- Net product revenue of $1.9 million, up 30% year-over-year
- 51% of Avenova® sales generated from Amazon.com, up from 35% in
the fourth quarter
- Sales of KN95 masks near one million units
- Emergency Use Approval for COVID-19 test kits filed on April
17, 2020
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three months ended March 31, 2020 and
provides a business update.
“First quarter net product revenue of $1.9 million increased 30%
over the prior year as we benefitted from higher Avenova unit sales
and from initial KN95 masks sales,” said Justin Hall, President and
CEO of NovaBay Pharmaceuticals. “Online sales for the first time
accounted for more than half of all Avenova sales for the quarter,
up from 35% for the fourth quarter of 2019. We are making
significant progress with our strategy to diversify our product
offerings and sales channels in an effort to offset changes in
industrywide prescription reimbursement that have impacted Avenova
sales in past years.
“During this economic slowdown, we tapped into our global
healthcare supply network to secure in-demand items that we can
offer at reasonable prices. We are nearing the milestone of selling
one million KN95 masks, which includes several large orders sold at
discounted pricing. Most of these sales occurred in April,” he
added. “We also have submitted the fluorecare® rapid, point-of-care
COVID-19 antibody test for Emergency Use Authorization (EUA) with
the U.S. Food and Drug Administration (FDA) for sale to U.S.
healthcare professionals, which follows our recently announced
distribution agreement. While our business faces considerable
uncertainty from the COVID-19 pandemic, the nimbleness of our
organization enabled us to quickly add the masks to our existing
product offerings and submit the test kits for FDA EUA approval.
I’m pleased to report that our entire organization is prepared to
support a return to full operations following the lifting of
shelter-in-place restrictions.”
NovaBay also announced the appointment of Andy Jones as Chief
Financial Officer and Treasurer effective May 4, 2020. “I am
honored to be joining the team at such an exciting time in the
company’s development,” said Mr. Jones. “Recent events, including
the diversification of product offerings and sales channels,
demonstrate the forward thinking nature of the NovaBay team. I look
forward to using my experience to support these and future
initiatives to achieve continued success.”
Because the regulatory landscape for the test kits has been
changing so rapidly, NovaBay cannot assure a timeline for FDA
review and/or clearance for commercial marketing under EUA, or if
clearance will be granted at all.
First Quarter Financial Results
Net product revenue for the first quarter of 2020 was $1.9
million, a 30% increase from $1.5 million for the first quarter of
2019. The increase is due to higher Avenova unit sales, partially
offset by a lower net selling price largely due to a decrease in
insurance coverage by national payors. In response to this pricing
dynamic, in June 2019 NovaBay launched Avenova sales on Amazon.com,
which is helping to stabilize Avenova unit sales but at a lower net
selling price. First quarter net sales also included $176,000 in
sales of KN95 masks and $173,000 from a shipment of NeutroPhase® to
NovaBay’s distribution partner China Pioneer Pharma Holdings. Gross
margin on net product revenue was 69% for the first quarter of
2020, compared with 77% for the prior-year period, with the
decrease due to lower Avenova gross-to-net pricing.
Operating expenses for the first quarter of 2020 were $2.8
million, a 45% decline from $5.2 million for the first quarter of
2019, reflecting the strategic shift in the U.S. commercial
organization undertaken in March 2019 that included a major
salesforce reduction, partially offset by an increase in direct
marketing expenses focused on increasing sales of Avenova. Sales
and marketing expenses for the first quarter of 2020 were $1.6
million, a 56% decline from $3.5 million for the first quarter of
2019 reflecting lower headcount, partially offset by an increase in
direct marketing expenses. General and administrative (G&A)
expenses for the first quarter of 2020 were $1.3 million, a 20%
decline from $1.6 million for the first quarter of 2019 due to the
departure of the Company’s interim CEO/CFO and reduction in
headcount, both during the first quarter of 2019. Research and
development (R&D) expenses for the first quarter of 2020 were
$9,000, compared with $85,000 for the first quarter of 2019.
Operating loss for the first quarter of 2020 was $1.5 million, a
62% improvement from $4.1 million for the first quarter of
2019.
Non-cash gain on the change of fair value of warrant liability
for the first quarter of 2020 was $137,000, compared with a
non-cash loss of $57,000 for the first quarter of 2019.
Other expense, consisting primarily of interest expense, was
$186,000 for the first quarter of 2020 compared with $60,000 for
the first quarter of 2019. The increase was a result of debt issued
during the first quarter of 2019, which was outstanding for the
entire first quarter of 2020.
The net loss attributed to common stockholders for the first
quarter of 2020 was $1.6 million, or $0.06 per share, compared with
a net loss for the first quarter of 2019 of $4.2 million, or $0.25
per share.
NovaBay reported cash and cash equivalents of $5.7 million as of
March 31, 2020, compared with $6.9 million as of December 31,
2019.
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 800-608-8202 from
within the U.S. or 702-495-1913 from outside the U.S., with the
conference identification number 7080709.
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 11:59 p.m. Eastern time May 28, 2020 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
7080709.
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, CELLERX® for the aesthetic
dermatology market and NEUTROPHASE® for the wound care market. The
Aganocide compounds, still under development, have target
applications in the dermatology and urology markets.
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 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, possible regulatory clearance of any of our products or
future 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 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, revenues will not be sufficient to meet the Company’s cash
needs, 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.
Socialize and Stay informed on
NovaBay’s progress
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Website
NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS (in thousands, except par value
amounts)
March 31,
December 31,
2020
2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
5,708
$
6,937
Accounts receivable, net of allowance for
doubtful accounts ($50 and $51 at March 31, 2020 and December 31,
2019, respectively)
952
1,066
Inventory, net of allowance for excess and
obsolete inventory and lower of cost or estimated net realizable
value adjustments ($230 and $247 at March 31, 2020 and December 31,
2019, respectively)
552
492
Prepaid expenses and other current
assets
662
886
Total current assets
7,874
9,381
Operating lease right-of-use assets
1,028
1,252
Property and equipment, net
97
110
Other assets
476
477
TOTAL ASSETS
$
9,475
$
11,220
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
602
$
331
Accrued liabilities
1,326
1,778
Deferred revenue
559
—
Operating lease liabilities
774
930
Notes payable, related party
1,250
1,202
Convertible note
954
1,409
Embedded derivative liability
1
3
Warrant liability
17
34
Total current liabilities
5,483
5,687
Operating lease
liabilities-non-current
406
505
Warrant liability
3,935
4,055
Total liabilities
9,824
10,247
Stockholders' (deficit) equity:
Preferred stock: 5,000 shares authorized;
none issued and outstanding at March 31, 2020 and December 31,
2019
—
—
Common stock, $0.01 par value; 50,000
shares authorized; 28,239 and 27,938 shares issued and outstanding
at March 31, 2020 and December 31, 2019, respectively
282
279
Additional paid-in capital
125,975
125,718
Accumulated deficit
(126,606
)
(125,024
)
Total stockholders' (deficit) equity
(349
)
973
TOTAL LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY
$
9,475
$
11,220
NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (Unaudited) (in thousands except per share data)
Three Months Ended March
31,
2020
2019
Sales:
Product revenue, net
$
1,892
$
1,450
Other revenue, net
—
41
Total sales, net
1,892
1,491
Product cost of goods sold
581
341
Gross profit
1,311
1,150
Operating expenses:
Research and development
9
85
Sales and marketing
1,560
3,531
General and administrative
1,277
1,605
Total operating expenses
2,846
5,221
Operating loss
(1,535
)
(4,071
)
Non-cash gain (loss) on changes in fair
value of warrant liability
137
(57
)
Non-cash gain on changes in fair value of
embedded derivative liability
2
-
Other expense, net
(186
)
(60
)
Loss before provision for income taxes
(1,582
)
(4,188
)
Provision for income taxes
—
(1
)
Net loss and comprehensive loss
$
(1,582
)
$
(4,189
)
Net loss per share attributable to common
stockholders (basic and diluted)
$
(0.06
)
$
(0.25
)
Weighted-average shares of common stock
used in computing net loss per share attributable to common
stockholders (basic and diluted)
27,978
17,093
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005941/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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