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Acerus Pharmaceuticals Corp.(ASP.T)  has released its financial results for the three- and 12-month period ended Dec. 31, 2016. Unless otherwise noted, all amounts are in U.S. dollars.

"Despite the introduction of an Estracetrademark generic, Acerus managed to deliver strong financial results for the year and significantly strengthened its balance sheet," said Tom Rossi, President and Chief Executive Officer. "We are very excited about the new Natestotrademark partners we have brought on board in both the US and South Korea and look forward to expanding our presence in other countries in the near future. With the addition of Gynoflor{A ™}, we have also bolstered our product portfolio in Women's Health and actively continue to pursue high quality opportunities that will help build our Canadian business."

Financial Results for the Three and Twelve Months Ended December 31, 2016

Revenue for the fourth quarter 2016 totalled $1.8 million versus $8.1 million for fourth quarter in 2015. Revenues for the year ended December 31, 2016 and 2015 were $24.5 million and $16.9 million respectively, up 45%. The increase in 2016 revenue is mainly driven by the accelerated recognition of the upfront fees received under the previous Natestotrademark licensing agreement from the fourth quarter 2015 to the end of the second quarter 2016. On a Canadian dollar basis, product sales of Estracetrademark in the fourth quarter 2016 increased by 11 percent over the third quarter 2016 but decreased by 27 percent over fourth quarter 2015 due to a third party generic obtaining public reimbursement across major provinces in July 2016. On a year over year basis, Estracetrademark product sales declined by 10 percent.

Research and development ("R&D") expenses for the three and twelve months ended December 31, 2016 were $0.4 million and $1.6 million, respectively, compared to R&D expenses for the three and twelve months ended December 31, 2015 of $0.7 million and $2.9 million, respectively. The lower expenses in the fourth quarter and fiscal 2016 reflect a decrease in product development, professional fees and clinical trial spending. Selling, general and administrative expenses ("SG&A") were $1.6 million and $5.5 million for the three and twelve months ended December 31, 2016. This compares to $1.3 million and $5.8 million for the three and twelve month periods in 2015 respectively. These results demonstrate continued tight control on expenses to help fund incremental commercial spending related to the Canadian launch of Natestotrademark.

Earnings before interest, tax, depreciation and amortization ("EBITDA") (see "Non-IFRS Financial Measures" below) for the three and twelve months ended December 31, 2016 was an income of $0.2 million and a loss of $2.6 million respectively, compared to a loss of $13.7 million and a loss of $12.3 million for the same prior year periods. Adjusted EBITDA (see "Non-IFRS Financial Measures" below) for the three and twelve months ended December 31, 2016 was a loss of $0.5 million and a loss of $0.6 million compared to a loss of less than $0.1 million and a loss of $0.9 million in the same prior year periods.

On December 31, 2016, the Company had current assets of $14.4 million and current liabilities of $8.5 million. The Company had a cash balance of $5.2 million at December 31, 2016, which was a $0.1 million increase from third quarter 2016.

The remaining $4.0 million of the Aytu upfront payment was received in January 2017. The Company used these funds to extinguish its outstanding long-term debt with an affiliate of MidCap Financial LLC.

Basic and diluted earnings per share for the three and twelve months ended December 31, 2016 were $0.00 and $0.05.


In January 2016, Natestotrademark was approved by Health Canada for commercial sale in Canada with a convenient twice-daily starting dose and it became commercially available in Canada in September 2016. Acerus markets Natestotrademark through a dedicated sales force to a select group of physicians in the major Canadian provinces. Early prescription results are very encouraging and feedback from healthcare professionals has been overwhelmingly positive.

On June 30, 2016, Acerus transitioned the U.S. commercialization rights for NATESTOtrademark to Aytu BioScience. Field promotional activities began in July 2016 and prescription trends in the U.S. remain positive with strong month over month growth.

In September 2016, the Corporation initiated an open-label study in 100 hypogonadal males in 10 Canadian centers. The study will assess a modified titration methodology, which is simplified and more in line with Canadian Men's Health Foundation Multidisciplinary Guidelines as endorsed by both the Canadian Urological Association and the Canadian Society of Endocrinology and Metabolism. The study will also capture information on the change in symptoms from baseline and patient preference, for patients having prior experience on testosterone replacement therapy medication. The study is currently expected to report out results in the third quarter of 2017.

On December 15, 2016, we granted exclusives rights to market Natestotrademark in South Korea to Hyundai Pharm Co., LTD. ("Hyundai"), a South Korean pharmaceutical company. Under the terms of the license, development and supply agreement, Acerus received a non-refundable upfront fee in January 2017. Additionally, the Company is eligible to receive another milestone payment upon regulatory approval of the product in South Korea, as well as a transfer price for supplying the product.

Additionally, the Corporation is pursuing commercial partnerships for Natestotrademark globally in other jurisdictions.


On November 16, 2015, Health Canada granted a Notice of Compliance (NOC) for a third party generic version of Estracetrademark, which obtained public reimbursement across major provinces as of July 2016 and is commercially available in Canada. Estracetrademark has been available on the Canadian market for approximately 40 years and generated net sales of CDN$9.0 million in 2016, representing a 10% decline from 2015 despite the entrance of a generic competitor. The Company is closely monitoring the situation and is implementing initiatives which can potentially minimize further erosion of sales going forward.


On February 28, 2017, the Corporation submitted a New Drug Submission ("NDS") to Health Canada to obtain marketing approval for Gynoflor{A ™} in Canada. Currently, there are no estriol + lactobacilli products approved on the Canadian market.

Gynoflor{A ™} is an ultra-low dose estrogen (estriol) and probiotic (Lactobacillus acidophilus) combination vaginal tablet used for the treatment of symptoms of vaginal atrophy, for the restoration of vaginal flora following the use of anti-infectives and for the treatment of certain vaginal infections.

Gynoflor{A ™} is approved in 41 countries across Europe, Asia-Pacific, the Middle East, Africa and South America, and it is estimated that up to 32.7 million women worldwide have been treated with the product to date.


About Acerus

Acerus Pharmaceuticals Corporation is a fully-integrated, Canadian specialty pharmaceutical company engaged in the development, manufacture, marketing and distribution of innovative, branded products in Men's and Women's Health. Acerus' shares trade on TSX under the symbol ASP. For more information, visit www.aceruspharma.com and follow us on Twitter and LinkedIn.