MISSISSAUGA, ON, Feb. 19, 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 fourth quarter and year
ended December 31, 2014.
Fourth Quarter and Recent Corporate
Developments:
WF10™
- In January, the Company announced topline results of its Phase
2 clinical trial to investigate the safety and efficacy of WF10 in
patients with refractory allergic rhinitis. As expected, the
WF10 arm reduced allergy symptoms as evidenced by recorded patient
Total Nasal Symptom Scores (TNSS). The placebo arm
demonstrated an unexpected reduction in patient TNSS scores that
was not only greater than the placebo arm in the Company's 2010
Phase 2 proof-of-concept clinical study, but also lasted much
longer. While the WF10 arm and the 2 separate arms that included
constituent elements of WF10 all performed better than placebo, the
differences were not statistically significant.
The Company is continuing to conduct a detailed review of the data
with its external experts and expects to release further
information and analysis of the trial, including information on
secondary endpoints, when the analysis is completed.
Pennsaid® 2%
- In October, the Company sold its Pennsaid 2% U.S. rights to
Horizon Pharma plc (Horizon) for US$45.0
million. The Company will manufacture Pennsaid 2% for
Horizon pursuant to a long-term supply agreement. Horizon launched
the sale and marketing of Pennsaid 2% in January 2015;
- In November, the Company announced its plans 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 Company anticipates the trial may commence in Q2
2015, subject to German regulatory approval. The Company
anticipates results could be available in Q4 2015; and
- In November, the Company reacquired from Paladin Labs Inc.
(Paladin) the rights to market Pennsaid 2% in South America, Central America, South Africa and Israel. As consideration for these rights, the
Company provided its authorization to Paladin to market, sell and
distribute an authorized generic version of Pennsaid in
Canada.
Paladin Loan Repayment
- In October, the Company paid $3.7
million to Paladin in full repayment of its outstanding
loan. All obligations of the Company were satisfied and all
security was released and discharged.
Table of Selected Financial Results
For further
details on the results, please refer to Nuvo's Management,
Discussion and Analysis (MD&A) and Consolidated Financial
Statements which are available on the Company's website
(www.nuvoresearch.com).
|
Three months
ended
|
Year
ended
|
|
December
31,
2014
|
December
31,
2013
|
Change
|
December
31,
2014
|
December
31,
2013
|
Change
|
(Canadian dollars
in millions)
|
$
|
$
|
$
|
$
|
$
|
$
|
Revenue
|
3.4
|
3.7
|
(0.3)
|
13.1
|
18.4
|
(5.3)
|
Operating
Expenses
|
8.7
|
5.8
|
2.9
|
27.1
|
22.5
|
4.6
|
Net income
(loss)
|
(6.1)
|
(1.9)
|
(4.2)
|
38.6
|
(10.4)
|
49.0
|
Per share -
basic
|
(0.58)
|
(0.22)
|
|
3.85
|
(1.17)
|
|
Per share -
diluted
|
(0.56)
|
(0.22)
|
|
3.76
|
(1.17)
|
|
Q4 Financial Highlights
Revenue, consisting of product
sales, royalties, license fee revenue and research and other
contract revenue for the three months ended December 31, 2014 was $3.4
million compared to $3.7
million for the three months ended December 31, 2013. The decrease in revenue
was attributable to lower royalty revenue primarily from Pennsaid
and Pennsaid 2% net sales in the U.S. market. The decrease in
royalty revenue was partially offset by an increase in product
sales to Horizon to prepare for their launch of Pennsaid 2% in
January 2015. Total revenue for the year was $13.1 million compared to $18.4 million in the comparative period.
Total operating expenses for the three months ended December 31, 2014 increased to $8.7 million versus $5.8
million for the three months ended December 31, 2013. The increase in
operating expenses was primarily due to an increase in share-based
compensation (SBC) expenses of $2.8
million in the quarter. Total operating expenses for
the year ended December 31, 2014 were
$27.1 million compared to
$22.5 million for the year ended
December 31, 2013.
Cost of goods sold (COGS) for the three months ended
December 31, 2014 was $1.6 million compared to $1.2 million for the three months ended
December 31, 2013. The increase
in COGS was primarily related to the increase in product sales to
our partners and distributors. For the year ended
December 31, 2014, COGS increased to
$5.5 million compared to $4.8 million for the year ended December 31, 2013.
Research and development (R&D) expenses increased to
$2.8 million for the three months
ended December 31, 2014 compared to
$1.9 million for the three months
ended December 31, 2013. The
increase in the quarter was primarily attributable to increased
drug development spending related to the Company's Phase 2 clinical
trial using WF10 as a treatment for allergic rhinitis.
R&D expenses were $8.1 million
for the year ended December 31, 2014
compared to $7.0 million for the year
ended December 31, 2013.
General and administrative (G&A) expenses increased to
$4.3 million for the three months
ended December 31, 2014 compared to
$2.5 million for the three months
ended December 31, 2013. The
increase in the quarter was primarily related to increased SBC
expense. G&A expenses increased to $13.0 million for the year ended December 31, 2014 compared to $9.5 million for the year ended December 31, 2013.
Other expenses were $0.8 million
for the three months ended December 31,
2014 which included an impairment charge of $1.7 million on intangible assets that was
partially offset by a $0.5 million
foreign exchange gain and a gain of $0.3
million related to the sale of unused land at the Company's
manufacturing site in Varennes,
Québec. In the comparative period, the Company recognized
other income of $0.2 million
primarily related to a foreign exchange gain. For the year
ended December 31, 2014, other income
was $52.6 million, which included the
$52.3 million gain on the litigation
settlement, compared to other expenses of $6.2 million for the year ended December 31, 2013.
Cash was $48.3 million at
December 31, 2014, an increase of
$35.7 million compared to
$12.6 million at December 31, 2013. In the three months
ended December 31 2014, the Company
received US$10.0 million
(CDN$11.2 million) from its
litigation settlement with Mallinckrodt
and US$45.0 million (CDN$50.4 million) from the Pennsaid 2% U.S. Asset
Sale. In addition, the Company invested $10.0 million in short-term investments.
The Company had $58.3 million in cash
and short-term investments at December 31,
2014.
Cash provided by operating activities was $7.3 million for the three months ended
December 31, 2014 compared to cash
used in operating activities of $1.7
million for the three months ended December 31, 2013. The increase in cash
used in operations was offset by a significant recovery of non-cash
working capital in the quarter from the receipt of the US$10 million litigation settlement
proceeds. For the year ended December
31, 2014, cash provided by operating activities was
$2.6 million compared to cash used in
operating activities of $1.7 million
for the year ended December 31,
2013.
Net cash provided by investing activities totaled $33.9 million for the three months ended
December 31, 2014 compared to net
cash used in investing activities of $40,000 for the three months ended December 31, 2013. Cash provided by
investing activities related to the net proceeds of $43.6 million received from the sale of Pennsaid
2% for the U.S. market to Horizon. These proceeds were
partially offset by an investment of $10.0
million in short-term investments. For the year ended
December 31, 2014, net cash provided
by investing activities totaled $33.7
million compared to net cash used in investing activities of
$0.2 million for the year ended
December 31, 2013.
Net cash used in financing activities totaled $2.6 million for the three months ended
December 31, 2014 compared to
$0.5 million for the three months
ended December 31, 2013. In the
fourth quarter of 2014, the Company paid $3.7 million to settle the outstanding loan with
Paladin. In addition, the Company received $0.9 million in proceeds from the exercise of
warrants. In the comparative period, net cash used in
financing activities related to repayments of other obligations.
For the year ended December 31,
2014, net cash used in financing activities totaled
$0.8 million compared to net cash
provided by financing activities of $2.2
million for the year ended December
31, 2013.
The number of common shares outstanding as at December 31, 2014 was 10,774,757.
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, a development program for the treatment of allergic
rhinitis and an immune system modulation platform that has the
potential to support treatments for a broad range of immune system
related disorders. 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.