Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY), a
biopharmaceutical company focusing on commercializing Avenova® for
the domestic eye care market, reports financial results for the
three and nine months ended September 30, 2019 and provides a
business update.
“Overall demand for Avenova was strong during the quarter with
unit sales remaining steady with the prior year despite the
significantly reduced size of our salesforce. We are pleased with
the sales momentum through our new direct-to-consumer channel on
Amazon.com, and we remain on track to reach our 2019 revenue
guidance of $6 million to $8 million,” said Justin Hall, President
and CEO of NovaBay Pharmaceuticals.
“Our recently improved capital position is allowing us to focus
on broadening our product portfolio with several Avenova product
line extensions, while also seeking other opportunities to further
leverage our domestic commercial organization by increasing product
offerings through partnerships, licensing and co-promotion
activities,” he added. “Later this month, in order to further
leverage our sales force and to generate some additional revenue,
we will begin a 90-day trial selling the NuLids System®, an
innovative device for the treatment of dry eye, in six
top-producing U.S. geographic territories. We also just announced a
soft direct-to-consumer launch in the U.S. of our skin and wound
cleanser CelleRx® through our new website, www.CelleRx.com. We plan
to increase marketing in early 2020 to promote this product, which
is proven to gently clean and ease discomfort following aesthetic
dermatology and cosmetic surgery procedures.
“In addition to these strategic moves, our increased capital
position allows us to more fully focus on building our business
through new marketing and branding initiatives. One such initiative
is the engagement of an experienced online branding firm to
implement strategies to increase unit sales of Avenova on Amazon by
broadening our current customer base,” Hall concluded.
Third Quarter Financial Results
Net sales for the third quarter of 2019 were $1.6 million
compared with $3.1 million for the third quarter of 2018. The
decrease was primarily due to the loss of insurance reimbursement
and the resulting lower Avenova gross-to-net pricing. Gross margin
on net product revenue was 75% for the third quarter of 2019
compared with 89% for the prior-year period, with the decrease due
to lower product revenue mentioned above.
Operating expenses for the third quarter of 2019 were $2.9
million, down 37% from $4.6 million in the third quarter of 2018
reflecting the strategic shift in the U.S. commercial organization
undertaken in March 2019. Sales and marketing expenses for the
third quarter of 2019 were $1.5 million, a 52% decrease from $3.2
million for the third quarter of 2018. General and administrative
expenses for the third quarters of 2019 and 2018 were unchanged at
$1.3 million for both periods. Research and development expenses
for the third quarter of 2019 were $49,000 compared with $45,000
for the third quarter of 2018.
Operating loss for the third quarter of 2019 was $1.7 million
compared with $1.8 million for the third quarter of 2018.
Non-cash gain on the change of fair value of warrant liability
for the third quarter of 2019 was $1.5 million compared with a
non-cash gain of $0.3 million for the third quarter of 2018.
Non-cash gain on the embedded derivative associated with the
convertible note for the third quarter of 2019 was $0.7 million.
The Company did not record a comparable loss or gain for the third
quarter of 2018.
Other expense for the third quarter of 2019 was $0.7 million
compared with other income of $4,000 for the third quarter of 2018.
The other expense in 2019 was due to interest due on the Promissory
Note issued in February 2019, the amortization of discount and
issuance cost related to the Convertible Note issued in March 2019,
and the issuance cost related to issuance of common stock, Series A
Preferred Stock and warrants in August 2019.
Net loss for the third quarter of 2019 was $0.3 million, or
$0.01 per share, compared with a net loss for the third quarter of
2018 of $1.5 million, or $0.09 per share.
Nine Month Financial Results
Net sales for the nine months ended September 30, 2019 were $4.9
million compared with $8.9 million for the nine months ended
September 30, 2018. Gross margin on net product revenue was 77% for
the first nine months of 2019 compared with 88% for the first nine
months of 2018.
Operating expenses for the nine months ended September 30, 2019
were $10.9 million, a 23% decrease from the prior-year period and
included sales and marketing expenses of $6.6 million, general and
administrative expenses of $4.1 million and research and
development expenses of $0.2 million.
Operating loss for the nine months ended September 30, 2019 was
$7.2 million compared with $6.3 million for the first nine months
of 2018.
Non-cash gain on the change of fair value of warrant liability
for the first nine months of 2019 was $0.9 million compared with a
non-cash gain of $1.0 million for the first nine months of
2018.
Non-cash gain on the embedded derivative associated with the
Convertible Note for the first nine months of 2019 was $0.4
million. The Company did not record a comparable loss or gain for
the first nine months of 2018.
Other expense for the first nine months of 2019 was $1.2 million
compared with other income of $13,000 for the same period of 2018.
The other expense was due to interest due on the Promissory Note
issued in February 2019, the amortization of discount and issuance
cost related to the Convertible Note issued in March 2019, and the
issuance cost related to issuance of common stock, Series A
Preferred Stock and warrants in August 2019.
Net loss for the nine months ended September 30, 2019 was $7.0
million, or $0.36 per share, compared with a net loss for the nine
months ended September 30, 2018 of $5.3 million, or $0.31 per
share.
NovaBay reported cash and cash equivalents of $9.0 million as of
September 30, 2019 compared with $3.2 million as of December 31,
2018. The Company raised $1.0 million through a related-party loan
in February, $2.0 million through a convertible loan in March, $2.4
million in June through private placements of common stock, $4.2
million in August through a registered direct offering of common
stock and $2.7 million in August through a private placement of
convertible preferred stock.
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 5868436.
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 ends through 11:59 p.m. Eastern time
November 25, 2019 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 5868436.
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
product offerings, our estimated future revenue, and generally the
Company’s expected future financial results. 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 the size of the potential market for our
products, improving sales rep productivity and product
distribution, obtaining adequate insurance reimbursement, 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-Q/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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Avenova Purchasing Information
For NovaBay Avenova purchasing information: Please call
800-890-0329 or email sales@avenova.com. www.Avenova.com
NOVABAY PHARMACEUTICALS,
INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except par
value amounts)
September 30,
December 31,
2019
2018
(Unaudited)
ASSETS Current assets: Cash and cash equivalents
$
9,020
$
3,183
Accounts receivable, net of allowance for doubtful accounts ($24
and $10 at September 30, 2019 and December 31, 2018, respectively)
1,505
3,385
Inventory, net of allowance for excess and obsolete inventory and
lower of cost or estimated net realizable value adjustments ($135
and $104 at September 30, 2019 and December 31, 2018, respectively)
838
280
Prepaid expenses and other current assets
1,135
1,760
Total current assets
12,498
8,608
Operating lease right-of-use assets
1,435
— Property and equipment, net
128
201
Other assets
542
552
TOTAL ASSETS
$
14,603
$
9,361
LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities:
Current liabilities: Accounts payable
$
503
$
551
Accrued liabilities
1,642
3,255
Deferred revenue —
41
Operating lease liabilities
1,058
— Notes payable, related party
1,155
— Convertible note
1,890
— Embedded derivative liability
4
— Total current liabilities
6,252
3,847
Operating lease liabilities-non-current
627
— Deferred rent —
184
Warrant liability
3,902
178
Other liabilities
315
198
Total liabilities
11,096
4,407
Series A non-voting convertible preferred stock, $0.01 par
value; 2,700 shares authorized; 2,700 and 0 shares issued and
outstanding at September 30, 2019 and December 31, 2018,
respectively
584
— Stockholders' equity : Common stock, $0.01 par value; 50,000
shares authorized; 25,202 and 17,089 shares issued and outstanding
at September 30, 2019 and December 31, 2018, respectively
252
171
Additional paid-in capital
125,009
119,764
Accumulated deficit
(122,338)
(114,981)
Total stockholders' equity
2,923
4,954
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
14,603
$
9,361
NOVABAY PHARMACEUTICALS,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except per
share data)
Three Months Ended September 30, Nine Months Ended
September 30,
2019
2018
2019
2018
Sales: Product revenue, net
$
1,615
$
3,142
$
4,854
$
8,870
Other revenue
-
-
41
13
Total sales, net
1,615
3,142
4,895
8,883
Product cost of goods sold
401
332
1,145
1,062
Gross profit
1,214
2,810
3,750
7,821
Research and development
49
45
166
152
Sales and marketing
1,544
3,230
6,610
9,603
General and administrative
1,333
1,344
4,136
4,326
Total operating expenses
2,926
4,619
10,912
14,081
Operating loss
(1,712)
(1,809)
(7,162)
(6,260)
Non-cash gain on changes in fair value of warrant liability
1,480
267
936
971
Non-cash gain on changes in fair value of embedded derivative
liability
669
-
423
-
Other (expense) income, net
(719)
4
(1,166)
13
Loss before provision for income taxes
(282)
(1,538)
(6,969)
(5,276)
Provision for income tax
-
-
(3)
(1)
Net loss and comprehensive loss
$
(282)
$
(1,538)
$
(6,972)
$
(5,277)
Net loss per share attributable to common stockholders,
basic
$
(0.01)
$
(0.09)
$
(0.36)
$
(0.31)
Net loss per share attributable to common stockholders, diluted
$
(0.02)
$
(0.11)
$
(0.36)
$
(0.37)
Weighted-average shares of common stock outstanding used in
computing net loss per share of common stock Basic
23,096
17,089
19,623
16,864
Diluted
23,213
17,148
19,623
17,056
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107005827/en/
NovaBay Contact Justin Hall President and Chief Executive
Officer 510-899-8800 jhall@novabay.com
Investor Contact LHA Investor Relations Jody Cain
310-691-7100 jcain@lhai.com
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