Avenova® sales increase 9% and operating
expenses decline 47% over the 2019 first quarter
Conference call to be held Thursday August 8,
2019 at 4:30 p.m. Eastern time
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY), a
biopharmaceutical company focusing on commercializing Avenova for
the domestic eye care market, reports financial results for the
three and six months ended June 30, 2019 and provides a business
update.
“We are having success with our strategy to increase Avenova
sales through various channels that address the negative impact of
high-deductible health plans on unit sales and gross-to-net
revenue,” said Justin Hall, President and CEO. “Avenova sales for
the 2019 second quarter of $1.6 million increased 9% over the first
quarter while operating expenses decreased 47%.
“Avenova sales through our prescription channel increased 7%
over the first quarter despite the 67% reduction in the size of our
salesforce in March. We achieved this growth by deploying our
remaining sales representatives in high-volume territories with
favorable reimbursement, while doubling the number of pharmacies in
our partner pharmacy program. We sell Avenova to our pharmacy
partners at pre-negotiated prices, and about 52% of all
prescription units were sold through these channel partners in the
second quarter, up from about 38% in the first quarter of 2019.
Additionally, we launched Avenova Direct on Amazon.com in June to
improve patient access to the product and expand our reach into a
broader marketplace.
“Beyond just Avenova, we are preparing another
direct-to-consumer launch for late 2019 with our product for
aesthetic dermatology, CelleRx®. This unique topical solution based
on our pure hypochlorous formulation is especially designed to
gently clean and ease discomfort following cosmetic procedures, and
targets a large global market opportunity,” he added.
Second Quarter Financial Results
Net sales for the second quarter of 2019 were $1.8 million and
included $1.6 million in Avenova sales and $0.2 million for a
stocking order for NeutroPhase® to China Pioneer Pharma
Holdings. Net sales were $2.8 million for the second quarter of
2018. The decrease was due to lower Avenova unit sales and lower
gross-to-net pricing. Gross margin on net product revenue was 77%
for the second quarter of 2019 compared with 83% for the prior-year
period, with the decrease due to lower product revenue.
Operating expenses for the second quarter of 2019 were $2.8
million, a 37% decline from $4.4 million in the second quarter of
2018, reflecting the strategic shift in the U.S. commercial
organization in March 2019. Sales and marketing expenses for the
second quarter of 2019 were $1.5 million, a 48% decrease from $3.0
million for the second quarter of 2018. General and administrative
expenses for the second quarter of 2019 were $1.2 million, a 12%
decrease from $1.4 million for the second quarter of 2018. Research
and development expenses for the second quarter of 2019 were
$32,000 compared with $61,000 for the second quarter of 2018.
Operating loss for the second quarter of 2019 was $1.4 million,
a 34% improvement from the operating loss of $2.1 million for the
second quarter of 2018.
Non-cash loss on the change of fair value of warrant liability
for the second quarter of 2019 was $0.5 million compared with a
non-cash gain of $0.5 million for the second quarter of 2018.
Non-cash loss on the embedded derivative associated with the
convertible note for the second quarter of 2019 was $0.2 million.
The Company did not record a comparable loss or gain for the second
quarter of 2018.
Other expense for the second quarter of 2019 was $0.4 million
compared with other income of $5,000 for the second quarter of
2018. The other expense in 2019 was due to interest due on the
Promissory Note issued in February 2019 and the amortization of
discount and issuance cost related to the Convertible Note issued
in March 2019.
The net loss for the second quarter of 2019 was $2.5 million, or
$0.14 per share, compared with a net loss for the second quarter of
2018 of $1.6 million, or $0.09 per share.
Six Month Financial Results
Net sales for the six months ended June 30, 2019 were $3.3
million compared with $5.7 million for the six months ended June
30, 2018. Gross margin on net product revenue was 77% for the first
half of 2019 compared with 87% for the first half of 2018.
For the six months ended June 30, 2019, sales and marketing
expenses decreased 21% to $5.1 million, general and administrative
expenses decreased 6% to $2.8 million and research and development
expenses increased 9% to $117,000, all compared with the six months
ended June 30, 2018.
Non-cash loss on the change of fair market of warrant liability
for the first six months of 2019 was $0.5 million compared with a
non-cash gain of $0.7 million for the first six months of 2018.
Non-cash loss on the embedded derivative associated with the
Convertible Note for the first six months of 2019 was $0.2 million.
The Company did not record a comparable loss or gain for the first
six months of 2018.
Other expense for the first six months of 2019 was $0.5 million
compared with other income of $9,000 for the same period of 2018.
The other expense was due to interest due on the Promissory Note
issued in February 2019 and the amortization of discount and
issuance cost related to the Convertible Note issued in March
2019.
The net loss for the six months ended June 30, 2019 was $6.7
million, or $0.38 per share, compared with a net loss for the six
months ended June 30, 2018 of $3.7 million, or $0.22 per share.
NovaBay reported cash and cash equivalents of $3.7 million as of
June 30, 2019 compared with $3.2 million as of December 31, 2018.
The Company raised $1.0 million through a related-party loan in
February, $2.0 million through a convertible loan in March, and
$0.4 million in May and $2.4 million in June through private
placements of common stock.
Conference Call
NovaBay management will host an investment community conference
call on Thursday August 8, 2019 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 800-608-8202 from within the U.S. or 702-495-1913 from
outside the U.S., with the conference identification number
6067542.
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 call ends through 11:59 p.m. Eastern time August 26, 2019 by
dialing 855-859-2056 from within the U.S. or 404-537-3406 from
outside the U.S. and entering the conference identification number
6067542.
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 direct-to-consumer 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 business strategies and future
focus, our estimated future revenue, 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 the size of the potential market for our
products, improving sales rep productivity and product
distribution, obtaining adequate insurance reimbursement, and any
potential regulatory problems. 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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NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS (in thousands, except par value
amounts)
June 30,
December 31,
2019
2018
(Unaudited)
ASSETS Current assets: Cash
and cash equivalents
$
3,668
$
3,183
Accounts receivable, net of allowance for doubtful accounts ($24
and $10 at June 30, 2019 and December 31, 2018, respectively)
1,536
3,385
Inventory, net of allowance for excess and obsolete inventory and
lower of cost or estimated net realizable value adjustments ($109
and $104 at June 30, 2019 and December 31, 2018, respectively)
664
280
Prepaid expenses and other current assets
1,628
1,760
Total current assets
7,496
8,608
Operating lease right-of-use assets
1,655
-
Property and equipment, net
177
201
Other assets
542
552
TOTAL ASSETS
$
9,870
$
9,361
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: Current liabilities: Accounts payable
$
356
$
551
Accrued liabilities
1,931
3,255
Deferred revenue —
41
Operating lease liabilities
1,065
— Total current liabilities
3,352
3,847
Operating lease liabilities-non-current
889
-
Deferred rent —
184
Notes payable, related party
1,110
— Warrant liability
266
178
Convertible note
1,654
— Embedded derivative liability
673
— Other liabilities
257
198
Total liabilities
8,201
4,407
Stockholders' equity : Preferred stock: 5,000
shares authorized; none outstanding at June 30, 2019 and December
31, 2018 — — Common stock, $0.01 par value; 50,000 shares
authorized; 20,733 and 17,089 shares issued and outstanding at June
30, 2019 and December 31, 2018, respectively
207
171
Additional paid-in capital
123,518
119,764
Accumulated deficit
(122,056
)
(114,981
)
Total stockholders' equity
1,669
4,954
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
9,870
$
9,361
NOVABAY PHARMACEUTICALS,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except per
share data)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Sales:
Product revenue, net
$
1,789
$
2,794
$
3,239
$
5,728
Other revenue
— —
41
13
Total sales, net
1,789
2,794
3,280
5,741
Product cost of goods sold
403
479
744
730
Gross profit
1,386
2,315
2,536
5,011
Research and development
32
61
117
107
Sales and marketing
1,535
2,977
5,066
6,373
General and administrative
1,198
1,360
2,803
2,982
Total operating expenses
2,765
4,398
7,986
9,462
Operating loss
(1,379
)
(2,083
)
(5,450
)
(4,451
)
Non cash (loss) gain on changes
in fair value of warrant liability
(487
)
490
(544
)
704
Non cash loss on changes in fair
value of embedded derivative liability
(246
)
—
(246
)
—
Other (expense) income, net
(387
)
5
(447
)
9
Loss before provision for income
taxes
(2,499
)
(1,588
)
(6,687
)
(3,738
)
Provision for income tax
(2
)
(1
)
(3
)
(1
)
Net loss and comprehensive
loss
$
(2,501
)
$
(1,589
)
$
(6,690
)
$
(3,739
)
Net loss per share attributable
to common stockholders, basic
$
(0.14
)
$
(0.09
)
$
(0.38
)
$
(0.22
)
Net loss per share attributable
to common stockholders, diluted
$
(0.14
)
$
(0.12
)
$
(0.38
)
$
(0.26
)
Weighted-average shares of common
stock outstanding used in computing net loss per share of common
stock
Basic
18,613
17,089
17,857
16,750
Diluted
18,613
17,292
17,857
16,985
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190807005144/en/
Avenova Purchasing
Information For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com
www.Avenova.com
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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