NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY), a
biopharmaceutical company focusing on commercializing Avenova® for
the domestic eye care market, announces that President and CEO
Justin Hall has issued the following letter to stockholders:
To My Fellow Stockholders:
The second quarter of 2019 was transformative for NovaBay. As we
look forward to the third quarter and remainder of 2019, I would
like to take a moment to update you on the progress we’ve made in
the first half of the year. NovaBay has made considerable
advancements toward our goals of increasing Avenova accessibility
and enhancing the patient experience, while maintaining product
affordability in an evolving reimbursement environment. To achieve
these goals, we have improved the efficiency of both our
prescription sales and our buy-and-build channels, and launched a
new direct-to-consumer channel on Amazon.com, making
prescription-strength Avenova available for the first time without
a prescription.
I would like to reiterate that with Avenova, NovaBay is selling
a terrific product that is widely accepted by medical professionals
as well as their patients. All of our current initiatives are
designed to accelerate our time to profitability and build upon
Avenova’s foundation as the leading prescription lid and lash
spray. As the only commercially available pure hypochlorous acid
formulation, we are confident Avenova is the best product to treat
the chronic bacterial infections that affect approximately 85% of
all dry eye sufferers. Avenova is free from the bleach impurities
found in other hypochlorous products, is soothing to the eye, and
is safe and effective for long-term use. Since we launched Avenova
in 2014, more than 850,000 prescriptions have been written by more
than 15,000 physicians. That said, we have barely tapped the large
addressable market for bacterial dry eye.
The trend toward higher-deductible health plans has impacted
branded prescription drugs industrywide and is challenging our
commercial goals. Under our prescription sales strategy, we have
made Avenova 40mL continuously available to patients regardless of
health insurance coverage for $60 or less through the use of
coupons and rebates. Higher deductible health plans have
necessitated greater usage of rebates and coupons to maintain
Avenova’s affordability, however I would like to remind doctors and
patients alike that no one should ever pay more than $60 for a 40mL
bottle of Avenova at the pharmacy. Through our Partner Pharmacy
Program, or through our coupon and rebate program, we guarantee
this pricing for every patient. Avenova® Direct is the same
strength hypochlorous formulation as prescription Avenova in a 20mL
size at the affordable price of $29.99 on Amazon.com.
In the first quarter of 2019, we were challenged by the costs of
maintaining an expanded commercial organization. Earlier this year
we made a strategic shift by significantly reducing the number of
field sales representatives by about three-quarters and redeploying
our remaining representatives in territories that account for about
95% of retail pharmacy sales. This shift allows us to effectively
utilize our streamlined commercial resources to reach
higher-prescribing physicians while reducing our 2019 budget by an
estimated $3.6 million, which supports our goal of
profitability.
I want to share updates on our efforts to increase sales by
enhancing our three sales channels while also reducing the cost of
sales:
Direct-to-Consumer Model: In an
effort to improve patient access, Avenova Direct was launched on
June 1, 2019 to U.S. customers exclusively on Amazon.com. This
channel offers NovaBay with stable gross-to-net pricing and
provides customers with easy access to our product. This model
capitalizes on a trend to sell pharmaceutical products directly to
consumers in response to high-deductible health plans, allowing
customers to forego a time-consuming doctor visit and trip to the
pharmacy. We are promoting this program through complementary
social media marketing to target consumers in specific
demographics, as well as to ophthalmologists, optometrists, and
current and former Avenova patients.
Prescription Channel: Since the
start of the year we have doubled the number of pharmacies in our
Partner Pharmacy Program to 16, putting us on track to increase
Avenova sales through retail pharmacies from one-quarter to
one-half of all sales. Our partner pharmacies provide patients with
a quality experience that includes a relatively short time between
receiving the initial prescription and filling it, fast refills and
home delivery. The combination of a pre-negotiated price along with
a reduction in coupon and rebate usage improves our gross-to-net
and per-script profitability.
Buy-and-Sell Channel: We are
increasing the number of optometrists and ophthalmologists
utilizing our buy-and-sell channel under which they directly sell
prescription Avenova in the 20mL size at a suggested retail price
of $30, making it convenient for patients to buy Avenova during
their office visit and providing eye care specialists with a new
source of revenue. We are encouraging more eye-care professionals
to become resellers of Avenova through an extensive email campaign
that provides ways to incorporate Avenova into their practices.
Additionally, we have made ordering the product easier for
physicians through our updated website Avenova.com.
We are gratified by the warm reception we have received from
Avenova patients and ophthalmology key opinion leaders, some of
which are available on Avenova.com. I want to share excerpts from
an email recently sent by ophthalmologist Dr. Lisa Arbisser:
Avenova is the ONLY true pure hypochlorous
acid. It is the product of the human white [blood] cell with the
antiseptic activity of iodine (betadine) but without the toxicity.
One of the most important attributes of hypochlorous acid is its
ability to penetrate bacterial biofilm, an essential attribute for
complete cure which antibiotics lack. Additionally, it kills all
infective organisms on contact theoretically eliminating the
development of resistance. The other essential quality is that,
unlike with the use of antibiotics, it does not disrupt the biome
but lowers or eliminates all the organisms present permitting
restoration of normal flora more rapidly and completely. This is a
proven advantage for eyelid infection and overgrowth of
opportunistic infectious agents responsible for blepharitis.
In summary, we are encouraged by our progress in commercializing
a product with many important competitive advantages in a large
market. We are actively taking steps to adapt to an industrywide
change in the reimbursement environment to make Avenova accessible
and affordable under appropriate economics to NovaBay. Our refined
programs are focused on driving revenues through the most efficient
sales channels with the goal of achieving positive cash flow and
profitability.
On behalf of my colleagues at NovaBay Pharmaceuticals and our
board of directors, I want to thank our stockholders for their
continued support.
Sincerely,
Justin Hall Chief Executive Officer and General Counsel
About Avenova®
Avenova is an eye care product formulated with our proprietary,
stable and pure form of hypochlorous acid. Avenova is designed for
removal of the microorganisms and debris that contribute to
conditions such as meibomian gland dysfunction, dry eye and
blepharitis. Avenova is marketed to optometrists and
ophthalmologists throughout the U.S. by NovaBay’s direct salesforce
and available online through Amazon.com.
About NovaBay Pharmaceuticals, Inc.: Going Beyond
Antibiotics®
NovaBay Pharmaceuticals, Inc. is a biopharmaceutical company
focusing on commercializing and developing its non-antibiotic
anti-infective products to address the unmet therapeutic needs of
the global, topical anti-infective market with its two distinct
product categories: the NEUTROX® family of products and the
AGANOCIDE® compounds. The Neutrox family of products includes
AVENOVA® for the eye care market, NEUTROPHASE® for wound care
market, and CELLERX® for the aesthetic dermatology market. The
Aganocide compounds, still under development, have target
applications in the dermatology and urology markets.
Forward-Looking Statements
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 future momentum and online
sales, Board and executive composition, and 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 our ability to remain a publicly listed
company, maintain the support of our majority shareholders, and
ability to adhere to our approved NYSE compliance plan. 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 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.
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Avenova Purchasing Information For NovaBay Avenova
purchasing information: Please call 800-890-0329 or email
sales@avenova.com. www.Avenova.com
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version on businesswire.com: https://www.businesswire.com/news/home/20190715005240/en/
NovaBay Contact Justin Hall President and Chief Executive
Officer 510-899-8800 jhall@novabay.com
Investor Contact LHA Investor Relations Jody Cain
310-691-7100 jcain@lhai.com
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