NovaBay Pharmaceuticals Announces Agreement to Sell its DERMAdoctor Skincare Business Segment; Announces Preliminary Financial Results for Fourth Quarter and Year Ended December 31, 2023
March 14 2024 - 8:00AM
Business Wire
DERMAdoctor sale reduces operating expenses and
bolsters cash
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY), a company
developing and commercializing high-quality eyecare and wound care
products, announces that the Company has entered into an agreement
to sell its DERMAdoctor® skincare business including all product
inventory for approximately $1.0 million in cash. NovaBay expects
to close the transaction before the end of the first quarter of
2024 and provide certain transitional services for the next 90
days.
“This sale will reduce our quarterly operating expenses and
provide us with much-needed cash during this challenging capital
market environment. It also streamlines our business by placing us
in a better position to pursue new strategic opportunities that
have greater potential for growth,” said Justin Hall, CEO of
NovaBay.
“We expanded our product lineup in the direct-to-consumer market
during the height of COVID-19 with the expectation that growth in
eCommerce sales would continue post-pandemic,” he added.
“Unfortunately, our projections for DERMAdoctor sales and
profitability were not realized. This divestiture aligns with our
strategy of executing on more promising transactions that involve
our core Avenova® business such as our recently announced
co-promotion partnership with Eyenovia.”
On March 13, 2024, NovaBay announced an agreement to market
Eyenovia’s recently FDA-approved clobetasol propionate ophthalmic
suspension 0.05%, a steroid indicated for the treatment of
inflammation and pain following ocular surgery, through its U.S.
physician-dispensed channel and for Eyenovia to market NovaBay’s
prescription Avenova Antimicrobial Lid & Lash Solution through
its sales representatives strategically located across the U.S.
Included within the upcoming Company Annual Report on Form 10-K
for the year ended December 31, 2023, NovaBay expects to report net
sales for the fourth quarter of 2023 of $3.7 million, consisting of
$0.9 million from its DERMAdoctor skincare segment and $2.8 million
from its eyecare and wound care segment. Operating loss for the
fourth quarter of 2023 is expected to be approximately $3.2
million, due primarily to the $2.7 million loss in the DERMAdoctor
skincare segment. The DERMAdoctor skincare segment loss includes a
$2.5 million non-cash impairment of goodwill and indefinite lived
and long-lived assets related to the business segment. Cash used in
operating activities for the consolidated company for the fourth
quarter of 2023 was $0.3 million.
Also, included within the upcoming Company Annual Report on Form
10-K for the year ended December 31, 2023, NovaBay expects to
report net sales for the 2023 fiscal year of $14.7 million,
consisting of $3.6 million from its DERMAdoctor skincare segment
and $11.1 million from its eyecare and wound care segment.
Operating loss for the 2023 fiscal year is expected to be
approximately $7.4 million, which includes a $3.8 million loss in
the DERMAdoctor skincare segment. The DERMAdoctor skincare segment
loss includes a $2.5 million non-cash impairment of goodwill and
indefinite lived and long-lived assets related to the business
segment.
NovaBay’s cash as of December 31, 2023 was $3.1 million. NovaBay
had $1.1 million in outstanding convertible notes, net as of
December 31, 2023. As of March 12, 2024, there were 30,098,150
shares of NovaBay’s common stock outstanding.
The Company plans to report 2023 fourth quarter and full year
financial results and to hold an investment community conference
call in the coming weeks. Details regarding this call will be made
available.
About Avenova
NovaBay’s leading product Avenova® Antimicrobial Lid & Lash
Solution is often prescribed by eyecare professionals for
blepharitis and dry-eye disease and is available directly to
consumers through online distribution channels such as Amazon.com.
It is clinically proven to kill a broad spectrum of bacteria to
help relieve the symptoms of bacterial dry eye, yet is
non-irritating and completely safe for regular use. NovaBay offers
a full portfolio of scientifically developed products for each step
of the standard dry eye treatment regimen, including the Avenova
Eye Health Support antioxidant-rich oral supplement, Avenova
Lubricating Eye Drops for instant relief, Avenova Warm Eye Compress
to soothe the eyes and the i-Chek by Avenova to monitor physical
eyelid health. The Avenova Allograft, an amniotic tissue
prescription-only product, is available through eyecare
professionals in the United States.
About NovaBay Pharmaceuticals, Inc.:
NovaBay Pharmaceuticals, Inc. develops and sells scientifically
created and clinically proven eyecare and wound care products.
Manufactured in the U.S., Avenova Antimicrobial Lid & Lash
Solution is formulated with NovaBay's patented, proprietary, stable
and pure form of hypochlorous acid. NovaBay also manufactures and
sells effective, yet gentle and non-irritating wound care products.
The PhaseOne® brand is distributed through commercial partners in
the U.S. for professional use only, and the NeutroPhase® brand is
distributed in China by China Pioneer Pharma Holdings, Limited.
More information about NovaBay is available here.
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. These forward-looking statements are based upon
management’s current expectations, assumptions, estimates,
projections and beliefs and include, but are not limited to,
statements regarding our potential sale of DERMAdoctor, current
revenue sources, and expected future revenue, as well as generally
the Company’s expected future financial results. These statements
involve 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, and the possibility that the Company’s revenues will not
be sufficient to meet the Company’s cash needs, the potential
inability of the Company to successfully complete its financing
initiatives (including any related stockholder or regulatory
approvals) or continue operating as a going concern, the Company’s
potential inability to close the sale of DERMAdoctor within our
expected timeframe, if at all, and the Company’s inability to
maintain the listing of its common stock on the NYSE American.
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 Annual and Quarterly Reports on Form 10-K and
Form 10-Q. 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
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version on businesswire.com: https://www.businesswire.com/news/home/20240314399409/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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