IRVINE, Calif., Aug. 9, 2017 /PRNewswire/ -- Novus
Therapeutics, Inc. (NASDAQ: NVUS), a development stage specialty
pharmaceutical company focused on the development of products for
disorders of the ear, nose, and throat (ENT), today reported
results for the second quarter 2017.
For the three months ended June 30,
2017, the Novus reported a net loss of $6.7 million or $1.32 per share. This compares to a net
loss of $1.0 million or $2.25 per share for the same period in the prior
year. For the six months ended June
30, 2017, Novus reported a net loss of $8.0 million or $2.51 per share. This compares to a net
loss of $2.1 million or $4.68 per share for the same period in the prior
year. Novus ended the second quarter of 2017 with
$22.5 million in cash and cash
equivalents.
"The second quarter was a transformational period for the
company," said Gregory J. Flesher,
President and Chief Executive Officer. "We completed the
previously announced merger with Tokai Pharmaceuticals, Inc., made
changes to the leadership team, consolidated operations to our
Irvine headquarters, and embarked
on a focused effort to advance OP-02 as a potential first-in-class
treatment option for the millions of patients burdened by otitis
media."
Recent Business Highlights and Corporate Update
- Completion of the Merger: On May 9, 2017, the previously announced merger
between Otic Pharma, Ltd. and Tokai Pharmaceuticals, Inc. was
completed and the name of the combined company was changed to Novus
Therapeutics, Inc. On May 11,
2017, Novus began trading on the NASDAQ Capital Market under
the ticker symbol "NVUS."
- Financing Activities: Novus raised an additional
$7.1 million in gross proceeds in
connection with the merger. The proceeds included
$4.0 million obtained through a
private placement of the company's common stock on May 10, 2017 and approximately $3.1 million obtained through the exercise of
Otic Pharma, Ltd. warrants prior to close of the merger.
- Leadership Change: Jon
Kuwahara joined Novus as Senior Vice President of Finance
and Administration, succeeding Christine
Ocampo. Mr. Kuwahara has over 25 years of finance and
operations experience, primarily within the pharmaceutical
industry. Mr. Kuwahara is a member of the Board of Directors,
and Chairman of the Audit Committee, for Emmaus Life Sciences, Inc.
and has held past finance roles at Espero Pharmaceuticals, Avanir
Pharmaceuticals, and Questcor Pharmaceuticals.
- Research and Development: Given the current
capital resources, Novus made the strategic decision to focus
substantially all of its development activities to the advancement
of OP-02 for otitis media, an opportunity management believes has
the greatest potential to create significant shareholder
value. Novus is currently conducting formulation development
activities on OP-02, and upon successful completion and
manufacturing of clinical supply, plans to begin human studies in
2018. Novus currently maintains nine prostate cancer patients
in a safety study of galeterone, but has terminated all other
research and development activities related to galeterone.
Financial Results for the Three Months and Six Months Ended
June 30, 2017
Research and development expenses for the three-month and
six-month periods ended June 30, 2017
decreased to approximately $0.5
million and $1.0 million, as
compared to $0.6 million and
$1.3 million respectively, for the
same periods in 2016. The change was primarily attributed to
decreased spending towards OP-01 and offset by costs incurred for
Tokai's legacy development programs during 2017.
General and administrative expenses for the three-month and
six-month periods ended June 30, 2017
increased to approximately $6.1
million and $7.0 million, as
compared to $0.3 million and
$0.8 million, respectively for the
same periods in 2016. The change was primarily attributed to
$5.4 million in one-time merger
related expenses for the three-month period ended June 30, 2017 and public company related
expenses, including severance costs for previous Tokai
employees.
About Novus Therapeutics
Novus Therapeutics is a development stage pharmaceutical company
focused on the development of products for disorders of the ear,
nose, and throat (ENT). Novus has two technologies, each of
which has the potential to be developed for multiple ENT
indications. The company's lead product (OP-02) is a
surfactant-based, combination drug product being developed as a
potential first-in-class treatment option for patients at risk for
or with otitis media ("OM") (middle ear inflammation with or
without infection), which is often caused by Eustachian tube
dysfunction ("ETD"). Globally, OM affects more than 700
million adults and children every year. OM is a common
disorder seen in pediatric practice, and in the United States is the most frequent reason
children are prescribed antibiotics and undergo surgery.
Novus also has a foam-based drug delivery technology (OP-01), which
may be developed in the future for delivery of drugs into the ear,
nose, and sinus cavities. For more information on Novus,
please visit novustherapeutics.com.
Forward-looking Statements
Any statements in this press release about the company's future
expectations, plans and prospects, including statements about its
strategy, future operations, development of its product candidates,
the review of strategic alternatives and the outcome of such review
and other statements containing the words "believes,"
"anticipates," "plans," "expects," "may," and similar expressions,
constitute forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, expectations regarding
the timing for the commencement and completion of our clinical
trials and our ability to accelerate the development of our drug
candidates. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various
important factors, including: the sufficiency of the company's cash
resources; the ability to timely develop and manufacture clinical
batches of our study drugs; the ability to obtain necessary
approvals to commence additional clinical trials; whether data from
early clinical trials will be indicative of the data that will be
obtained from future clinical trials; whether the results of
clinical trials will warrant submission for regulatory approval of
any investigational product, any such submission will receive
approval from the United States Food and Drug Administration or
equivalent foreign regulatory agencies and, if we are able to
obtain such approval for an investigational product, it will be
successfully distributed and marketed. Any forward-looking
statements contained in this press release speak only as of the
date hereof and not of any future date, and the company expressly
disclaims any intent to update any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Investor Contacts
The Trout Group
Gita Ogawa
Tel: (646) 378-2949
gogawa@troutgroup.com
Novus Therapeutics, Inc.
Investor Relations
Tel: (949) 238-8090
investors@novustherapeutics.com
NOVUS
THERAPEUTICS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands,
except share and per share data)
|
|
|
|
June
30, 2017
|
|
December
31, 2016
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
22,498
|
|
$
|
1,103
|
|
Restricted
cash
|
|
|
13
|
|
|
14
|
|
Prepaid expenses and
other current assets
|
|
|
2,332
|
|
|
33
|
|
Total current
assets
|
|
|
24,843
|
|
|
1,150
|
|
Property and equipment,
net
|
|
|
49
|
|
|
31
|
|
Restricted
cash
|
|
|
70
|
|
|
—
|
|
Goodwill
|
|
|
1,867
|
|
|
—
|
|
Other assets
|
|
|
15
|
|
|
15
|
|
Total assets
|
|
$
|
26,844
|
|
$
|
1,196
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
374
|
|
$
|
338
|
|
Accrued
severance
|
|
|
1,300
|
|
|
—
|
|
Accrued expenses and
other liabilities
|
|
|
1,486
|
|
|
113
|
|
Convertible
notes
|
|
|
—
|
|
|
3,447
|
|
Total current
liabilities
|
|
|
3,160
|
|
|
3,898
|
|
Long-term
liabilities
|
|
|
245
|
|
|
—
|
|
Total
liabilities
|
|
|
3,405
|
|
|
3,898
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
|
|
|
Preferred stock, $0.001
par value, 5,000,000 shares authorized; 0 and 452,706 shares issued
and outstanding at June 30, 2017 and December 31, 2016
|
|
|
—
|
|
|
11
|
|
Common stock, $0.001
par value, 200,000,000 shares authorized; 6,943,832 and 82,246
shares issued and outstanding at June 30, 2017 and December 31,
2016, respectively
|
|
|
7
|
|
|
1
|
|
Additional paid-in
capital
|
|
|
45,858
|
|
|
11,385
|
|
Goodwill
|
|
|
—
|
|
|
291
|
|
Accumulated
deficit
|
|
|
(22,426)
|
|
|
(14,390)
|
|
Total stockholders'
equity (deficit)
|
|
|
23,439
|
|
|
(2,702)
|
|
Total liabilities and
stockholders' equity (deficit)
|
|
$
|
26,844
|
|
$
|
1,196
|
|
NOVUS
THERAPEUTICS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(Unaudited)
|
(In thousands,
except share and per share data)
|
|
|
|
Three Months
Ended June
30,
|
|
|
Six Months
Ended June
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
$
|
533
|
|
|
$
|
592
|
|
|
$
|
1,012
|
|
|
$
|
1,282
|
|
General and
administrative
|
|
|
6,133
|
|
|
|
340
|
|
|
|
7,039
|
|
|
|
762
|
|
Total operating
expenses
|
|
|
6,666
|
|
|
|
932
|
|
|
|
8,051
|
|
|
|
2,044
|
|
Loss from
operations
|
|
|
(6,666)
|
|
|
|
(932)
|
|
|
|
(8,051)
|
|
|
|
(2,044)
|
|
Other income (loss),
net
|
|
|
4
|
|
|
|
(70)
|
|
|
|
15
|
|
|
|
(61)
|
|
Net loss and
comprehensive loss
|
|
$
|
(6,662)
|
|
|
$
|
(1,002)
|
|
|
$
|
(8,036)
|
|
|
$
|
(2,105)
|
|
Net loss per share,
basic and diluted
|
|
$
|
(1.32)
|
|
|
$
|
(2.25)
|
|
|
$
|
(2.51)
|
|
|
$
|
(4.68)
|
|
Weighted-average
shares outstanding,
basic and
diluted
|
|
|
4,154,842
|
|
|
|
77,856
|
|
|
|
2,270,907
|
|
|
|
77,856
|
|
NOVUS
THERAPEUTICS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Six Months
Ended June
30,
|
|
|
2017
|
|
2016
|
|
Operating
activities
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,036)
|
|
$
|
(2,105)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
16
|
|
|
20
|
|
Stock-based
compensation
|
|
|
236
|
|
|
85
|
|
Loss on disposal of
fixed assets
|
|
|
31
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Prepaid expenses and
other assets
|
|
|
(1,167)
|
|
|
45
|
|
Accounts payable and
accrued expenses
|
|
|
7
|
|
|
(207)
|
|
Net cash used in
operating activities
|
|
|
(8,913)
|
|
|
(2,162)
|
|
Investing
activities
|
|
|
|
|
|
|
|
Cash received from
merger transaction
|
|
|
23,250
|
|
|
—
|
|
Proceeds from sale of
equipment
|
|
|
8
|
|
|
—
|
|
Purchase of property
and equipment
|
|
|
—
|
|
|
(10)
|
|
Net cash provided by
(used in) investing activities
|
|
|
23,258
|
|
|
(10)
|
|
Financing
activities
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock, net
|
|
|
4,000
|
|
|
—
|
|
Proceeds from
exercise of warrants
|
|
|
3,119
|
|
|
—
|
|
Net cash provided by
financing activities
|
|
|
7,119
|
|
|
—
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
|
21,464
|
|
|
(2,172)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
|
1,117
|
|
|
3,109
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
22,581
|
|
$
|
937
|
|
Supplemental
disclosure of cash flow information
|
|
|
|
|
|
|
|
Noncash
activities:
|
|
|
|
|
|
|
|
Conversion of
promissory notes and interest to common stock
|
|
$
|
3,447
|
|
$
|
—
|
|
Conversion of
preferred stock to common stock
|
|
$
|
9
|
|
$
|
—
|
|
Conversion of
contingently issuable shares to common stock
|
|
$
|
291
|
|
$
|
—
|
|
Fair value of assets
acquired and liabilities assumed in the merger:
|
|
|
|
|
|
|
|
Fair value of assets
acquired, excluding cash and restricted cash
|
|
$
|
3,072
|
|
|
|
|
Fair value of
liabilities assumed
|
|
|
(2,947)
|
|
|
|
|
Fair value of net
assets acquired in the merger
|
|
$
|
125
|
|
|
|
|
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SOURCE Novus Therapeutics, Inc.