MISSISSAUGA, ON, Aug. 5, 2015 /CNW/ - Nuvo Research Inc.
(TSX:NRI), a specialty pharmaceutical company with a diverse
portfolio of topical and immunology products, today announced its
financial and operational results for the second quarter ended
June 30, 2015.
Second Quarter and Recent Corporate
Developments:
Pennsaid® 2%
- U.S. prescriptions of Pennsaid 2% increased from approximately
31,000 in Q1 to 76,000 in Q2 according to IMS Health. Under the
terms of an exclusive manufacturing agreement, the Company earns
revenue from U.S. product sales of Pennsaid 2% to Horizon Pharma
(Horizon), which acquired the U.S. Pennsaid 2% rights from the
Company in Q4 2014. Since its launch by Horizon on January 1, 2015, U.S. prescriptions for Pennsaid
2% have increased significantly from 18,000 prescriptions in the
fourth quarter of 2014;
- In June, the Company received approval from the German Federal
Institute for Drugs and Medical Devices (BfArM) to conduct a Phase
3 clinical trial in Germany of
Pennsaid 2% for the treatment of acute pain to support regulatory
approval applications for Pennsaid 2% in international
jurisdictions. The trial commenced in July
2015 and topline results are expected in Q4 2015 or Q1 2016;
and
- The Company retained PricewaterhouseCoopers Corporate Finance
Inc. (PwC) to assist it in securing international license
agreements for Pennsaid 2%. PwC will assist Nuvo in identifying,
contacting and qualifying potential licensees for available
territories using its international offices and contacts. An
information sheet outlining the licensing opportunity has been
posted to the Company's website at www.nuvoresearch.com.
WF10™
- The Company has completed dosing of its Phase 2 trial using
WF10 for the treatment of allergic rhinitis. This trial was
expected to enroll approximately 146 patients; however, due to the
strict selection criteria that included the use of an Environmental
Exposure Chamber (EEC) and a tight enrollment window, 74 patients
have completed dosing and commenced the field portion of the trial.
Topline results are expected to be available in late Q4 2015 or
early Q1 2016. The Company believes that the number of patients
being studied is sufficient to analyze the safety and efficacy of
WF10 in the treatment of allergic rhinitis and to make a decision
on its further development.
- "We are making great progress executing our business strategy,"
said Dan Chicoine, Nuvo's Chairman
and Co-CEO. "Pennsaid 2% U.S. sales by Horizon continue to grow and
we anticipate growth to continue, generating additional cash flow
from our Varennes manufacturing
facility. The U.S. success of Pennsaid 2% validates it as a high
potential product and supports our recently launched international
out-licensing initiatives supported by PwC. In Q2, we initiated
important clinical trials of WF10 and Pennsaid 2% and should have
the results by the end of the year or in early 2016. Finally, we
continue to aggressively explore a number of strategic options that
we believe will unlock unrecognized value in Nuvo for the benefit
of Nuvo shareholders."
- "Our financial results continue to benefit from an increased
gross margin on product sales as a result of Horizon's success in
growing Pennsaid 2% sales in the U.S.," said Stephen Lemieux, Nuvo's Vice-President and Chief
Financial Officer. "Our sales to Horizon in the quarter were
slightly lower than Q1, as Horizon filled prescriptions mainly from
inventory that we shipped in Q1 when it was stocking its
distribution channels. For the second half of 2015, based on
current forecasts, we expect production sales of Pennsaid 2% to
Horizon to increase significantly to be more in-line with
prescriptions dispensed and to provide additional cash flow to the
Company's operations."
Table of Selected Financial Results
For further
details on the results, please refer to the Management, Discussion
and Analysis (MD&A) and Consolidated Financial Statements which
are available on the Company's website (www.nuvoresearch.com).
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
2015
|
|
June 30,
2014
|
|
Change
|
|
June
30,
2015
|
|
June 30,
2014
|
|
Change
|
(Canadian dollars
in thousands,
except gross margin, per share and share figures)
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
Product
Sales
|
|
2,914
|
|
2,205
|
|
709
|
|
6,817
|
|
3,361
|
|
3,456
|
Gross Margin % on
Product Sales
|
|
35%
|
|
32%
|
|
3%
|
|
35%
|
|
19%
|
|
16%
|
Other
Revenue
|
|
332
|
|
1,658
|
|
(1,326)
|
|
976
|
|
3,259
|
|
(2,283)
|
Operating
Expenses
|
|
9,189
|
|
6,034
|
|
3,155
|
|
14,273
|
|
11,677
|
|
2,596
|
Net loss
|
|
(5,952)
|
|
(2,307)
|
|
(3,645)
|
|
(6,222)
|
|
(5,050)
|
|
(1,172)
|
Per share – basic and
diluted
|
|
(0.55)
|
|
(0.23)
|
|
(0.32)
|
|
(0.57)
|
|
(0.53)
|
|
(0.04)
|
Q2 Financial Highlights
Product sales, which represent the Company's sales of Pennsaid
2%, Pennsaid, WF10 and HLT bulk to its licensees and distributors,
were $2.9 million for the three
months ended June 30, 2015 compared
to $2.2 million for the three months
ended June 30, 2014. The
increase in product sales was primarily related to higher product
sales of Pennsaid 2% to Horizon, slightly offset by lower Pennsaid
product sales. Product sales of Pennsaid 2% were $2.1 million for the three months ended
June 30, 2015 compared to
$0.4 million for the three months
ended June 30, 2014. Total
product sales for the six months ended June
30, 2015 were $6.8 million
compared to $3.4 million in the
comparative period.
Other revenue, consisting of royalties, license fee revenue and
research and other contract revenue for the three months ended
June 30, 2015 was $0.3 million compared to $1.7 million for the three months ended
June 30, 2014. The decrease in
other revenue was primarily related to a decrease in royalty
revenues as the Company no longer receives a royalty on Pennsaid 2%
net sales in the U.S. Other revenue for the six months ended
June 30, 2015 was $1.0 million compared to $3.3 million in the comparative period.
Total operating expenses for the three months ended June 30, 2015 increased to $9.2 million versus $6.0
million for the three months ended June 30, 2014. The increase in total
operating expenses related to higher cost of goods sold (COGS) due
to an increase in product sales and higher research and development
expenses (R&D) due to costs incurred on the Company's clinical
studies, partially offset by net interest income. Total operating
expenses for the six months ended June 30,
2015 increased to $14.3
million from $11.7 million in
the comparative period.
COGS for the three months ended June 30,
2015 was $1.9 million compared
to $1.5 million for the three months
ended June 30, 2014. The
increase in COGS in the quarter was associated with increased
Pennsaid 2% product sales. The increase in product sales
improved the gross margin to $1.0
million or 35% for the three months ended June 30, 2015 compared to a gross margin of
$0.7 million or 32% for the three
months ended June 30, 2014. For
the six months ended June 30, 2015,
COGS was $4.5 million compared to
$2.7 million in the comparative
period. Gross margin on product sales for the six months
ended June 30, 2015 increased by
$1.7 million to $2.4 million or 35% compared to $0.7 million or 19% for the six months ended
June 30, 2014.
R&D expenses increased to $4.3
million for the three months ended June 30, 2015 compared to $1.5 million for the three months ended
June 30, 2014. In the current
quarter, the increase related to the costs incurred for the Phase 2
trial using WF10 for the treatment of allergic rhinitis and the
Pennsaid 2% Phase 3 trial for the treatment of acute pain.
For the six months ended June 30,
2015, R&D expenses increased to $6.3 million compared to $3.4 million for the six months ended
June 30, 2014.
General and administrative (G&A) expenses increased to
$3.1 million for the three months
ended June 30, 2015 compared to
$2.9 million for the three months
ended June 30, 2014. The
increase in the quarter related to a $1.0
million increase in stock-based compensation (SBC) primarily
from the revaluation of cash settled SBC to market value, offset by
a decrease in professional fees related to the Company's litigation
with Mallinckrodt in the comparative
period. G&A expenses for the six months ended
June 30, 2015 were $3.7 million compared to $5.3 million for the six months ended
June 30, 2014.
Net loss was $6.0 million for the
three months ended June 30, 2015
compared to $2.3 million for the
three months ended June 30,
2014. The increased net loss was attributable to lower
royalty revenue and increased R&D expenditures of which
$3.0 million related to the WF10
Phase 2 trial and the Pennsaid 2% Phase 3 trial, partially offset
by a $0.3 million increase in gross
margin from product sales and net interest income compared to net
interest expense in the comparative period. Net loss was
$6.2 million for the six months ended
June 30, 2015 compared to
$5.1 million for the six months ended
June 30, 2014.
Cash and short-term investments were $51.8 million at June 30,
2015, a decrease of $6.5
million compared to $58.3
million at December 31,
2014. The cash burn of $6.5
million includes R&D expenses of $4.3 million, of which $2.3 million was external spending on the WF10
Phase 2 trial and the Pennsaid 2% Phase 3 trial. The Company
believes that the cash burn in the second half of the year, which
will include approximately $4.2
million of external R&D spending, will be consistent to
that experienced in the first half of 2015, as we complete the
trials for WF10 and Pennsaid 2%.
The number of common shares outstanding as at June 30, 2015 was 10,916,017.
About Nuvo Research Inc.
Nuvo (TSX:NRI) is a specialty
pharmaceutical company with a diverse portfolio of products and
technologies. The Company operates two distinct business units: the
Topical Products and Technology (TPT) Group and the Immunology
Group. The TPT Group currently has four commercial products,
a pipeline of topical and transdermal products focusing on pain and
dermatology and multiple drug delivery platforms that support the
development of patented formulations that can deliver actives into
or through the skin. The Immunology Group has two commercial
products and an immune system modulation platform that supports the
development of drug products that modulate chronic inflammation
processes resulting in a therapeutic benefit. For additional
company information visit www.nuvoresearch.com.
Forward-Looking Statements
Certain statements in
this press release constitute forward-looking statements within the
meaning of applicable securities laws. Forward-looking
statements include, but are not limited to statements concerning
the Company's future objectives, strategies to achieve those
objectives, as well as statements with respect to management's
beliefs, plans, estimates, and intentions, and similar statements
concerning anticipated future events, results, circumstances,
performance or expectations that are not historical facts.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "outlook", "objective",
"may", "will", "expect", "intend", "estimate", "anticipate",
"believe", "should", "plans" or "continue", or similar expressions
suggesting future outcomes or events. Such forward-looking
statements reflect management's current beliefs and are based on
information currently available to management.
Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
contemplated by such statements. Factors that could cause
such differences include general business and economic
uncertainties and adverse market conditions as well as other risk
factors included in the Company's Annual Information Form dated
February 19, 2015 under the heading
"Risks Factors" and as described from time to time in the reports
and disclosure documents filed by the Company with Canadian
securities regulatory agencies and commissions. This list is
not exhaustive of the factors that may impact the Company's
forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on
the Company's forward-looking statements. As a result of the
foregoing and other factors, no assurance can be given as to any
such future results, levels of activity or achievements and neither
the Company nor any other person assumes responsibility for the
accuracy and completeness of these forward-looking
statements. The factors underlying current expectations are
dynamic and subject to change. Although the forward-looking
information contained in this press release is based upon what
management believes are reasonable assumptions, there can be no
assurance that actual results will be consistent with these
forward-looking statements. All forward-looking statements in
this press release are qualified by these cautionary
statements. The forward-looking statements contained herein
are made as of the date of this press release and except as
required by applicable law, the Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
SOURCE Nuvo Research Inc.