Conference call begins today at 4:30 p.m.
Eastern time
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY), a
biopharmaceutical company focusing on commercializing prescription
Avenova® for the domestic eye care market, reports financial
results for the three months ended March 31, 2018 and provides a
business update.
Unit volume through the retail pharmacy channel for the first
quarter of 2018 increased 12% versus the prior-year period. Net
sales for the first quarter of 2018 were $2.9 million, compared
with $3.7 million for the first quarter of 2017, with the decrease
due to a significant increase in rebates following health insurance
deductible resets at the beginning of the year. Gross margin on net
sales for the first quarter of 2018 was 91%, an increase from 84%
for the prior-year period. Cash used in operations for the first
quarter of 2018 was $0.5 million, a significant improvement from
cash usage of $2.0 million in the prior-year period.
“In combination with the salesforce reduction at the end of
2017, we paused our planned salesforce expansion in a seasonally
slow revenue quarter to focus on identifying the most profitable
territories,” said Mark M. Sieczkarek, NovaBay’s Chairman,
President and CEO. “Although we experienced growth in unit volume
for the quarter versus the prior-year period, our net revenue
declined due to the increased impact of rebates. Pharmaceutical
manufacturers are reporting that the outsized impact of rebates
negatively impacted sales across many products during the first
quarter, including Avenova.
“We flattened our sales organization to streamline
communications and improve training and strategic execution. We are
currently recruiting sales representatives in under-served
territories. We will continue to hire new representatives before
the end of 2018 in parallel with the progress we make on increasing
insurance coverage on Avenova sales by managed care
organizations.
“As an update on our initiative to obtain new or improved
reimbursement, introductions have been made with a target group of
top managed care prospects that we expect will lead to meaningful
discussions in the second half of 2018,” he added. “We believe we
have a powerful rationale with Avenova as the only prescription
product clinically proven to reduce bacteria on ocular surfaces,
which is the underlying cause of bacterial dry eye that represents
approximately 85% of the total dry eye market.”
First Quarter Financial Highlights
Sales and marketing expenses for the first quarter of 2018 were
$3.4 million, compared with $3.7 million for the first quarter of
2017, with the decrease due primarily to a reduction in the number
of sales representatives, partially offset by higher marketing
expenses. G&A expenses for the first quarter of 2018 were $1.6
million, compared with $3.1 million for the prior-year period, with
the decrease due primarily to lower stock-based compensation
expense and lower professional services and consulting fees.
R&D expenses for the first quarter of 2018 were $46,000,
compared with $62,000 for the first quarter of 2017.
The operating loss for the first quarter of 2018 was $2.4
million, an improvement from an operating loss of $3.8 million for
the first quarter of 2017.
Non-cash gain on the change of fair value of warrant liability
for the first quarter of 2018 was $0.2 million, compared with a
non-cash loss of $0.2 million for the first quarter of 2017.
The net loss for the first quarter of 2018 was $2.2 million, or
$0.13 per share, compared with a net loss for the first quarter of
2017 of $4.0 million, or $0.26 per share.
NovaBay reported cash and cash equivalents of $8.3 million as of
March 31, 2018, compared with $3.2 million as of December 31, 2017.
In February 2018, the company raised a net $5.6 million through a
private placement of common stock.
The Company used $0.5 million in cash to fund operations in the
first quarter of 2018, an improvement from $2.0 million used to
fund operations in the first quarter of 2017. The decrease was
primarily due to a lower net loss and favorable changes in working
capital.
Conference Call
NovaBay management will host an investment community conference
call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific
time) to discuss the Company’s financial and operational results
and to answer questions. Shareholders and other interested parties
may participate in the conference call by dialing 800-608-8202 from
within the U.S. or 702-495-1913 from outside the U.S., with the
conference identification number 9649919.
A live webcast of the call will be available at
http://novabay.com/investors/events and will be archived for 90
days. A replay of the call will be available beginning two hours
after call completion through 11:59 p.m. Eastern time May 20 by
dialing 855-859-2056 from within the U.S. or 404-537-3406 from
outside the U.S., and entering the conference identification number
9649919.
About Avenova®
Avenova is an eye care product formulated with our proprietary,
stable and pure form of hypochlorous acid. It has proven in
laboratory testing to have broad antimicrobial properties as a
preservative in solution as it removes foreign material including
microorganisms and debris from the skin on the eyelids and lashes
without burning or stinging. Avenova is marketed to optometrists
and ophthalmologists throughout the U.S. by NovaBay’s direct
salesforce. It is accessible from more than 90% of retail
pharmacies in the U.S. through agreements with McKesson
Corporation, Cardinal Health and AmerisourceBergen.
About NovaBay Pharmaceuticals, Inc.: Going Beyond
Antibiotics®
NovaBay Pharmaceuticals, Inc. is a biopharmaceutical company
focusing on commercializing and developing its non-antibiotic
anti-infective products to address the unmet therapeutic needs of
the global, topical anti-infective market with its two distinct
product categories: the NEUTROX® family of products and the
AGANOCIDE® compounds. The Neutrox family of products includes
AVENOVA® for the eye care market, NEUTROPHASE® for wound care
market, and CELLERX® for the aesthetic dermatology market. The
Aganocide compounds, still under development, have target
applications in the dermatology and urology markets.
Forward-Looking Statements
This release contains forward-looking statements that are based
upon management's current expectations, assumptions, estimates,
projections and beliefs. These statements include, but are not
limited to, statements regarding our business strategies and future
focus, our estimated future revenue, and generally the Company’s
expected future financial results. Forward-looking statements can
be identified with words like (and variations of): “believe,” and
“expect.” These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
achievements to be materially different and adverse from those
expressed in or implied by the forward-looking
statements. Factors that might cause or contribute to such
differences include, but are not limited to, risks and
uncertainties relating to difficulties or delays in manufacturing,
distributing, and selling the Company's products, obtaining
adequate insurance reimbursement for the Company’s products, the
uncertainty of patent protection for the Company's intellectual
property, and any potential regulatory problems. Other risks
relating to NovaBay’s business, including risks that could cause
results to differ materially from those projected in the
forward-looking statements in this press release, are detailed in
NovaBay's latest Form 10-K filings with the Securities and Exchange
Commission, especially under the heading "Risk Factors." The
forward-looking statements in this release speak only as of this
date, and NovaBay disclaims any intent or obligation to revise or
update publicly any forward-looking statement except as required by
law.
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NovaBay ContactsFor NovaBay
Avenova purchasing information:Please call us toll free:
1-800-890-0329 or email sales@avenova.comwww.Avenova.com
NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except par value
amounts)
March 31,
December 31, 2018 2017
ASSETS Current assets: Cash and cash equivalents $ 8,336 $
3,199 Accounts receivable, net of allowance for doubtful accounts
($10 and $13 at March 31, 2018 and December 31, 2017, respectively)
2,225 3,629 Inventory, net of allowance for excess and obsolete
inventory and lower of cost or estimated net realizable value
adjustments of $138 and $140 at March 31, 2018 and December 31,
2017, respectively) 479 504 Prepaid expenses and other current
assets 1,751 1,663 Total current assets
12,791 8,995 Property and equipment, net 435 471 Other assets
597 613 TOTAL ASSETS $ 13,823 $
10,079
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: Current liabilities: Accounts payable $ 301 $ 466
Accrued liabilities 2,855 1,672 Deferred revenue 62
2,841 Total current liabilities 3,218 4,979 Deferred
revenues - non-current - 534 Deferred rent 261 286 Warrant
liability 1,275 1,489 Other liabilities 198
197 Total liabilities 4,952 7,485
Stockholders' equity : Preferred stock: 5,000 shares
authorized; none outstanding at March 31, 2018 and December 31,
2017 — — Common stock, $0.01 par value; 240,000, shares authorized
17,089 and 15,385 shares issued and outstanding at March 31, 2018
and December 31, 2017, respectively 171 154 Additional paid-in
capital 119,285 113,514 Accumulated deficit (110,585 )
(111,074 ) Total stockholders' equity 8,871
2,594 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $
13,823 $ 10,079
NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands except per share
data)
Three Months Ended March 31,
2018 2017 Sales: Product
revenue, net $ 2,934 $ 3,694 Other revenue 13 7 Total
sales, net 2,947 3,701 Product cost of goods sold 251
588 Gross profit 2,696 3,113 Research
and development 46 62 Sales and marketing 3,396 3,740 General and
administrative 1,622 3,088 Total operating expenses
5,064 6,890 Operating loss (2,368 ) (3,777 )
Non cash gain (loss) on changes in fair value of warrant liability
214 (235 ) Other income, net 4 2 Loss before
provision for income taxes (2,150 ) (4,010 ) Provision for income
tax - (1 ) Net loss and comprehensive loss $ (2,150 ) $
(4,011 ) Net loss per share attributable to common
stockholders, basic $ (0.13 ) $ (0.26 ) Net loss per share
attributable to common stockholders, diluted $ (0.14 ) $ (0.26 )
Weighted-average shares of common stock outstanding used in
computing net loss per share of common stock Basic 16,406 15,284
Diluted 16,670 15,284
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version on businesswire.com: https://www.businesswire.com/news/home/20180510006164/en/
NovaBay Pharmaceuticals, Inc.Jack
McGovernChief Financial
Officer510-899-8800jmcgovern@novabay.comorInvestor ContactLHA Investor RelationsJody
Cain310-691-7100Jcain@lhai.com
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