NovaBay Pharmaceuticals Reports 2015 Second Quarter Financial Results

Avenova sales increase 73% from the first quarter of 2015

Activities underway to increase the direct sales force

Conference call begins today at 4:30 p.m. Eastern time

EMERYVILLE, Calif.--()--NovaBay® Pharmaceuticals, Inc. (NYSE MKT: NBY), a biopharmaceutical company commercializing and developing topical non-antibiotic antimicrobial products for the global eye care market, today reported financial results for the three months and six months ended June 30, 2015, and provided a business update.

“Avenova is demonstrating the ability to effectively manage the chronic eyelid conditions of blepharitis and dry eye syndrome that afflict about 30 million Americans. Many patients who have suffered for years from inflammation, itchiness and other symptoms are reporting relief in as little as two weeks with our product.”

Quarterly and Recent Operational and Financial Highlights

  • Grew sales of Avenova Lid and Lash Cleanser by 73% to $806,000 in the second quarter of 2015 over the first quarter of 2015.
  • Reported record quarterly total net sales of $1.0 million.
  • Received 510(k) clearance from the U.S. Food and Drug Administration (FDA) to market its new high-tech device, intelli-Case™, for safely disinfecting contact lenses with hydrogen peroxide.
  • Raised $6.86 million in “at market” private placement.

“We are pleased by the enthusiastic reception Avenova with Neutrox is receiving, with the number of prescribing physicians and patients reorders increasing with each passing month,” said Ron Najafi, Ph.D., President and CEO of NovaBay. “Avenova is demonstrating the ability to effectively manage the chronic eyelid conditions of blepharitis and dry eye syndrome that afflict about 30 million Americans. Many patients who have suffered for years from inflammation, itchiness and other symptoms are reporting relief in as little as two weeks with our product.

“Avenova is the only lid and lash hygiene product with Neutrox, our proprietary, pure hypochlorous acid, and it contains no soap or bleach impurities. We believe this is a clear product advantage in a significantly large market. As such, we are only beginning to build a foundation with an exceptional product in a very large and promising market.”

Glenn Moro, NovaBay’s Vice President of Avenova Sales and Marketing, said, “In light of these encouraging sales trends, we are now moving forward on our plans to expand our sales organization and increase the number of direct medical representatives promoting Avenova from 35 to 50 by the end of September. We are already actively recruiting and are encouraged with the talent pool we are screening for our new positions.”

Second Quarter 2015 Financial Results

NovaBay reported total revenue of $1.0 million for the second quarter of 2015, up from $123,000 for the second quarter of 2014. The increase was due to the sales of Avenova, which was commercially launched in August 2014, partially offset by a decrease in collaboration revenue. Product revenue (including sales of Avenova and NeutroPhase®) for the second quarter of 2015 reached $931,000 from $21,000 for the three months ended June 30, 2014. Other revenue for the second quarter of 2015 was $77,000, compared with $102,000 for the prior-year period.

The net loss for the second quarter of 2015 was $4.9 million, or $0.07 per share, compared with a net loss of $2.9 million, or $0.06 per share, for the second quarter of 2014. The higher net loss reflects higher spending on sales and marketing activities for Avenova, partially offset by lower spending on research and development due to clinical activities underway in 2014. Research and development expenses were $1.3 million and sales, general and administrative expenses were $4.3 million for the second quarter of 2015, compared with $2.2 million and $1.7 million, respectively, for the same period last year.

Six Month 2015 Financial Results

For the six months ended June 30, 2015, total revenue increased by $1.1 million to $1.5 million from $411,000 in the first six months of 2014. Product revenue for the first six months reached $1.4 million from $209,000 in the six months ended June 30, 2014. Other revenue for the first six months of 2015 was $123,000, compared with $202,000 for the prior-year period.

The net loss for the first six months of 2015 was $9.5 million, or $0.16 per share, compared with a net loss of $6.5 million, or $0.14 per share, for the first six months of 2014. Net loss in the first six months of 2015 reflected higher spending on sales and marketing activities for Avenova, partially offset by lower spending on research and development. Research & development expenses were $2.9 million and sales, general and administrative expenses were $7.7 million for the six months ended June 30, 2015, compared with $4.8 million and $3.4 million, respectively, for the prior-year period.

Cash, cash equivalents and short-term investments were $7.2 million as of June 30, 2015, compared with $5.4 million as of December 31, 2014. In May 2015, the Company announced an “at market” private placement raising proceeds of $6.86 million

Conference Call

NovaBay management will host an investment community conference today, August 13, 2015, beginning at 4:30 p.m. Eastern time, 1:30 p.m. Pacific time, to discuss financial results, provide a company update, and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 866-880-4999 from within the U.S. or 702-495-1913 from outside the U.S.

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 for 48 hours, beginning two hours after call completion, 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 82923703.

About NovaBay Pharmaceuticals, Inc.: Going Beyond Antibiotics®

NovaBay Pharmaceuticals 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, cleared by the US FDA as 510(k) medical device; the NEUTROX™ Family of Products includes AVENOVA™ for the eye care market and NEUTROPHASE® for wound care, , and CELLERX™ for the cosmetic surgery and aesthetic dermatology market; and its AGANOCIDE® compounds, led by AURICLOSENE™ which is in development as a new drug in urology and dermatology. NovaBay is partnered in the U.S. and around the globe with: PBE, Inc. (USA), IHT, Inc. (USA), Galderma (France), Virbac (France), China Pioneer Pharma (China and Southeast Asia), Shin Poong Pharmaceuticals (South Korea), Biopharm (North Africa and Middle East), Sarmedic Ltd (Israel) and Alpha Pharma LLC (Ukraine).

NovaBay has partnerships in the U.S. and around the world with PBE, Inc. (U.S.), IHT, Inc. (U.S.), Galderma (France), Virbac (France), China Pioneer Pharma (China and Southeast Asia), Shin Poong Pharmaceuticals (South Korea), Biopharm (North African and the Middle East), Sarmedic Ltd (Israel) and Alpha Pharma LLC (the Ukraine).

In June 2015 NovaBay announced FDA clearance of intelli-Case™, an innovative, easy-to-use device for safely disinfecting soft and rigid gas permeable (RGP) contact lenses with hydrogen peroxide.

Forward-Looking Statements

This release contains forward-looking statements, which are based upon management's current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding the anticipated market acceptance of our products, future sales of our products, and the company’s expected future financial results. Forward-looking 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 difficulties or delays in manufacturing, distributing, and selling the company's products, unexpected adverse side effects or inadequate therapeutic efficacy of our product, the uncertainty of patent protection for the company's intellectual property, and the company's ability to obtain additional financing as necessary. 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-K and Form 10-Q 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.

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NovaBay Contacts

For NovaBay Avenova purchasing information, please contact:
Email us
Call us: 1-800-890-0329
www.Avenova.com

 

NOVABAY PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

 
June 30, December 31,
  2015     2014  

(in thousands, except per share data)

(unaudited)

 

ASSETS
Current assets:
Cash and cash equivalents $ 7,208 $ 5,429

Short-term investments

--

--

Accounts receivable 389 273
Inventory 1,452 521
Prepaid expenses and other current assets   597     729  
Total current assets 9,646 6,952
Property and equipment, net 375 436
Other assets   153     149  
TOTAL ASSETS $ 10,174   $ 7,537  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current liabilities:
Accounts payable $ 1,777 $ 1,865
Accrued liabilities 764 1,055
Deferred revenue   220     425  
Total current liabilities 2,761 3,345
Deferred revenues - non-current 2,189 2,000
Deferred rent 181 171
Warrant liability   139     173  
Total liabilities   5,270     5,689  
 
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at September 30, 2014 and December 31, 2013
Common stock, $0.01 par value; 120,000 shares authorized at June 30, 2015 and 65,000 shares and December 31, 2014; 73,642 and 51,640 issued and outstanding at June 30, 2015 and December 31, 2014, respectively 736 516
 
Additional paid-in capital 85,242 72,879
Accumulated other comprehensive loss
Accumulated deficit   (81,074 )   (71,547 )
Total stockholders' equity   4,904     1,848  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,174   $ 7,537  
 

NOVABAY PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

 
  Three Months Ended   Six Months Ended
June 30, June 30,

(in thousands, except per share data)

  2015     2014     2015     2014  
Sales:
Product Revenue $ 931 $ 21 $ 1,423 $ 209
Other Revenue   77     102     123     202  
Total Net Sales 1,008 123 1,546 411
 
Product Cost of Goods Sold   253     18     401     148  
Gross Profit 755 105 1,145 263
 
Research & development 1,245 2,238 2,886 4,766
Sales, general & administrative   4,369     1,653     7,779     3,361  
Total Operating Expenses   5,614     3,891     10,665     8,127  
Operating Loss (4,859 ) (3,786 ) (9,520 ) (7,864 )
 
Non cash gain(loss) on changes in FMW of Warrants 797 34 1,317
Other income (expense), net   (22 )   57     (33 )   50  
 
Loss before provision for income taxes (4,881 ) (2,932 ) (9,519 ) (6,497 )
Provision for income tax   (6 )   (10 )   (8 )   (10 )
Net loss (4,887 ) (2,942 ) (9,527 ) (6,507 )
 
Change in Unrealized gains (losses) on available for sale securities               2  
Comprehensive loss $ (4,887 ) $ (2,942 ) $ (9,527 ) $ (6,505 )
 
 
Loss per share (basic and diluted) $ (0.07 ) $ (0.06 ) $ (0.16 ) $ (0.14 )
 
 
Basic & Diluted Shares 66,331 50,767 60,384 48,607

Contacts

From the Company
Thomas J. Paulson
Chief Financial Officer
510-899-8809
Contact Tom
or
Investor Contact
LHA
Jody Cain
310-691-7100
Jcain@lhai.com

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