- Fourth quarter net product revenue increased 40% on record
Avenova spray unit sales
- 2021 Avenova spray net revenue increased 15% on 31% growth in
unit sales
- 2020 net product revenue boosted by $3.1 million in
non-recurring PPE product sales
- Company executing on growth strategy with DERMAdoctor
acquisition
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three and 12 months ended December 31,
2021 and provides a business update. Financial results include the
operations of the acquired DERMAdoctor business beginning November
5, 2021.
“NovaBay closed out an eventful year on a high note with fourth
quarter net product revenue increasing 40% over the prior-year
period on record Avenova spray unit sales,” said Justin Hall,
NovaBay CEO. “Avenova spray sales for 2021 increased 15% with unit
sales up 31% as more people than ever purchased our antimicrobial
lid and lash spray. Importantly, 74% of Avenova net product revenue
in 2021 was through non-prescription channels, driven by our
innovative direct-to-consumer marketing.
“During the fourth quarter we completed our acquisition of
DERMAdoctor, successfully transforming NovaBay from a
single-product company to one with strong footholds in the large
and growing eyecare and skincare markets. Our focus is firmly on
growing NovaBay and DERMAdoctor product sales through a
multipronged strategy including product diversification and
international distribution,” added Mr. Hall. “Since the start of
2022, we expanded our Avenova product portfolio with lubricating
eye drops that feature a mode of action that’s new to the eyecare
market, and added a newly formulated hydrating hyaluronic acid
serum to our DERMAdoctor Calm Cool + Corrected collection. Both
products are scientifically formulated to be highly effective, yet
gentle, and were launched under our cost-efficient commercial
model. We also engaged a new marketing firm to increase consumer
exposure to DERMAdoctor products in China’s vast online market.
“Our plans to drive continued sales growth feature the
commercialization of new products throughout the year under both
the Avenova and DERMAdoctor brands. Very soon we will be entering a
new, largely untapped segment of the cosmetic eyecare market that
will allow us to capitalize on cross-selling opportunities afforded
by a demographic overlap with DERMAdoctor customers,” said Mr.
Hall. “We are well positioned to execute on these opportunities
with capital resources we believe are sufficient to fund planned
operations for the next year and beyond.”
Fourth Quarter Financial Results
Net product revenue for the fourth quarter of 2021 was $2.6
million, an increase of 40% from the prior-year period, and
consisted of $1.6 million in Avenova spray sales, $0.6 million of
DERMAdoctor product sales, and $0.4 million in sales of PhaseOne®
and NeutroPhase® wound care products and other Avenova branded
products. For the fourth quarter of 2021, total Avenova spray unit
sales increased 13% compared with the prior-year period, with
on-line unit sales increasing 29%. For the fourth quarter of 2020,
net product revenue was $1.9 million, and consisted of $1.5 million
in Avenova sales and $0.4 million in NeutroPhase sales.
Gross margin on net product revenue for the fourth quarter of
2021 was 54%, compared with 57% for the fourth quarter of 2020,
with the decrease primarily due to a reduction in the portion of
net product revenue from the higher margin pharmacy channels.
Operating expenses for the fourth quarter of 2021 were $4.6
million, compared with $2.8 million for the fourth quarter of 2020,
with a majority of the increase due to one-time expenses associated
with the DERMAdoctor acquisition and related financing. Sales and
marketing expenses were $1.9 million, compared with $1.5 million a
year ago, with the increase due to an increase in marketing costs
for Avenova branded products, primarily digital advertising. The
2021 period also includes $0.2 million in DERMAdoctor sales and
marketing costs incurred after completion of the acquisition in the
fourth quarter. These cost increases were partially offset by
savings from a lower number of field sales headcount employed in
the 2021 period. General and administrative (G&A) expenses were
$2.7 million, compared with $1.3 million for the fourth quarter of
2020, with the increase due primarily to nonrecurring costs
associated with the DERMAdoctor acquisition and private placement
financing completed in the fourth quarter of 2021. The 2021 fourth
quarter also includes $0.3 million in DERMAdoctor G&A costs
incurred after completion of the acquisition. Research and
development (R&D) expenses for the fourth quarter of 2021 were
$9 thousand, compared with $36 thousand for the prior-year
period.
Non-cash gain on changes in fair value of warrant liability for
the fourth quarter of 2021 was $4.6 million, compared with a
non-cash gain of $8 thousand for the prior-year period.
Other expense, net for the fourth quarter of 2021 was $1.6
million, representing issuance costs related to the warrants issued
in conjunction with the financing completed in the fourth quarter
of 2021. There was no other income or expense, net recorded for the
fourth quarter of 2020.
Net loss attributable to common stockholders for the fourth
quarter of 2021 was $0.9 million, or $0.02 per share, compared with
net loss attributable to common stockholders for the fourth quarter
of 2020 of $1.8 million, or $0.04 per share.
Full Year Financial Results
Net product revenue for 2021 was $8.4 million, compared with
$9.9 million for 2020. The 2020 period included $3.1 million in
sales of KN95 masks and other PPE products with no comparable
revenue in the 2021 period. Avenova spray sales for 2021 were $6.8
million, a 15% increase from $6.0 million for 2020. Total Avenova
spray unit sales for 2021 increased 31% with on-line unit sales
increasing 45%, both compared with 2020.
Gross margin on net product revenue for 2021 was 67%, compared
with 60% for 2020.
Sales and marketing expenses for 2021 increased by 17% to $7.2
million, G&A expenses increased by 22% to $7.2 million and
R&D expenses decreased by 85% to $44 thousand, all compared
with 2020.
Non-cash gain on the change of fair value of warrants for 2021
was $4.6 million, compared with a non-cash loss on the change of
fair value of warrant liability for 2020 of $5.2 million.
Other expenses, net for 2021 was $1.6 million, compared with
other income, net for 2020 of $0.6 million.
Net loss attributable to common stockholders for 2021 decreased
significantly to $6.6 million, or $0.15 per share, compared with
net loss attributable to common stockholders for 2020 of $11.0
million, or $0.31 per share.
NovaBay had cash and cash equivalents of $7.5 million as of
December 31, 2021, compared with $12.0 million as of December 31,
2020. During 2021 the Company received proceeds from a private
placement financing as well as 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 April 14, 2022 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
1992038.
About NovaBay Pharmaceuticals, Inc:
NovaBay Pharmaceuticals, Inc. is a 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 offering 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
NovaBay’s Progress
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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
DERMAdoctor Purchasing
Information For DERMAdoctor purchasing information:
Please call 877-337-6237 or email service@dermadoctor.com
DERMAdoctor.com
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands except par value
amounts)
December 31,
December 31,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
7,504
$
11,952
Accounts receivable, net of allowance for
doubtful accounts ($0 at December 31, 2021 and December 31,
2020)
1,668
1,106
Inventory, net of allowance for excess and
obsolete inventory and lower of cost or estimated net realizable
value adjustments ($641 and $236 at December 31, 2021 and December
31, 2020, respectively)
3,220
608
Prepaid expenses and other current
assets
778
576
Total current assets
13,170
14,242
Operating lease right-of-use assets
411
436
Property and equipment, net
193
84
Goodwill
4,528
—
Other intangible assets, net
5,200
—
Other assets
476
476
TOTAL ASSETS
$
23,978
$
15,238
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
1,045
$
302
Accrued liabilities
2,092
2,115
Line of credit
105
—
Operating lease liabilities
200
416
Total current liabilities
3,442
2,833
Operating lease
liabilities-non-current
246
87
Warrant liability
9,558
—
Contingent earnout liability
561
—
Total liabilities
13,807
2,920
Commitments & contingencies
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000
shares authorized; 14 and 0 issued and outstanding at December 31,
2021 and December 31, 2020, respectively
680
—
Common stock, $0.01 par value; 100,000 and
75,000 shares authorized, 47,766 and 41,782 shares issued and
outstanding at December 31, 2021 and December 31, 2020,
respectively
478
418
Additional paid-in capital
150,900
147,963
Accumulated deficit
(141,887
)
(136,063
)
Total stockholders' equity
10,171
12,318
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
23,978
$
15,238
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands except per share
data)
Three Months Ended December
31,
Year Ended
December 31,
2021
2020
2021
2020
Sales:
Product revenue, net
$
2,636
$
1,878
$
8,397
$
9,916
Other revenue, net
5
10
24
18
Total sales, net
2,641
1,888
8,421
9,934
Cost of goods sold
1,214
813
2,776
3,970
Gross profit
1,427
1,075
5,645
5,964
Research and development
9
36
44
285
Sales and marketing
1,900
1,498
7,223
6,173
General and administrative
2,713
1,299
7,240
5,932
Total operating expenses
4,622
2,833
14,507
12,390
Operating loss
(3,195
)
(1,758
)
(8,862
)
(6,426
)
Non-cash gain (loss) on changes in fair
value of warrant liability
4,615
8
4,615
(5,216
)
Non-cash gain on changes in fair value of
embedded derivative liability
—
—
—
3
Other (expense) income, net
(1,579
)
—
(1,577
)
605
Loss before provision for income taxes
(159
)
(1,750
)
(5,824
)
(11,034
)
Provision for income taxes
—
(4
)
—
(5
)
Net loss and comprehensive loss
$
(159
)
$
(1,754
)
$
(5,824
)
$
(11,039
)
Less: Preferred deemed dividend
735
—
735
—
Net loss attributable to common
stockholders
$
(894
)
$
(1,754
)
$
(6,559
)
$
(11,039
)
Net loss per share attributable to common
stockholders (basic and diluted)
$
(0.02
)
$
(0.04
)
$
(0.15
)
$
(0.31
)
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock
(basic and diluted)
45,311
41,776
43,657
35,076
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220329005328/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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