Neovasc Announces Second Quarter Financial Results and Provides Corporate Update
August 11 2022 - 4:05PM
via NewMediaWire – Neovasc Inc. (“Neovasc” or the “Company”)
(NASDAQ, TSX: NVCN) today reported financial results for the second
quarter ended June 30, 2022.
Recent Highlights
- Generated revenues of $818,000, a
quarterly record and a year-over-year increase of 29% over the
second quarter of 2021.
- Advanced enrollment in the COSIRA
II trial with 40 patients enrolled and 21 patients randomized
across 10 sites.
- COSIRA II protocol supplement was
approved by the FDA, more than doubling the total number of
patients and adding specific patient groups eligible and allowed
for treatment in the trial.
- Accelerated direct sales in the
United Kingdom as of July 1, 2022 and added Neovasc sales
reps.
- Announced and highlighted an
additional third-party publication supporting the Reducer
device.
“I am very pleased with the progress our team made advancing our
value creation strategies, which resulted in another quarter of
record revenues,” said Fred Colen, President and Chief Executive
Officer. “In Europe, we followed up our successes with
reimbursement by creating a direct sales team in the UK which will
advance Reducer as a viable treatment for refractory angina in that
key market. In the important US market, enrollment in the pivotal
COSIRA II trial is progressing well, and we received more good news
when the FDA approved a protocol supplement which doubles the pool
of eligible patients to be enrolled and studied. We look forward to
equally strong performance in the second half of 2022.”
Financial Results for the Second quarter Ended June 30,
2022
For the three months ended June 30, 2022, revenues increased by
29% to $818,000 compared to revenues of $633,000 for the same
period in 2021.
The cost of goods sold for the three months ended June 30, 2022
was $158,000 compared to $109,000 for the same period in 2021. The
overall gross margin for the three months ended June 30, 2022 was
81% compared to 83% gross margin for the same period in 2021 as we
wrote down some obsolete inventory.
Total expenses for the three months ended June 30, 2022 were
approximately $8.8 million compared to approximately $9.6 million
for the second quarter of 2021, representing a decrease of
approximately $742,000 or 8%, substantially due to a decrease in
non-cash share-based payments, a decrease in the impairment charge
to fixed assets in June 2021, a decrease in employee termination
expenses related to pausing Tiara TF in June 2021, and a decrease
in litigation expenses. These were partially offset by an increase
employee expenses as we accrued for a portion of annual bonuses
that were not accrued, but were incurred, in the prior period, a
one-time distributor transition fee as we moved to a direct sales
force in the United Kingdom, and increased selling expenses as we
initiated activities in new markets.
The operating losses and comprehensive losses for the three
months ended June 30, 2022 were approximately $8.2 million and $9.0
million, respectively, or $3.29 basic and diluted loss per share,
as compared with approximately $9.1 million operating losses and
$9.3 million comprehensive loss, or $3.35 basic and diluted loss
per share, for the same period in 2021.
The Company ended the quarter with approximately $37.6 million
in cash.
As of August 9, 2022, after the effect of the share
consolidation, the Company had 2,743,143 Common Shares issued and
outstanding.
Conference Call and Webcast Information
Interested parties may access the conference call by dialing
(877) 407-9208 or (201) 493-6784 (International) and reference
Conference ID 13730925. Participants wishing to join the call via
webcast should use the link posted on the investor relations
section of the Neovasc website at neovasc.com/investors/. A
replay of the webcast will be available approximately 30 minutes
after the conclusion of the call using the link on the Neovasc
website.
About Neovasc
Neovasc is a specialty medical device company that develops,
manufactures, and markets products for the rapidly growing
cardiovascular marketplace. Its products include Reducer, for the
treatment of refractory angina, which is under clinical
investigation in the United States and has been commercially
available in Europe since 2011, and Tiara™ for the transcatheter
treatment of mitral valve disease, which is currently under
clinical investigation in the United States, Canada, Israel and
Europe. For more information, visit: www.neovasc.com.
NEOVASC INC. |
|
|
Unaudited Condensed Interim Consolidated Statements of Financial
Position |
|
(Expressed
in U.S. dollars) |
|
|
|
|
|
|
June
30, |
December 31, |
2022 |
|
2021 |
|
|
|
|
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
37,631,734 |
|
51,537,367 |
|
Accounts receivable |
1,637,796 |
|
1,369,455 |
|
Finance lease receivable |
- |
|
43,543 |
|
Inventory |
1,265,831 |
|
1,480,077 |
|
Prepaid expenses and other assets |
363,511 |
|
787,734 |
|
Total current assets |
40,898,872 |
|
55,218,176 |
|
|
|
|
Non-current assets |
|
|
Restricted
cash |
466,377 |
|
469,808 |
|
Right-of-use
asset |
310,104 |
|
456,339 |
|
Property and equipment |
197,061 |
|
182,041 |
|
Deferred loss on 2020 derivative warrant
liabilities |
1,795,604 |
|
4,300,484 |
|
Deferred loss on 2021 derivative warrant
liabilities |
8,261,167 |
|
9,898,475 |
|
Total non-current assets |
11,030,313 |
|
15,307,147 |
|
|
|
|
Total assets |
51,929,185 |
|
70,525,323 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
Liabilities |
|
|
Current liabilities |
|
|
Accounts payable and accrued liabilities |
4,018,627 |
|
4,629,163 |
|
Lease liabilities |
215,317 |
|
273,145 |
|
2019 Convertible notes |
- |
|
38,633 |
|
2020 Convertible notes, warrants and derivative
warrant liabilities |
- |
|
40,587 |
|
Total current liabilities |
4,233,944 |
|
4,981,528 |
|
|
|
|
Non-Current Liabilities |
|
|
Lease liabilities |
176,692 |
|
272,652 |
|
2019 Convertible notes |
- |
|
6,548,796 |
|
2020 Convertible notes, warrants and derivative
warrant liabilities |
106,413 |
|
6,088,728 |
|
2021 Derivative warrant liabilities |
48,927 |
|
405,508 |
|
2022 Convertible notes |
11,795,150 |
|
- |
|
Total non-current liabilities |
12,127,182 |
|
13,315,684 |
|
|
|
|
Total liabilities |
16,361,126 |
|
18,297,212 |
|
|
|
|
Equity |
|
|
Share capital |
441,081,488 |
|
439,873,457 |
|
Contributed surplus |
41,841,815 |
|
40,355,952 |
|
Accumulated other comprehensive loss |
(6,229,804 |
) |
(7,885,024 |
) |
Deficit |
(441,125,440 |
) |
(420,116,274 |
) |
Total equity |
35,568,059 |
|
52,228,111 |
|
|
|
|
Total liabilities and equity |
51,929,185 |
|
70,525,323 |
|
|
|
|
NEOVASC INC. |
|
|
|
|
|
Unaudited Condensed Interim Consolidated Statements of Loss and
Comprehensive Loss |
|
|
|
|
For the
three and six months ended June 30, 2022 and 2021 |
|
|
|
|
|
(Expressed
in U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended |
For the Six Months
Ended |
|
30-Jun |
30-Jun |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
REVENUE |
818,060 |
|
633,068 |
|
1,428,807 |
|
1,084,862 |
|
COST
OF GOODS SOLD |
157,927 |
|
109,106 |
|
294,219 |
|
181,499 |
|
GROSS PROFIT |
660,133 |
|
523,962 |
|
1,134,588 |
|
903,363 |
|
|
|
|
|
|
EXPENSES |
|
|
|
|
Selling
expenses |
1,395,275 |
|
832,812 |
|
2,214,171 |
|
1,470,791 |
|
General and
administrative expenses |
3,137,194 |
|
5,042,804 |
|
6,140,724 |
|
10,335,373 |
|
Product
development and clinical trials expenses |
4,341,666 |
|
3,740,887 |
|
7,611,216 |
|
8,362,315 |
|
|
8,874,135 |
|
9,616,503 |
|
15,966,111 |
|
20,168,479 |
|
|
|
|
|
|
OPERATING LOSS |
(8,214,002 |
) |
(9,092,541 |
) |
(14,831,523 |
) |
(19,265,116 |
) |
|
|
|
|
|
OTHER (EXPENSE)/INCOME |
|
|
|
|
Interest and
other income |
51,655 |
|
39,733 |
|
69,618 |
|
49,753 |
|
Interest and
other expense |
(389,425 |
) |
(278,154 |
) |
(739,265 |
) |
(318,563 |
) |
(Loss)/gain
on foreign exchange |
(20,525 |
) |
15,057 |
|
(9,808 |
) |
(20,238 |
) |
Unrealized
gain on warrants, derivative liability |
|
|
|
|
warrants and convertible notes |
612,981 |
|
2,809,340 |
|
461,638 |
|
15,259,393 |
|
Realized
(loss)/gain on exercise or conversion and |
|
|
|
|
extinguishment of warrants, derivative
liability |
|
|
|
warrants and convertible notes |
- |
|
219,307 |
|
(1,845,822 |
) |
(1,895,344 |
) |
|
|
|
|
|
Amortization
of deferred loss |
(1,018,282 |
) |
(2,761,152 |
) |
(2,241,846 |
) |
(5,026,442 |
) |
|
(763,596 |
) |
44,131 |
|
(4,305,485 |
) |
8,048,559 |
|
LOSS
BEFORE TAX |
(8,977,598 |
) |
(9,048,410 |
) |
(19,137,008 |
) |
(11,216,557 |
) |
|
|
|
|
|
Tax
recovery |
- |
|
15,396 |
|
- |
|
16,128 |
|
LOSS
FOR THE PERIOD |
(8,977,598 |
) |
(9,033,014 |
) |
(19,137,008 |
) |
(11,200,429 |
) |
|
|
|
|
|
OTHER COMPREHENSIVE LOSS FOR THE |
|
|
|
|
PERIOD |
Fair market
value changes in convertible notes due to changes in own credit
risk |
- |
|
(280,051 |
) |
(216,938 |
) |
(985,637 |
) |
LOSS AND OTHER COMPREHENSIVE LOSS FOR THE
PERIOD |
|
|
|
|
(8,977,598 |
) |
(9,313,065 |
) |
(19,353,946 |
) |
(12,186,066 |
) |
|
|
|
|
|
LOSS
PER SHARE |
|
|
|
|
Basic and
diluted loss per share |
(3.29 |
) |
(3.35 |
) |
(7.03 |
) |
(4.81 |
) |
|
|
|
|
|
|
Contacts
InvestorsMike CavanaughWestwicke/ICREmail:
Mike.Cavanaugh@westwicke.com
MediaSean LeousWestwicke/ICREmail: Sean.Leous@icrinc.com
Forward-Looking Statement DisclaimerCertain statements in
this news release contain forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995 and applicable Canadian securities laws that may not be based
on historical fact. When used herein, the words expect, anticipate,
estimate, may, will, should, intend, believe, and similar
expressions, are intended to identify forward-looking statements.
Forward-looking statements contained in the news release may
involve, but are not limited to, the expectation that the Company’s
direct sales team will advance Reducer as a viable treatment for
refractory angina in the UK, expectation that the Company will have
an equally strong performance in the second half of 2022 and the
growing cardiovascular marketplace. Forward-looking statements are
based on estimates and assumptions made by the Company in light of
its experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors that the Company believes are appropriate in the
circumstances. Many factors could cause the Company’s actual
results, performance or achievements to differ materially from
those expressed or implied by the forward-looking statements,
including those described in the Risk Factors section of the
Company’s Annual Report on Form 20-F for the year ended December
31, 2021 and in the Management’s Discussion and Analysis for the
three and six months ended June 30, 2022 (copies of which may be
obtained at www.sedar.com or www.sec.gov). These factors should be
considered carefully, and readers should not place undue reliance
on the Company’s forward-looking statements. The Company has no
intention and undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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