Full Press Release Details
Third Quarter and Recent Operational and Financial Highlights
NovaBay reports financial results for the three and nine months ended September 30, 2015. Highlights of the third quarter of 2015 and recent weeks include:
Third Quarter 2015 Financial Results
NovaBay reported total net sales of $1.2 million for the third quarter of 2015, up from $152,000 for the third quarter of 2014. The increase was due to growing 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 third quarter of 2015 reached $1.1 million, up from $90,000 for the third quarter of 2014. Other revenue for the third quarter of 2015 was $64,000, compared with $62,000 for the prior-year period. Gross margin as a percentage of total net sales increased to 78% for the third quarter of 2015, up from 72% for the prior-year period.
The net loss for the third quarter of 2015 was $5.2 million, or $0.07 per share, compared with a net loss of $4.2 million, or $0.08 per share, for the third quarter of 2014. The larger net loss reflects higher spending on sales and marketing for Avenova, partially offset by lower spending on research and development due to clinical activities that were completed in 2014. Research and development expenses were $1.9 million and sales, general and administrative expenses were $4.4 million for the third quarter of 2015, compared with $2.3 million and $1.9 million, respectively, for the same period last year.
Nine Month 2015 Financial Results
For the nine months ended September 30, 2015, total net sales increased by $2.2 million to $2.7 million from $563,000 in the first nine months of 2014. Product revenue for the first nine months of 2015 reached $2.6 million compared with $299,000 for the nine months ended September 30, 2014. Other revenue for the first nine months of 2015 was $187,000, compared with $264,000 for the prior-year period. Gross margin as a percentage of total sales increased to 76% from 66% for the first nine months of 2014.
The net loss for the first nine months of 2015 was $14.8 million, or $0.23 per share, compared with a net loss of $10.7 million, or $0.22 per share, for the first nine months of 2014. Net loss in the first nine months of 2015 reflected higher spending on sales and marketing activities for Avenova, partially offset by lower spending on research and development. Research and development expenses were $4.8 million and sales, general and administrative expenses were $12.1 million for the nine months ended September 30, 2015, compared with $7.1 million and $5.3 million, respectively, for the prior-year period.
Cash, cash equivalents and short-term investments were $3.4 million as of September 30, 2015, compared with $5.4 million as of December 31, 2014. The company used approximately $4.1 million in cash to fund operations during the third quarter of 2015. In October 2015, NovaBay announced a public offering that raised net proceeds of $2.3 million. Although the company recently completed this public offering, it will require additional capital to fund its operations in 2016. To achieve this, NovaBay intends to continue its historical financing strategy to raise additional capital to fund its operations and meet ongoing obligations, with the intention of becoming cash flow positive by December 2016. There is, however, no assurance that the Company will be able to raise capital or that if it is able to raise capital, it will be on terms favorable to the Company and its shareholders.
NovaBay management will host an investment community conference call today, November 19, 2015, beginning at 8:30 a.m. Eastern time, 5:30 a.m. Pacific time, to discuss the company's restructuring and financial results, and to 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. with the conference identification number 74214482.
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 call completion through 8:59p.m. Eastern time December 3, 2015, 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 74314482.
About NovaBay Pharmaceuticals, Inc.: Going Beyond Antibiotics
NovaBay Pharmaceuticals is a biopharmaceutical company focusing on the commercialization of prescription Avenova Lid and Lash Cleanser for the eye care market. Avenova is formulated with Neutrox , which is cleared by the U.S. Food and Drug Administration (FDA) as a 510(k) medical device. Neutrox is NovaBay's pure hypochlorous acid. Laboratory tests show that hypochlorous acid has potent antimicrobial activity in solution yet is non-toxic to mammalian cells and it also neutralizes bacterial toxins. Avenova is marketed to optometrists and ophthalmologists throughout the U.S. by NovaBay's direct medical salesforce. It is accessible from more than 90% of retail pharmacies in the U.S. through agreements with McKesson Corporation, Cardinal Health and AmeriSource Bergen.
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 Africa and the Middle East), Sarmedic Ltd. (Israel) and Alpha Pharma LLC (the Ukraine).
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, the ability to raise capital, and the company's expected future financial results. Forward-looking statements can be identified with words like (and variations of): "estimate," "believe," and "intend". 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 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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For NovaBay Avenova purchasing information, please contact:
Call us: 1-800-890-0329
| From the Company | Investor Contact |
| Thomas J. Paulson | LHA |
| Chief Financial Officer | Jody Cain |
| 510-899-8809 | 310-691-7100 |
| Contact Tom | Jcain@lhai.com |
NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| (in thousands, except per share data) | (unaudited) | (audited) | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,383 | $ | 5,429 | ||||
| Accounts receivable | 543 | 273 | ||||||
| Inventory | 1,583 | 521 | ||||||
| Prepaid expenses and other current assets | 668 | 729 | ||||||
| Total current assets | 6,177 | 6,952 | ||||||
| Property and equipment, net | 359 | 436 | ||||||
| Other assets | 154 | 149 | ||||||
| TOTAL ASSETS | $ | 6,690 | $ | 7,537 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Liabilities: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,870 | $ | 1,865 | ||||
| Accrued liabilities | 1,006 | 1,055 | ||||||
| Deferred revenue | 378 | 425 | ||||||
| Total current liabilities | 4,254 | 3,345 | ||||||
| Deferred revenues - non-current | 2,022 | 2,000 | ||||||
| Deferred rent | 187 | 171 | ||||||
| Warrant liability | - | 173 | ||||||
| Total liabilities | 6,463 | 5,689 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at September 30, 2015 and December 31, 2014 | - | - | ||||||
| Common stock, $0.01 par value; 240,000 shares authorized at September 30, 2015 and 65,000 shares at December 31, 2014; 74,618 and 51,640 issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 746 | 516 | ||||||
| Additional paid-in capital | 85,797 | 72,879 | ||||||
| Accumulated deficit | (86,316 | ) | (71,547 | ) | ||||
| Total stockholders' equity | 227 | 1,848 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 6,690 | $ | 7,537 |
NOVABAY PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Sales: | ||||||||||||||||
| Product Revenue | $ | 1,136 | $ | 90 | $ | 2,559 | $ | 299 | ||||||||
| Other Revenue | 64 | 62 | 187 | 264 | ||||||||||||
| Total Net Sales | 1,200 | 152 | 2,746 | 563 | ||||||||||||
| Product Cost of Goods Sold | 269 | 42 | 670 | 189 | ||||||||||||
| Gross Profit | 931 | 110 | 2,076 | 374 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research & development | 1,920 | 2,312 | 4,806 | 7,078 | ||||||||||||
| Sales, general & administrative | 4,359 | 1,911 | 12,138 | 5,273 | ||||||||||||
| Total Operating Expenses | 6,279 | 4,223 | 16,944 | 12,351 | ||||||||||||
| Operating Loss | (5,348 | ) | (4,113 | ) | (14,868 | ) | (11,977 | ) | ||||||||
| Non-cash gain(loss) on changes in FMV of Warrants | 139 | (104 | ) | 173 | 1,213 | |||||||||||
| Other income(expense), net | (31 | ) | (2 | ) | (64 | ) | 48 | |||||||||
| Loss before provision for income taxes | (5,240 | ) | (4,219 | ) | (14,759 | ) | (10,716 | ) | ||||||||
| Provision for income tax | (2 | ) | - | (10 | ) | (10 | ) | |||||||||
| Net loss | (5,242 | ) | (4,219 | ) | (14,769 | ) | (10,726 | ) | ||||||||
| Change in Unrealized gains (losses) on available for sale securities | - | 3 | - | 6 | ||||||||||||
| Comprehensive loss | $ | (5,242 | ) | $ | (4,216 | ) | $ | (14,769 | ) | $ | (10,720 | ) | ||||
| Loss per share (basic and diluted) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.23 | ) | $ | (0.22 | ) | ||||
| Basic & Diluted Shares | 74,643 | 50,821 | 64,951 | 48,995 |