- Q2 net income increases to $2.5 million or $0.22 basic earnings per share
-
- Positive cash from operating activities of
$2.1 million in the quarter
-
- Nuvo to Host Conference Call/Audio
Webcast August 11th at
8:00 a.m. ET -
MISSISSAUGA, ON, Aug. 10, 2016 /CNW/ - Nuvo Pharmaceuticals Inc.
(Nuvo or the Company) (TSX:NRI), formerly Nuvo Research Inc., a
commercial healthcare company with a portfolio of commercial
products and pharmaceutical manufacturing capabilities, today
announced its financial and operational results for the second
quarter ended June 30, 2016.
For further details on the results, please refer to Nuvo's
Management, Discussion and Analysis (MD&A) and Condensed
Consolidated Interim Financial Statements which are available on
the Company's website (www.nuvopharmaceuticals.com).
Second Quarter and Business Highlights (1)
- Total revenue in the second quarter of 2016 increased to
$8.1 million from $7.8 million in the first quarter of 2016 and
$3.0 million in the second quarter of
2015;
- Adjusted EBITDA(2) increased to $3.2 million for the second quarter of 2016
compared to $3.0 million for the
first quarter of 2016 and $0.3
million for the second quarter of 2015;
- Net income from continuing operations for the second quarter of
2016 was $2.5 million compared
$1.9 million for the first quarter of
2016 and a net loss from continuing operations of $0.5 million for the second quarter of 2015;
- Basic earnings per share from continuing operations for the
second quarter of 2016 was $0.22
compared to $0.17 for the first
quarter of 2016 and $(0.05) for the
second quarter of 2015;
- Cash and short-term investments were $16.0 million at June 30,
2016 compared to $14.0 million
at March 31, 2016.
(1) The financial information presented herein reflects
results from continuing operations with Nuvo's previously disclosed
segment, Crescita, presented as a discontinued operation.
(2) Adjusted EBITDA is a non-IFRS financial measure
defined by the Company below.
Pennsaid® 2%
- U.S. prescriptions of Pennsaid 2% increased to 126,000 in the
second quarter of 2016 compared to 109,000 prescriptions in the
first quarter of 2016 according to IMS Health;
- Pennsaid 2% product sales in the second quarter of 2016 were
consistent at $7.0 million with the
first quarter of 2016 compared to $2.1
million in the second quarter of 2015;
- In July, the Company announced it would conduct a new
placebo-controlled, multi-centre Phase 3 trial (Trial) in
Germany to study Pennsaid 2% for
the treatment of acute ankle sprains. Topline results of the Trial
are expected to be available in late Q2 or early Q3 2017. The Trial
is subject to approval by German regulatory authorities and the
ethical review committee. The Trial will be conducted to support
regulatory applications for marketing approval of Pennsaid 2% for
the treatment of acute pain in the E.U., Canada and Australia.
Q2 Financial Review
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.nuvopharmaceuticals.com).
|
|
Three months
ended
|
|
Six months
ended
|
|
|
|
June
30,
2016
|
June
30, 2015
|
Change
|
June
30, 2016
|
June
30, 2015
|
Change
|
(from continuing
operations, Canadian dollars
in millions, except gross
margin)
|
|
$
|
$
|
$
|
$
|
$
|
$
|
Product
Sales
|
|
7.3
|
2.7
|
4.6
|
14.6
|
6.5
|
8.1
|
Gross Margin % on Product
Sales
|
|
57%
|
35%
|
22%
|
57%
|
35%
|
22%
|
Other
Revenue
|
|
0.8
|
0.2
|
0.6
|
1.3
|
0.8
|
0.5
|
Total Operating
Expenses
|
|
5.6
|
3.5
|
2.1
|
11.0
|
6.1
|
4.9
|
Net Income
(loss)
|
|
2.5
|
(0.5)
|
3.0
|
4.4
|
1.5
|
2.9
|
Adjusted
EBITDA
|
|
3.2
|
0.3
|
2.9
|
6.2
|
1.4
|
4.8
|
Total revenue, consisting of product sales, royalties and
research and other contract revenue for the three months ended
June 30, 2016 was $8.1 million compared to $3.0 million for the three months ended
June 30, 2015. The increase in
revenue relates to a $4.6 million
increase in product sales and an increase in research and other
contract revenue. Total revenue for the six months ended
June 30, 2016 was $15.9 million compared to $7.3 million for the comparative six-month
period.
Total operating expenses for the three months ended June 30, 2016 were $5.6
million, an increase from $3.5
million for the three months ended June 30, 2015. The increase in the current
quarter was primarily due to an increase in cost of goods sold
(COGS) due to increased product sales and increased professional
and consulting fees the majority of which were for post-closing
costs associated with the reorganization of Nuvo into two separate
publicly traded companies: Nuvo and Crescita Therapeutics Inc.
(Crescita) (Reorganization) and transition services provided by
Crescita. Total operating expenses for the six months ended
June 30, 2016 increased to
$11.0 million from $6.1 million in the comparative six-month
period.
COGS for the three months ended June 30,
2016 was $3.2 million compared
to $1.8 million for the three months
ended June 30, 2015. The
increase in COGS in the current quarter was associated with
increased Pennsaid 2% product sales. The increase in product
sales improved the gross margin on product sales to $4.2 million or 57% for the three months ended
June 30, 2016 compared to a gross
margin of $1.0 million or 35% for the
three months ended June 30, 2015. For
the six months ended June 30, 2016,
COGS was $6.3 million compared to
$4.2 million in the comparative
period. Gross margin on product sales for the six months
ended June 30, 2016 increased by
$6.1 million to $8.3 million or 57% compared to $2.2 million or 35% for the six months ended
June 30, 2015.
R&D expenses were $0.2 million
for the three months ended June 30,
2016 compared to $0.3 million
for the three months ended June 30,
2015 and related entirely to Pennsaid 2% Phase 3
development. The decrease in spending related to lower costs as the
Company completed and closed off its 2015 Pennsaid 2% trial.
R&D expenses were $0.4 million
for the six months ended June 30,
2016 compared to $0.7 million
for the six months ended June 30,
2015.
G&A expenses were $2.3 million
for the three months ended June 30,
2016 compared to $1.5 million
for the three months ended June 30,
2015. The increase related to $0.6
million of higher professional and consulting fees of which
the majority of this amount was for post-closing costs associated
with the Reorganization and $0.1
million of transition services provided by Crescita.
Non-cash stock-based compensation (SBC) expenses included in
G&A were $0.7 million for the
three months ended June 30, 2016
compared to $0.9 million for the
three months ended June 30,
2015. In the current quarter, SBC expenses related primarily
to the revaluation of the Company's stock appreciation rights
(SARS). For the three months ended June 30, 2015, SBC was mainly related to the
revaluation of the Company's SARS and deferred stock units.
G&A expenses were $4.4 million
for the six months ended June 30,
2016 compared to $1.5 million
for the six months ended June 30,
2015.
The Company experienced a net foreign currency loss of
$32,000 for the three months ended
June 30, 2016 compared to a net
foreign currency loss of $13,000 for
the three months ended June 30,
2015. For the six months ended June
30, 2016, the Company experienced a net foreign currency
loss of $0.6 million compared to net
foreign currency gain of $0.3 million
in the comparative period.
Net income from continuing operations was $2.5 million for the three months ended
June 30, 2016 compared to a net loss
from continuing operations of $0.5
million for the three months ended June 30, 2015. In the current quarter, the
increase in gross margin was partially offset by an increase in
G&A expenses and lower interest income. Net income from
continuing operations was $4.4
million for the six months ended June
30, 2016 compared to $1.5
million for the six months ended June
30, 2015.
Adjusted EBITDA increased to $3.2
million for the three months ended June 30, 2016 compared to $0.3 million for the three months ended
June 30, 2015. The increase in
Adjusted EBITDA was primarily related to an increase in gross
margin. Adjusted EBITDA increased to $6.2 million for the six months ended
June 30, 2016 compared to
$1.4 million for the six months ended
June 30, 2015.
Cash and short-term investments was $16.0
million as at June 30, 2016
compared to $48.7 million at
December 31, 2015. The decrease
in cash is related to the $35.0
million that was transferred to Crescita as part of the
Reorganization of the Company and expenses related to the
Reorganization.
The number of common shares outstanding as at June 30, 2016 was 11,487,184.
Non-IFRS Financial Measures
Adjusted EBITDA
EBITDA is a non-IFRS financial measure. The term EBITDA
does not have any standardized meaning under IFRS and therefore may
not be comparable to similar measures presented by other
companies. The Company defines Adjusted EBITDA as net income
from continuing operations before net interest income, plus taxes,
depreciation, amortization and SBC. Management believes
Adjusted EBITDA is a useful supplemental measure from which to
determine the Company's ability to generate cash available for
working capital, capital expenditures and income taxes.
The following is a summary of how EBITDA and Adjusted EBITDA are
calculated:
|
|
|
Three Months
Ended June 30
|
|
Six Months Ended
June 30
|
|
|
2016
|
2015
|
|
2016
|
2015
|
in
thousands
|
|
$
|
$
|
|
$
|
$
|
Net income (loss)
from continuing
operations
|
|
2,491
|
(507)
|
|
4,419
|
1,518
|
Add
back:
|
|
|
|
|
|
|
|
Interest
expense
|
|
1
|
-
|
|
1
|
-
|
|
Interest
income
|
|
(23)
|
(138)
|
|
(79)
|
(287)
|
|
Income tax
expense
|
|
-
|
-
|
|
-
|
7
|
|
Depreciation and
amortization
|
|
55
|
73
|
|
113
|
154
|
EBITDA
|
|
2,524
|
(572)
|
|
4,454
|
1,392
|
Add
back:
|
|
|
|
|
|
|
|
SBC
|
|
652
|
880
|
|
1,711
|
30
|
Adjusted
EBITDA
|
|
3,176
|
308
|
|
6,165
|
1,422
|
Management to Host Conference Call/Webcast
Management will host a conference call to discuss the results
tomorrow (Thursday, August 11, 2016)
at 8:00 a.m. ET. To participate
in the conference call, please dial 1 (888) 231-8191 or (647)
427-7450, reference number 52369025. Please call in 15
minutes prior to the call to secure a line. You will be put
on hold until the conference call begins.
A taped replay of the conference call will be available two
hours after the live conference call and will be accessible until
August 18, 2016 by calling 1 (855)
859-2056 or (416) 849-0833, reference number 52369025.
A live audio webcast of the conference call will be available
through www.nuvopharmaceuticals.com. Please connect at least 15
minutes prior to the conference call to ensure adequate time for
any software download that may be required to hear the webcast.
About Nuvo Pharmaceuticals
Inc.
Nuvo (TSX:NRI) is a commercial healthcare company with a
portfolio of commercial products and pharmaceutical manufacturing
capabilities. Nuvo has three commercial products that are
available in a number of countries; Pennsaid 2%, Pennsaid and the
heated lidocaine/tetracaine patch. Pennsaid 2% is sold
in the U.S. by Horizon Pharma plc (NASDAQ:HZNP) and is available
for partnering in certain other territories around the world.
Nuvo manufactures Pennsaid for the global market and Pennsaid 2%
for the U.S. market at its FDA, Health Canada and EU approved
manufacturing facility in Varennes, Québec. For additional
information, please visit www.nuvopharmaceuticals.com.
Forward-Looking Statements
Certain statements in
this press release constitute forward-looking information and/or
forward-looking statements (collectively, "forward-looking
statements") within the meaning of applicable securities laws.
Forward-looking statements include, but are not limited to, the
future approval, marketing and sale of Pennsaid 2% in certain
jurisdictions, 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 "may", "will", "expect",
"intend", "believe", "should" or "plans", 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, but
are not limited to, general business and economic uncertainties and
adverse market conditions; as well as other risk factors included
in the Company's Management Information Circular dated December 31, 2015 and the Company's Annual
Information Form dated February 17,
2016 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. 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. 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 Pharmaceuticals Inc.