NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) announces
that Chief Executive Officer Justin Hall has issued the following
Letter to Stockholders:
To My Fellow Stockholders:
I am pleased to report that we have made solid progress since
the acquisition of DERMAdoctor last November. By combining the two
companies, we have successfully transitioned from a single-product
company to one with a strong presence in both the large and growing
eyecare and skincare markets. Not only have we diversified our
product portfolio, we have gained substantial opportunities for
growth with multiple products in both domestic and international
sales channels.
We strengthened our Avenova franchise in 2021 as more people
than ever purchased our antimicrobial lid and lash spray. Sales of
Avenova spray increased by 15% on 31% growth in the number of units
sold. Importantly, 74% of Avenova spray product revenue came from
non-prescription channels, reflecting the ongoing success of our
consumer marketing initiatives.
Among our strategic growth initiatives for this year is to
introduce innovative, scientifically developed over-the-counter
products under both the Avenova brand and various DERMAdoctor
collections. To date, we have already introduced three new
products. All of our product launches are being executed under our
low-cost model, allowing us to test market acceptance before
committing a large investment.
In January we expanded our Avenova product portfolio with the
launch of lubricating eye drops. These new eye drops were designed
to provide immediate relief of irritated, gritty, scratchy or
blurry eyes with a mode of action that is novel to the eyecare
market. While effective as a standalone treatment, these drops
combine with Avenova Warm Eye Compress and Avenova spray to become
our “science for sore eyes” three-step daily regimen for the
at-home management of dry eye. Like other Avenova products, these
new eye drops are available on Amazon.com and Avenova.com, and are
offered for resale by eyecare specialists through our physician
dispensed channel.
More recently we launched two products within the DERMAdoctor
Calm Cool + Corrected collection. Both products were created by our
new Chief Product Officer Dr. Audrey Kunin, a board-certified
dermatologist and founder of DERMAdoctor. This collection is
specifically formulated to hydrate and repair challenged, dry,
eczema-prone skin. The first new product is a hyaluronic acid
moisture recovery serum that is uniquely formulated with vitamin C,
dragon fruit and water-binding cactus botanicals to restore natural
hydration to parched skin. Our newest launch is a hydrating
cleansing oil, a soap-free and pH-balanced product designed to
moisturize skin and remove makeup while keeping the skin hydrated.
Both products are available on Amazon.com and dermadoctor.com.
Importantly, several more products are under development or are
being prepared for commercial launch. Our focus is to create
science-based, problem-solving accessible skin solutions for the
improved well-being of everyone.
Beyond our product pipeline, we have opportunities for growth by
expanding the marketing and distribution of our current products.
The combined Avenova and DERMAdoctor teams bring NovaBay extensive
expertise in developing robust social media programs and a strong
marketing presence across all digital channels, allowing consumers
to engage with our brands through social media and influencer
campaigns. Among these, we are building upon Audrey’s established
position as a skincare key opinion leader through interviews with
popular online publications such as Glam.com, Cosmopolitan.com,
CNN.com and MarieClaire.com. You may also have seen Audrey as a
recent guest on QVC programs “Cheers! to shopping with Leah and
Shawn” and “Get Ready, Gorgeous with Ali” featuring our DERMAdoctor
Calm Cool + Corrected 1% Colloidal Oatmeal Eczema + Dermatitis
Clinical Repair Balm. Due to the popularity and success of her
appearances, Audrey is expected to make additional QVC appearances
this year.
We also are expanding marketing activities outside the United
States. We recently engaged a premier Chinese marketing firm to
drive consumer sales of DERMAdoctor products in the vast China
market. In March, our new partner began managing DERMAdoctor’s
flagship store on Tmall.com, which is the leading
business-to-consumer online retailer in China. Social media
platforms like TikTok are effective ways to attract new customers
in China, and our marketing partner brings an extensive network of
bloggers and influencers, along with strong social media brand
building capabilities. Additionally, we are looking at ways to
leverage our network of international distributors and retailers to
further sales of NovaBay products throughout the world.
Another synergy from the DERMAdoctor acquisition is the ability
to combine warehouse operations. All orders for Avenova placed
through our website are now being fulfilled by DERMAdoctor’s
facility in Kansas City. This provides both a cost savings and
gives us greater control over our product fulfillment and supply
chain at a time when many companies have struggled with supply
chain issues and the related effect on inflation and margins. I am
pleased to report that to date NovaBay has experienced only minor
supply chain disruptions, limiting the inflationary impact on our
business from issues outside of our control. Among these issues
beyond our control is Amazon’s recent decision to raise vendor
fees, which is resulting in minor pressure on our margins. To
mitigate any negative impact, we will likely need to modestly
increase our product prices to support margins in this high
inflation environment.
There is plenty of opportunity for us to expand into new
addressable markets for certain existing products, and later this
year we plan to enter an entirely new market that leverages our
full expertise. Up until now, Avenova has been focused on the dry
eye market. Many women are turning to eyelash extensions to enhance
their appearance while eliminating the need for mascara, which can
cause their natural lashes to fall out permanently, as well as
increasing the risk of irritation and infection. We know our pure
hypochlorous acid, antimicrobial Avenova spray can be a real
benefit to many consumers in this marketplace. This is a
significant new commercial opportunity as the global lash extension
market is primed for rapid growth with a projected 7.6% growth rate
through 2031, reaching $2.4 billion in sales that year. Moving into
this market will be our first time integrating eyecare and beauty,
which will allow for cross-selling opportunities afforded by a
demographic overlap with DERMAdoctor customers.
In closing, I reiterate my enthusiasm for NovaBay’s future. We
are executing on a focused strategy aimed at creating a stronger
company with faster topline growth and expanded footprints in the
eyecare and skincare markets. We have significant initiatives
underway to augment current product sales and accelerate our
growth. Given the timing of our initiatives, we expect the majority
of our growth in 2022 will come in the second half of the year.
Thankfully, with no major debt instruments, we are unencumbered by
rising interest rates as we pursue a clear path to
profitability.
As a stockholder of NovaBay, you should have received your proxy
information in the mail or via email. I urge you to vote your
shares and invite you to join our virtual 2021 Annual Meeting of
Stockholders being held May 11, 2022 at 11:00 a.m. Pacific time.
Instructions on how to vote and how to participate in the meeting
are included in the proxy.
We have an ambitious agenda in front of us and I am confident
that we can capitalize on our transformed company to achieve our
business and financial goals. I want to thank you, our
stockholders, for your continued support of NovaBay.
Sincerely,
Justin Hall, Esq. Chief Executive Officer and General Counsel
April 25, 2022
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
DERMAdoctor is a premium skincare brand offering more than 30
dermatologist-developed skincare products sold through traditional
domestic retailers, digital beauty channels and international
distributors.
NovaBay Pharmaceuticals Forward-Looking Statements
Except for historical information herein, matters set forth in
this press release may be 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, current product offerings, marketing efforts, and any
future revenue that may result from selling such 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 integration of DERMAdoctor’s
operations into the Company’s business, 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 and Registration Statement on Form S-1 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.
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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
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version on businesswire.com: https://www.businesswire.com/news/home/20220425005111/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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