MISSISSAUGA,
ON, April 30, 2014 /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 first quarter ended March 31,
2014.
First Quarter and Recent Corporate
Developments:
Pennsaid® 2%
- The U.S. Food and Drug Administration (FDA) approved the sale
and marketing of Pennsaid 2% in the U.S. on January 16 and the Company's U.S. licensee
Mallinckrodt, Inc. launched the product
on February 10;
Pliaglis
- The Company's global marketing partner, Galderma Pharma S.A
(Galderma), hired a small sales force to market and sell Pliaglis
in the U.S.;
- Galderma launched Pliaglis in Brazil in March;
Pipeline
- In March, the Company commenced enrolment of participants in
the confirmatory WF10™ Phase 2 clinical trial for the treatment of
allergic rhinitis being conducted in Germany;
- Entered into a collaboration with Ferndale Laboratories, Inc.
(Ferndale) and a leading Contract Research Organization to develop
two topical dermatology products based on Nuvo's patented
Multiplexed Molecular Penetration Enhancer (MMPE™) technology;
and
Capital Markets
- Raised $3.1 million in a
non-brokered private placement issuing 1,390,000 units at a price
of $2.25 per unit. Each unit
consists of one common share and one-half of one common share
purchase warrant of the Company exercisable at $3.00.
Financial Results
Revenue, consisting
of product sales, royalties, license fee revenue and research and
other contract revenue for the three months ended March 31, 2014 was $2.8
million compared to $2.3
million for the three months ended March 31, 2013. This increase was
attributable to increased product sales as Pennsaid 2% was approved
and launched by Mallinckrodt in the
U.S.
Total operating expenses increased to
$5.6 million for the three months
ended March 31, 2014 compared to
$5.4 million for the three months
ended March 31, 2013, mainly due to
an increase in cost of goods sold (COGS) related to the increase in
product revenues in the quarter.
COGS for the three months ended March 31, 2014 increased to $1.2 million in the quarter versus $1.0 million in the comparative period due to
increased Pennsaid and Pennsaid 2% product sales.
Research and development (R&D) expenses were
consistent at $1.9 million for the
three months ended March 31, 2014 and
March 31, 2013. The savings the
Company realized from centralizing R&D at its Québec facility
in 2013 was offset by an increase in spending related to the
confirmatory WF10 Phase 2 clinical trial.
General and administrative (G&A) expenses
were $2.4 million for the three
months ended March 31, 2014 compared
to $2.3 million for the three months
ended March 31, 2013. The
increase in the quarter related to an increase in non-cash charges
which includes stock based compensation and amortization, partially
offset by the realized cost savings associated with closing the
Company's facilities in Salt Lake City,
Utah and West Chester,
Pennsylvania in 2013.
Net loss for the three months ended March 31, 2014 was $2.7
million compared to $3.3
million for the three months ended March 31, 2013. The decrease in net loss
was primarily attributable to improved margins related to higher
revenue slightly offset by increased interest expense.
Cash and cash equivalents were $14.2 million as at March
31, 2014, an increase of $1.6
million compared to $12.6
million as at December 31,
2013, primarily as a result of proceeds from the Company's
Private Placement.
Cash used in operating activities for the three
months ended March 31, 2014 was
$0.9 million compared to $1.7 million for the three months ended
March 31, 2013. The improvement
primarily related to a decrease in net loss and a recovery of
working capital due to the receipt of the US$2.0 million milestone payment from
Galderma.
Net cash provided by in financing activities
totaled $2.4 million for the three
months ended March 31, 2014 compared
to net cash used in financing activities of $0.4 million for the three months ended
March 31, 2013. In the three
months ended March 31, 2014, the
Company raised $2.9 million net of
financing fees through the private placement. During both
periods, the Company made repayments on finance, lease and other
obligations.
The number of common shares outstanding as at
March 31, 2014 was 10,239,619.
Pennsaid and Pennsaid 2% in the U.S.
In
the U.S., according to IMS data, a provider of dispensed
prescription data, approximately 6,000 Pennsaid 2% prescriptions
were dispensed in the first quarter of 2014 with approximately 1.31
bottles of Pennsaid 2% dispensed for each prescription. On
February 10, 2014, Pennsaid 2% was
launched in the U.S. In the first quarter of 2014,
approximately 24,000 Pennsaid prescriptions were dispensed, a
decrease of 44% from the 43,000 dispensed in the first quarter of
2013, partially due to the launch of Pennsaid 2%. For each
prescription, approximately 1.27 bottles of Pennsaid were dispensed
in the first quarter of 2014.
About Nuvo Research Inc.
Nuvo (TSX:NRI)
is a specialty pharmaceutical company focused on improving
patient's lives by developing and commercializing innovative
products that address unmet medical needs. The Company has a
diverse portfolio of products in the areas of topical pain and
immunology.
Nuvo's marketed products include Pennsaid (a
topical treatment for the signs and symptoms of osteoarthritis of
the knee), Pennsaid 2% (a topical treatment for the pain of
osteoarthritis of the knee), Pliaglis (a topical local anesthetic)
and the heated lidocaine/tetracaine patch (HLT Patch).
Forward-Looking Statements
Certain
statements in this news release constitute forward-looking
statements within the meaning of applicable securities laws.
Forward-looking statements include, but are not limited to the
Company's anticipated use of proceeds from the Private Placement,
the Company's future share price and the Company's possible
election to accelerate the expiry date of any of the warrants or
the brokers warrants 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 20, 2014 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
news 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 news release are qualified by
these cautionary statements. The forward-looking statements
contained herein are made as of the date of this news 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.
NUVO RESEARCH
INC.
CONSOLIDATED
INTERIM STATEMENTS OF FINANCIAL POSITION
|
Unaudited
|
|
As at March
31,
2014
|
As at December
31,
2013
|
(Canadian dollars
in thousands)
|
|
$
|
$
|
ASSETS
|
|
|
|
CURRENT
|
|
|
|
Cash and cash
equivalents
|
|
14,221
|
12,621
|
Accounts
receivable
|
|
2,228
|
4,189
|
Inventories
|
|
1,455
|
990
|
Other current
assets
|
|
758
|
541
|
TOTAL CURRENT
ASSETS
|
|
18,662
|
18,341
|
|
|
|
|
Property, plant and
equipment
|
|
1,372
|
1,411
|
Intangible
assets
|
|
1,855
|
1,869
|
TOTAL
ASSETS
|
|
21,889
|
21,621
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
|
|
|
|
Accounts payable and
accrued liabilities
|
|
4,365
|
3,925
|
Current portion of
finance lease and other obligations
|
|
2,143
|
2,114
|
Current portion of
deferred revenue
|
|
-
|
57
|
TOTAL CURRENT
LIABILITIES
|
|
6,508
|
6,096
|
Finance lease and
other obligations
|
|
2,900
|
3,327
|
TOTAL
LIABILITIES
|
|
9,408
|
9,423
|
|
|
|
|
EQUITY
|
|
|
|
Common
shares
|
|
231,650
|
229,068
|
Contributed
surplus
|
|
13,930
|
13,573
|
Accumulated other
comprehensive income (AOCI)
|
|
1,173
|
1,086
|
Deficit
|
|
(234,272)
|
(231,529)
|
TOTAL
EQUITY
|
|
12,481
|
12,198
|
TOTAL LIABILITIES
AND EQUITY
|
|
21,889
|
21,621
|
NUVO RESEARCH
INC.
CONSOLIDATED
INTERIM STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
|
Unaudited
|
|
Three Months
Ended
March 31, 2014
|
Three Months
Ended
March 31, 2013
|
(Canadian dollars
in thousands,
except per share and share figures)
|
|
$
|
$
|
REVENUE
|
|
|
|
Product
sales
|
|
1,156
|
604
|
Royalties
|
|
1,397
|
1,384
|
Research and other
contract revenue
|
|
147
|
178
|
Licensing
fees
|
|
57
|
85
|
Total
revenue
|
|
2,757
|
2,251
|
OPERATING
EXPENSES
|
|
|
|
Cost of goods
sold
|
|
1,209
|
972
|
Research and
development expenses
|
|
1,887
|
1,872
|
General and
administrative expenses
|
|
2,373
|
2,293
|
Sales and marketing
expenses
|
|
-
|
177
|
Interest
expense
|
|
195
|
112
|
Interest
income
|
|
(21)
|
(10)
|
Total operating
expenses
|
|
5,643
|
5,416
|
OTHER EXPENSES
(INCOME)
|
|
|
|
Foreign currency loss
(gain)
|
|
(164)
|
77
|
Net loss before
income taxes
|
|
(2,722)
|
(3,242)
|
Income
taxes
|
|
21
|
28
|
NET
LOSS
|
|
(2,743)
|
(3,270)
|
Other
comprehensive income (loss) to be reclassified to net income (loss)
in subsequent periods
|
|
|
|
Unrealized gains on
translation of foreign operations
|
|
87
|
318
|
TOTAL
COMPREHENSIVE LOSS
|
|
(2,656)
|
(2,952)
|
Net loss per
common share –
|
|
|
|
Basic and
diluted
|
|
$(0.31)
|
$(0.37)
|
Average number of
common shares outstanding
(in
thousands)
|
|
|
|
basic and
diluted
|
|
8,865
|
8,807
|
NUVO RESEARCH
INC.
CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOWS
|
Unaudited
|
|
Three Months
Ended
March 31,
2014
|
Three Months
Ended
March 31, 2013
|
(Canadian dollars
in thousands)
|
|
$
|
$
|
OPERATING
ACTIVITIES
|
|
|
|
Net loss
|
|
(2,743)
|
(3,270)
|
Items not involving
current cash flows:
|
|
|
|
|
Depreciation and
amortization
|
|
184
|
248
|
|
Deferred license
revenue recognized
|
|
(57)
|
(85)
|
|
Stock-based
compensation
|
|
547
|
140
|
|
Unrealized foreign
exchange loss (gain)
|
|
(213)
|
148
|
|
Inventory
write-down
|
|
23
|
-
|
|
Interest and
accretion of long-term other obligations
|
|
17
|
17
|
|
Other
|
|
28
|
(5)
|
|
|
(2,214)
|
(2,807)
|
Net change in
non-cash working capital
|
|
1,314
|
1,085
|
CASH USED IN
OPERATING ACTIVITIES
|
|
(900)
|
(1,722)
|
INVESTING
ACTIVITIES
|
|
|
|
Acquisition of
property, plant and equipment
|
|
(55)
|
(35)
|
CASH USED IN
INVESTING ACTIVITIES
|
|
(55)
|
(35)
|
FINANCING
ACTIVITIES
|
|
|
|
Issuance of common
shares
|
|
2,863
|
-
|
Repayment of finance
lease and other obligations
|
|
(429)
|
(381)
|
CASH PROVIDED BY
(USED IN) FINANCING ACTIVITIES
|
|
2,434
|
(381)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
121
|
(19)
|
Net change in cash
and cash equivalents during the period
|
|
1,600
|
(2,157)
|
Cash and cash
equivalents, beginning of period
|
|
12,621
|
12,149
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
|
14,221
|
9,992
|
|
|
|
|
Interest
paid
|
|
184
|
100
|
Interest
received
|
|
23
|
5
|
Income taxes
paid
|
|
35
|
20
|
SOURCE Nuvo Research Inc.