
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Keith J. Kendall
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
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||
Date:
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November 4, 2020
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/s/ John T. Maxwell
|
John T. Maxwell
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Aquestive Therapeutics, Inc.;
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
|
3. |
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, consolidated results of
operations and consolidated cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of
registrant’s board of directors (or persons performing the equivalent functions):
|
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ KEITH J. KENDALL
|
|
Keith J. Kendall
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Aquestive Therapeutics, Inc.;
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this annual report;
|
|
3. |
Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, consolidated results of
operations and consolidated cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
|
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of
registrant’s board of directors (or persons performing the equivalent functions):
|
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ JOHN T. MAXWELL
|
|
John T. Maxwell
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
1. |
The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2020, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of
Section 13(a) or Section 15(d) of the Exchange Act; and
|
|
2. |
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Quarterly Report and the results of
operations of the Company for the period covered by the Quarterly Report.
|
/s/ KEITH J. KENDALL
|
|
Keith J. Kendall
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
1. |
The Company’s Quarterly Report on Form 10-Q for the period-ended September 30, 2020, to which this Certification is attached as Exhibit 32.2 (the “Quarterly Report”), fully complies with the requirements of
Section 13(a) or Section 15(d) of the Exchange Act; and
|
|
2. |
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Quarterly Report and the results of
operations of the Company for the period covered by the Quarterly Report.
|
/s/ JOHN T. MAXWELL
|
|
John T. Maxwell
|
|
Chief Financial Officer
(Principal Financial Officer)
|