DERMAdoctor acquisition significantly expands
NovaBay’s presence in the large and lucrative skincare market
DERMAdoctor transaction is immediately
accretive to NovaBay’s earnings with expected profitability within
one year
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three and nine months ended September 30,
2021 and provides a business update.
“This has been a great year for NovaBay. Avenova revenue has
increased by 16% over the same period last year and we’ve cut our
net loss per share in half. Unit sales have reached an all-time
high as more people are using Avenova than ever before. Most
importantly, with the closing of the DERMAdoctor acquisition, we
have executed on our strategic initiative of expanding our
commercial portfolio with new, exciting science-based products,”
said Justin Hall, NovaBay CEO. “I’m enthused about the Company’s
strong strategic position in the large and growing skincare market.
The combined NovaBay and DERMAdoctor teams have already begun
vigorously working to drive the expansion of our top and bottom
lines.
“Going forward, DERMAdoctor will operate as a wholly owned
subsidiary of NovaBay with co-founders Drs. Audrey and Jeffrey
Kunin continuing to lead DERMAdoctor operations. I’m pleased to
announce that Audrey has taken on a broader role at NovaBay as our
Chief Product Officer,” added Mr. Hall. “Audrey is a
board-certified dermatologist, a known trailblazer in the skincare
industry and the developer of the many unique formulations found in
DERMAdoctor products. In the short time since we announced our
proposed business combination, Audrey has been working with us on
new products to be introduced in both the skincare and the eyecare
markets.”
“Some of the most popular DERMAdoctor products are centered
around the Calm Cool + Corrected, Kakadu C, and KP Duty families.
To expand on their success, we plan to launch two new products into
the Calm Cool + Corrected family in the first quarter of 2022. Then
in the second quarter, we anticipate launching one new product into
the Kakadu C family and another product into the well-established
KP Duty family. All of these additions will be omnichannel products
contributing to the incremental growth of the DERMAdoctor brand,”
said Dr. Audrey Kunin. “Also, keep an eye out for me on QVC in the
coming months.”
“DERMAdoctor is immediately accretive to the Company’s bottom
line, with sales of DERMAdoctor’s existing products anticipated to
double NovaBay’s revenues,” said Mr. Hall. “With the continued
sales growth of both NovaBay and DERMAdoctor products, along with
the revenue from totally new products, we now have a clear path to
profitability by the end of 2022. I believe that achieving and
sustaining profitability through double digit revenue growth will
be the ultimate driver of shareholder value.”
Third Quarter Financial Results
Net product revenue for the third quarter of 2021 was $1.8
million and consisted primarily of sales of Avenova. For the third
quarter of 2021, total Avenova unit sales increased 11% and Avenova
online unit sales increased 26%, both compared with the prior-year
period. Net product revenue was $2.2 million for the third quarter
of 2020, which included $1.8 million of Avenova sales, $0.2 million
of PhaseOne private-label skin and wound care product sales, and
$0.1 million of personal protective equipment (PPE) product sales.
There were no PhaseOne or PPE product sales in the third quarter of
2021. PhaseOne revenue is expected in the fourth quarter of
2021.
Gross margin on net product revenue for the third quarter of
2021 was 73%, compared with 75% for the third quarter of 2020.
Operating expenses for the third quarter of 2021 were $3.6
million, compared with $3.7 million for the third quarter of 2020.
Sales and marketing expenses were $1.9 million, compared with $1.7
million a year ago, with the increase due to higher digital
advertising costs partially offset by lower sales personnel
headcount. General and administrative (G&A) expenses of $1.8
million decreased slightly from $1.9 million for the third quarter
of 2020 primarily due to lower legal expenses. Research and
development (R&D) expenses for the third quarter of 2021
declined to $10 thousand from $125 thousand for the prior-year
period.
Non-cash loss on the change of fair value of warrant liability
for the third quarter of 2020 was $1.6 million. The warrants
underlying this loss have been eliminated and no comparable result
was recorded for the third quarter of 2021.
Net loss for the third quarter of 2021 was $2.3 million, or
$0.05 per share, an improvement from the net loss for the third
quarter of 2020 of $3.2 million, or $0.08 per share.
Nine Month Financial Results
Net product revenue for the nine months ended September 30, 2021
was $5.8 million, compared with $8.0 million for the nine months
ended September 30, 2020, which included the sale of KN95 masks and
other PPE products. For the first nine months of 2021, total
Avenova unit sales increased 39% and Avenova over-the-counter unit
sales increased 67%, both compared with the prior-year period.
Gross margin on net product revenue for the first nine months of
2021 was 73%, improving from the 61% for the first nine months of
2020.
For the nine months ended September 30, 2021, sales and
marketing expenses increased by 14% to $5.3 million, G&A
expenses decreased slightly by 2% to $4.5 million and R&D
expenses decreased by 86% to $36 thousand, all compared with the
nine months ended September 30, 2020.
Non-cash loss on the change of fair value of warrant liability
for the first nine months of 2020 was $5.2 million. There was no
comparable result recorded for the first nine months of 2021.
The net loss for the nine months ended September 30, 2021 was
$5.7 million, or $0.13 per share, compared with a net loss for the
nine months ended September 30, 2020 of $9.3 million, or $0.28 per
share.
NovaBay had cash and cash equivalents of $9.0 million as of
September 30, 2021, compared with $12.0 million as of December 31,
2020. During the nine months ended September 30, 2021, the Company
raised net proceeds of $1.8 million from the sale of common stock
through an ATM facility.
Conference Call
NovaBay management will host an investment community conference
call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific
time) to discuss the Company’s financial and operational results
and to answer questions. Shareholders and other interested parties
may participate in the conference call by dialing 866-777-2509 from
within the U.S. or 412-317-5413 from outside the U.S., and
requesting the NovaBay Pharmaceuticals call.
A live webcast of the call will be available at
http://novabay.com/investors/events and will be archived for 90
days. A replay of the call will be available beginning two hours
after the call ends through December 2, 2021 by dialing
877-344-7529 from within the U.S., 855-669-9658 from Canada or
412-317-0088 from outside the U.S., and entering the conference
identification number 10161592.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor will there be any sales of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
About NovaBay Pharmaceuticals
NovaBay Pharmaceuticals, Inc. is pharmaceutical company that
develops and sells scientifically created and clinically proven
consumer products for the eyecare and skincare markets. Avenova® is
the most prescribed antimicrobial lid and lash spray and CelleRx®
is a breakthrough product in the beauty category. In November 2021,
NovaBay acquired DERMAdoctor, LLC, a company commercializing more
than 30 dermatologist-developed skincare products sold through
traditional domestic retailers, digital beauty channels and
international distributors.
Forward-Looking Statements
Except for historical information herein, matters set forth in
this press release are forward-looking within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995, including statements about the commercial
progress, the transaction in which the Company acquired DERMAdoctor
and the future integration and performance of DERMAdoctor,
potential opportunities for revenue accretion and future financial
performance of NovaBay Pharmaceuticals, Inc. This release contains
forward-looking statements that are based upon management’s current
expectations, assumptions, estimates, projections and beliefs.
These statements include, but are not limited to, statements
regarding our business strategies and current product offerings,
potential future product offerings including through strategic
acquisitions, such as the acquisition of DERMAdoctor, or licensing
opportunities, expanded access to our products, and any future
revenue that may result from selling these products, as well as
generally the Company’s expected future financial results. These
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or achievements to be
materially different and adverse from those expressed in or implied
by the forward-looking statements. Factors that might cause or
contribute to such differences include, but are not limited to,
risks and uncertainties relating to the integration of
DERMAdoctor’s business with the Company’s business, the size of the
potential market for our products, the possibility that the
available market for the Company’s products will not be as large as
expected, the Company’s products will not be able to penetrate one
or more targeted markets, and revenues will not be sufficient to
meet the Company’s cash needs. Other risks relating to NovaBay’s
business, including risks that could cause results to differ
materially from those projected in the forward-looking statements
in this press release, are detailed in NovaBay’s latest Form 10-Q/K
filings as well as the Company’s Preliminary Proxy Statement filing
with the Securities and Exchange Commission, especially under the
heading “Risk Factors.” The forward-looking statements in this
release speak only as of this date, and NovaBay disclaims any
intent or obligation to revise or update publicly any
forward-looking statement except as required by law.
Socialize and Stay Informed on
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Twitter Connect with NovaBay on LinkedIn Visit NovaBay’s
Website
Avenova Purchasing
Information For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com.
Avenova.com
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands except par value
amounts)
September 30,
December 31,
2021
2020
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
9,028
$
11,952
Accounts receivable, net of allowance for
doubtful accounts ($0 at September 30, 2021 and December 31,
2020)
843
1,106
Inventory, net of allowance for excess and
obsolete inventory ($149 and $236 at September 30, 2021 and
December 31, 2020, respectively)
969
608
Prepaid expenses and other current
assets
657
576
Total current assets
11,497
14,242
Operating lease right-of-use assets
170
436
Property and equipment, net
96
84
Other assets
476
476
TOTAL ASSETS
$
12,239
$
15,238
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
1,354
$
302
Accrued liabilities
1,325
2,115
Operating lease liabilities
195
416
Total current liabilities
2,874
2,833
Operating lease
liabilities-non-current
1
87
Total liabilities
2,875
2,920
Commitments & contingencies (please
refer to Note 8)
Stockholders' equity:
Preferred stock: 5,000 shares authorized;
none issued and outstanding at September 30, 2021 and December 31,
2020
—
—
Common stock, $0.01 par value; 100,000 and
75,000 shares authorized at September 30, 2021 and December 31,
2020, respectively; 44,943 and 41,782 shares issued and outstanding
at September 30, 2021 and December 31, 2020, respectively
450
418
Additional paid-in capital
150,643
147,963
Accumulated deficit
(141,729
)
(136,063
)
Total stockholders' equity
9,364
12,318
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
12,239
$
15,238
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands except per share
data)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Sales:
Product revenue, net
$
1,834
$
2,167
$
5,761
$
8,038
Other revenue, net
6
3
19
8
Total sales, net
1,840
2,170
5,780
8,046
Product cost of goods sold
493
536
1,562
3,157
Gross profit
1,347
1,634
4,218
4,889
Operating expenses:
Research and development
10
125
36
249
Sales and marketing
1,855
1,692
5,323
4,675
General and administrative
1,771
1,879
4,527
4,633
Total operating expenses
3,636
3,696
9,886
9,557
Operating loss
(2,289
)
(2,062
)
(5,668
)
(4,668
)
Non-cash loss on changes in fair value of
warrant liability
—
(1,589
)
—
(5,224
)
Non-cash gain on changes in fair value of
embedded derivative liability
—
1
—
3
Other income, net
—
429
2
605
Loss before provision for income taxes
(2,289
)
(3,221
)
(5,666
)
(9,284
)
Provision for income taxes
—
—
-
(1
)
Net loss and comprehensive loss
$
(2,289
)
$
(3,221
)
$
(5,666
)
$
(9,285
)
Net loss per share (basic and diluted)
$
(0.05
)
$
(0.08
)
$
(0.13
)
(0.28
)
Weighted-average shares of common stock
used in computing net loss per share (basic and diluted)
44,921
40,037
43,100
$
32,614
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211111006031/en/
NovaBay Contact Justin Hall
Chief Executive Officer and General Counsel 510-899-8800
jhall@novabay.com
Investor Contact LHA
Investor Relations Jody Cain 310-691-7100 jcain@lhai.com
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