Navidea Biopharmaceuticals, Inc. (NYSE MKT:NAVB), today
announced financial results for the second quarter of 2016. Navidea
reported total revenue for the second quarter of 2016 of $5.4
million, including Lymphoseek® (technetium Tc 99m
tilmanocept) injection sales revenue of $4.2 million. The net
loss from operations was $580,000 and the net loss attributable to
common stockholders was $6.7 million.
"Despite the significant disruption in our organization during
the first half of 2016 caused by legal and financial challenges, we
remain committed to advancing our Lymphoseek commercial efforts,
expanding our Manocept™ platform to other larger immunodiagnostic
and immunotherapeutic indications, and controlling our operating
expenses” said Jed Latkin, interim Chief Operating Officer and
Chief Financial Officer at Navidea. "Despite the disruptions caused
by CRG’s (Capital Royalty Partners II L.P.) actions we are
confident that the technology we are developing and our lead
commercial product, Lymphoseek, provide Navidea and its
shareholders with significant unrealized value. Given the advanced
state of our technology, continued growth of Lymphoseek in the U.S.
and the impending launch in Europe, we believe we will be
successful in seeking a replacement financing arrangement for the
CRG debt. We believe we have significant claims for damages against
CRG that we intend to pursue. Finally our Macrophage Therapeutics
subsidiary has made great strides towards demonstrating the breadth
of the technology’s potential to develop innovative
immunotherapies.”
Specific events and milestones achieved since the beginning of
the second quarter include the following:
Commercial
- Achieved sequential quarter-on-quarter
Lymphoseek revenue growth of 12% and continued improvement in key
performance indicators;
- Reported investigator-initiated study
results demonstrating beneficial performance characteristics of
Lymphoseek and positive comparative results versus commonly-used,
non-receptor-targeted imaging agents in breast cancer presented by
Emory University School of Medicine and University of California
San Diego (UCSD) at the 2016 Society of Nuclear Medicine and
Molecular Imaging annual meeting; and
- Continued to progress our development
efforts to meet the projected Q4 launch of Lymphoseek in Europe by
our partner, Norgine BV.
Lymphoseek Lifecycle Management
- Continued market development clinical
activities with Navidea’s and investigator-initiated studies in
cervical cancer, pediatric solid tumors, anal-rectal cancer,
endometrial cancer, and for further confirmation of workflow
efficiency compared to sulfur colloid, which are supported in large
part by National Institutes of Health (NIH) grant funding; and
- Received Western Institutional Review
Board (WIRB) approval of several Lymphoseek investigational
protocols including anal-rectal cancer sentinel lymph node
detection, imaging in Kaposi sarcoma (KS) and intravenous (IV)
administration in rheumatoid arthritis (RA).
Immunodiagnostic & Immunotherapeutic
Development Pipeline
- Rheumatoid Arthritis Immunodiagnostic
Indication
- Received IRB approval at University of
California, San Francisco and from WIRB for the RA subcutaneous
administration clinical trial protocol;
- Expect patient enrollment in the
subcutaneous injection trial to begin shortly;
- Awarded Part 2 grant funding of $1.1
million from our previously announced RA grant;
- Completed cardiovascular disease
imaging study with Massachusetts General Hospital, manuscripts
being prepared for publication;
- Expect to begin grant-funded Phase 1/2
evaluation of Lymphoseek - IV in KS patients in the second half of
2016;
- Received $1.8 million grant to support
the development of Manocept immunotherapeutic program in KS;
and
- Successfully completed a number of
preclinical studies of Manocept in animal models of nonalcoholic
steatohepatitis (NASH), arthritis, asthma, neuro-inflammation and
tumor-associated macrophage (TAM) depletion in two cancer models.
Both MT1000 class and MT2000 class molecules demonstrated their
predicted activity in animal testing.
Operational & Financial
- Reduced cash used in operations by over
87% for the first half of 2016 compared to the first half of 2015;
and
- Continued partnering/divestiture
efforts for the Company’s investigational imaging agent, NAV4694,
for the detection of amyloid plaques in Alzheimer’s disease.
CRG litigation update
As previously reported, on April 7, 2016, Navidea received a
notice from CRG pursuant to the Term Loan Agreement, dated May 8,
2015 which claimed that certain Events of Default, unrelated to
repayment terms, had occurred under the Loan Agreement. CRG
commenced a state court action in Harris County, Texas District
Court against the Company on that same date. By letter dated May
31, 2016, CRG declared all of the Company’s obligations under the
Loan Agreement and all other loan documents to be immediately due
and payable in the amount of $56,157,240.69. The Company disputes
the total amount claimed to be due and owing, and contends CRG’s
acceleration of the maturity of the loan was improper. On July 13,
2016, a hearing was held in the District Court of Harris County,
Texas with respect to CRG’s application for a temporary injunction
seeking to restrain Navidea from operating or using new accounts
without having first entered into a blocked account control and/or
pledge collateral account control agreement with CRG for any such
new account. At the conclusion of the temporary injunction hearing,
the Court ordered the parties to mediation and stayed any ruling on
CRG’s request for injunctive relief until after mediation has been
completed. The parties participated in a mediation on July 20,
2016, but did not reach a settlement. The district judge in the
Texas case has since recused herself from the case, and the case
has been reassigned to a different Harris County District Court.
The district court did not issue a ruling on the application for
temporary injunction prior to the judge’s recusal from the case,
and no hearing or other matter is currently set in the Texas court
case.
Concurrently with the Texas court case, CRG previously sent a
notice to Cardinal Health demanding that all monies owing to
Navidea be sent directly to CRG. In response, Cardinal filed an
interpleader action in Ohio, pursuant to which the Ohio court
initially ruled that 50% of the monies should be sent to Navidea,
and 50% should be placed into the registry of the Court pending a
determination of the parties’ rights to the funds. The court has
since ruled that 75% of the Cardinal payments should be sent to
Navidea and 25% should be deposited into the registry of the court
up until the deposit in the registry of the court equals $1
million, which will serve as a bond pending a determination on the
merits of the case, and then Navidea will receive 100% of the
Cardinal payments pending further order by the Court in the Ohio
case.
The Company reiterates its firmly-held position that the alleged
claims by CRG do not constitute Events of Default under the Loan
Agreement and will vigorously defend against such claims. The
Company also contends CRG’s wrongful conduct has caused harm to the
Company and it will pursue its counterclaims against CRG seeking
all remedies and other relief it may be entitled to under the
law.
The Company is also continuing to explore alternative financing
arrangements in order to refinance the CRG debt. The Company
believes that the actions of CRG are a violation of the Loan
Agreement and, as a result, CRG is in breach of the Loan Agreement,
not the Company. The Company believes that its best course of
action is to refinance the CRG debt and pursue its claims for
damages.
Financials
Total revenues for the quarter ended June 30, 2016 were $5.4
million compared to $2.9 million in the second quarter of last
year. Second quarter 2016 product revenues recognized from the sale
of Lymphoseek were $4.2 million, compared to $3.8 million in the
first quarter of 2016 and $2.0 million in the second quarter of
2015. During the second quarter of 2016, the Company also reported
$1.2 million in grant, licensing and other revenue. For the six
months ended June 30, 2016, Navidea’s total revenue was $10.1
million compared to $5.0 million for the same period in 2015, an
increase of 103%. The primary driver of this increase was revenues
recognized from the sale of Lymphoseek which exceeded $8.0 million
for the six months ended June 30, 2016 compared to $3.8 million for
the same period last year.
Gross margins on Lymphoseek product sales grew to 87% for the
second quarter of 2016 compared to 83% for the second quarter of
2015, primarily due to inventory written off in 2015 related to a
production issue.
Research and development (R&D) expenses for the second
quarter of 2016 were $2.5 million, compared to $2.3 million in the
second quarter of last year. R&D expenses were $5.2 million for
the six months ended June 30, 2016 compared to $6.3 million in the
same period of 2015. The net decreases in year-to-date R&D
expenses were primarily a result of decreased headcount costs
coupled with decreased project costs related to the Company’s neuro
assets, offset by increased project costs related to the Company’s
Manocept and Lymphoseek programs. Selling, general and
administrative (SG&A) expenses for the second quarter of 2016
were $2.9 million, compared to $4.0 million in the second quarter
of last year. SG&A expenses were $7.0 million for the six
months ended June 30, 2016, compared to $9.5 million for the same
period in 2015. The net decrease in year-to-date SG&A expenses
was due primarily to decreased headcount coupled with decreased
costs related to contracted medical science liaisons,
commercialization costs for Lymphoseek and NAV4694 and license
fees, offset by increases in commercial headcount costs related to
the addition of our internal sales force coupled with increased
legal and professional services. Total operating expenses were $5.4
million for the second quarter of 2016, compared to $6.3 million in
the second quarter of last year. Operating expenses were $12.2
million for the six months ended June 30, 2016, compared to $15.8
million for the same period in 2015.
Navidea’s net loss from operations for the quarter ended June
30, 2016 was $580,000 compared to $3.8 million for the same period
in 2015. For the six months ended June 30, 2016, Navidea’s net loss
from operations was $3.1 million compared to a net loss from
operations of $11.6 million for the same period in 2015. Navidea’s
net loss attributable to common stockholders for the quarter ended
June 30, 2016 was $6.7 million, or $0.04 per share, compared to
$9.7 million, or $0.06 per share, for the same period in 2015. For
the six months ended June 30, 2016, Navidea’s net loss attributable
to common stockholders was $10.4 million, or $0.07 per share,
compared to a net loss attributable to common stockholders of $17.0
million, or $0.11 per share, for the same period in 2015. Net
losses attributable to common stockholders include fees paid to CRG
(which the Company is disputing in court), the interest expense on
our outstanding debt, as well as significant non-cash charges. For
the six-month periods ended June 30, 2016 and June 30, 2015, net
loss attributable to common stockholders included $7.2 million and
$5.4 million, respectively, in interest, debt-related fees, losses
on extinguishment of debt, and changes in the fair value of
financial instruments.
Navidea ended the quarter with $1.7 million in cash, $501,000 of
which was restricted related to the CRG debt.
Conference Call Details
Investors and the public are invited to access the live audio
webcast through the link below. Participants who would like to ask
questions during the question and answer session must participate
by telephone also. Participants are encouraged to log-in and/or
dial-in fifteen minutes before the conference call begins. The
webcast replay is expected to be available on our investor website,
http://ir.navidea.com, approximately two to four hours after the
live event.
Event: Navidea Biopharmaceuticals Q2 2016 Financial
Results Conference Call Date/Time: August 4, 2016; 8:30 a.m. ET
Webcast Link:
http://edge.media-server.com/m/p/2h7aqbav
Dial-in Number – US: (855) 897-5884 Dial in Number – Int’l: (720)
634-2940 Conference ID Number: 56279154 Replay:
A webcast replay will be available on the
Investor Relations section of our website at http://ir.navidea.com
for 30 days.
About Lymphoseek
Lymphoseek® (technetium Tc 99m tilmanocept) injection is the
first and only FDA-approved receptor-targeted lymphatic mapping
agent. It is a novel, receptor-targeted, small-molecule
radiopharmaceutical used in the evaluation of lymphatic basins that
may have cancer involvement in patients. Lymphoseek is designed for
the precise identification of lymph nodes that drain from a primary
tumor, which have the highest probability of harboring cancer.
Lymphoseek is approved by the U.S. Food and Drug Administration
(FDA) for use in solid tumor cancers where lymphatic mapping is a
component of surgical management and for guiding sentinel lymph
node biopsy in patients with clinically node negative breast
cancer, melanoma or squamous cell carcinoma of the oral cavity.
Lymphoseek has also received European approval in imaging and
intraoperative detection of sentinel lymph nodes in patients with
melanoma, breast cancer or localized squamous cell carcinoma of the
oral cavity.
Accurate diagnostic evaluation of cancer is critical, as results
guide therapy decisions and determine patient prognosis and risk of
recurrence. Overall in the U.S., solid tumor cancers may represent
up to 1.2 million cases per year. The sentinel node label in the
U.S. and Europe may address approximately 600,000 new cases of
breast cancer, 160,000 new cases of melanoma and 100,000 new cases
of head and neck/oral cancer diagnosed annually.
Lymphoseek Indication and Important Safety
Information
Lymphoseek is a radioactive diagnostic agent indicated with or
without scintigraphic imaging for:
- Lymphatic mapping using a handheld
gamma counter to locate lymph nodes draining a primary tumor site
in patients with solid tumors for which this procedure is a
component of intraoperative management.
- Guiding sentinel lymph node biopsy
using a handheld gamma counter in patients with clinically node
negative squamous cell carcinoma of the oral cavity, breast cancer
or melanoma.
Important Safety Information
In clinical trials with Lymphoseek, no serious hypersensitivity
reactions were reported, however Lymphoseek may pose a risk of such
reactions due to its chemical similarity to dextran. Serious
hypersensitivity reactions have been associated with dextran and
modified forms of dextran (such as iron dextran drugs).
Prior to the administration of Lymphoseek, patients should be
asked about previous hypersensitivity reactions to drugs, in
particular dextran and modified forms of dextran. Resuscitation
equipment and trained personnel should be available at the time of
Lymphoseek administration, and patients observed for signs or
symptoms of hypersensitivity following injection.
Any radiation-emitting product may increase the risk for cancer.
Adhere to dose recommendations and ensure safe handling to minimize
the risk for excessive radiation exposure to patients or health
care workers. In clinical trials, no patients experienced serious
adverse reactions and the most common adverse reactions were
injection site irritation and/or pain (<1%).
FULL LYMPHOSEEK PRESCRIBING INFORMATION CAN BE FOUND
AT:WWW.LYMPHOSEEK.COM
About Navidea
Navidea Biopharmaceuticals, Inc. (NYSE MKT: NAVB) is a
biopharmaceutical company focused on the development and
commercialization of precision immunodiagnostic agents and
immunotherapeutics. Navidea is developing multiple
precision-targeted products and platforms including Manocept™ and
NAV4694 to help identify the sites and pathways of undetected
disease and enable better diagnostic accuracy, clinical
decision-making, targeted treatment and, ultimately, patient care.
Lymphoseek® (technetium Tc 99m tilmanocept) injection, Navidea’s
first commercial product from the Manocept platform, was approved
by the FDA in March 2013 and in Europe in November 2014. The
development activities of the Manocept immunotherapeutic platform
will be conducted by Navidea in conjunction with its subsidiary,
Macrophage Therapeutics. Navidea’s strategy is to deliver superior
growth and shareholder return by bringing to market novel products
and advancing the Company’s pipeline through global partnering and
commercialization efforts. For more information, please visit
www.navidea.com.
The Private Securities Litigation Reform Act of 1995 (the Act)
provides a safe harbor for forward-looking statements made by or on
behalf of the Company. Statements in this news release, which
relate to other than strictly historical facts, such as statements
about the Company’s plans and strategies, expectations for future
financial performance, new and existing products and technologies,
anticipated clinical and regulatory pathways, and markets for the
Company’s products are forward-looking statements within the
meaning of the Act. The words “believe,” “expect,” “anticipate,”
“estimate,” “project,” and similar expressions identify
forward-looking statements that speak only as of the date hereof.
Investors are cautioned that such statements involve risks and
uncertainties that could cause actual results to differ materially
from historical or anticipated results due to many factors
including, but not limited to, the Company’s continuing operating
losses, uncertainty of market acceptance of its products, our
ability to repay our debt, the outcome of the CRG litigation,
reliance on third party manufacturers, accumulated deficit, future
capital needs, uncertainty of capital funding, dependence on
limited product line and distribution channels, competition,
limited marketing and manufacturing experience, risks of
development of new products, regulatory risks and other risks
detailed in the Company’s most recent Annual Report on Form 10-K
and other Securities and Exchange Commission filings. The Company
undertakes no obligation to publicly update or revise any
forward-looking The Company undertakes no obligation to publicly
update or revise any forward-looking statements.
FINANCIAL TABLES TO FOLLOW
NAVIDEA BIOPHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS June 30,
December 31, 2016 2015 (unaudited) Assets: Cash $ 1,155,641
$ 7,166,260 Restricted cash 500,997 - Other current assets
5,200,144 5,410,914 Non-current assets 1,825,367
2,387,339 Total assets $ 8,682,149 $ 14,964,513 Liabilities
and stockholders' deficit: Deferred revenue, current $ 681,704 $
1,044,281 Notes payable, current 51,652,209 333,333 Other current
liabilities 10,058,459 4,806,236 Deferred revenue 26,061 192,728
Notes payable, net of discount 9,519,779 60,746,002 Other
liabilities 650,931 1,677,633 Total liabilities
72,589,143 68,800,213 Navidea stockholders' deficit
(64,376,195) (54,305,258) Noncontrolling interest 469,201
469,558 Total stockholders' deficit (63,906,994)
(53,835,700) Total liabilities and stockholders' deficit $
8,682,149 $ 14,964,513
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three
Months Ended Six Months Ended June 30, June 30, June 30, June 30,
2016 2015 2016 2015 (unaudited) (unaudited) (unaudited) (unaudited)
Revenue: Lymphoseek sales revenue $ 4,231,719 $ 1,963,548 $
8,014,399 $ 3,798,970 Lymphoseek license revenue 245,950 250,000
500,000 333,333 Grant and other revenue 916,811
654,360 1,602,636 844,061 Total revenue
5,394,480 2,867,908 10,117,035 4,976,364 Cost
of goods sold 560,740 332,730 1,095,669
781,787 Gross profit 4,833,740 2,535,178
9,021,366 4,194,577 Operating expenses: Research and
development 2,525,581 2,297,074 5,185,101 6,278,362 Selling,
general and administrative 2,888,141 4,048,799
6,984,801 9,542,967 Total operating expenses
5,413,722 6,345,873 12,169,902 15,821,329 Loss
from operations (579,982) (3,810,695)
(3,148,536) (11,626,752) Interest expense, net (7,528,475)
(1,575,741) (9,721,998) (2,542,317) Equity in the loss of joint
venture (2,920) (6,205) (15,159) (268,432) Loss on disposal of
joint venture (39,732) - (39,732) - Change in fair value of
financial instruments 1,469,928 (1,852,730) 2,595,287 (125,627)
Loss on extinguishment of debt - (2,440,714) - (2,440,714) Other
income (expense), net (126) (4,834) (37,418)
21,698 Net loss (6,681,307) (9,690,919) (10,367,556)
(16,982,144) Net loss attributable to noncontrolling interest (116)
(241) (357) (341) Deemed dividend on beneficial conversion feature
- - - (46,000) Net loss attributable to
common stockholders $ (6,681,191) $ (9,690,678) $ (10,367,199) $
(17,027,803) Loss per common share (basic and diluted) $
(0.04) $ (0.06) $ (0.07) $ (0.11) Weighted average shares
outstanding (basic and diluted) 155,382,368 150,107,148 155,346,231
149,951,603
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160804005439/en/
Navidea BiopharmaceuticalsInvestors &
MediaSharon Correia, 978-655-2686Senior Director, Corporate
Communications
Navidea Biopharmaceuticals (AMEX:NAVB)
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