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Oculus Innovative
Sciences, Inc.
a healthcare company that designs, produces and
markets innovative, safe and effective anti-infective medical devices while
also developing multiple drug candidates, today provided a market update for
the second half of 2012.
Financial Update/EBITDAS Profitability Expected During FY 2014
Total revenue was $8.6 million in the six months ended September 30, 2012,
compared to $6.6 million in the same period last year with product revenue
growing at 32% over the same period last year. Operating loss minus non-cash
expenses (EBITDAS) for these six months was $235,000 compared to $1.2 million
in the same period last year. If adjusted for one-time severance costs of
$410,000 relating to the transaction with Oculus partner, More Pharma, Oculus
would have been EBITDAS profitable for the first half of FY 2013. The
company's cash position as of September 30, 2012 was $8.3 million.
Oculus management believes the combination of the growing revenue, especially
in the United States, and reduced operating expenses in Mexico, should result
in consistent EBITDAS profitability sometime in fiscal year 2014, excluding
expenses directly related to clinical drug trials. Once realized, Oculus will
then target cash flow breakeven, which will be facilitated by continued
revenue growth and maintenance of reduced cash operating expenses. Management
provided product revenue growth guidance of up to 25% for the full fiscal year
2013, compared to the same period last year.
Revenue Growth
Oculus management anticipates sustainable revenue growth as a result of the
following domestic partnerships:
* U.S. sales of Oculus' dermatology products and expansion of product lines
will provide the greatest near-term revenue boost with revenue growth
guidance of 40% to 60% for full fiscal year 2013.
* Animal healthcare partner, Innovacyn, Inc., provided Oculus with revenue
growth of 36% in the first half of FY 2013. The company has provided
guidance of up to 20% revenue growth for FY 2013.
The company's international sales are expected to grow as a result of
additional drug and device approvals in both India and China in Q4 FY 2013
with commercialization to follow in Q1 FY 2014. Oculus will update guidance as
these initiatives move forward.
Scar Study
Oculus completed patient enrollment for its scar management trial. This trial
is being conducted based on an FDA-reviewed protocol to support the company's
pending FDA 510(k) clearance for management of hypertrophic and keloid scars.
The company expects to announce top line data from this trial in early
calendar year 2013. Upon successful completion of the clinical trial and
anticipated FDA clearance, AmDerma/Quinnova will reimburse Oculus for the cost
of the trial and will introduce another innovative Microcyn-based product into
the U.S. dermatology market. This is part of Oculus' strategy to provide
partners with growing and robust product pipelines for their respective
markets.
Two FY 2013 Licensing Agreements
Oculus' partner, More Pharma, assumed all Microcyn-based product marketing and
sales responsibilities in South America and the Caribbean as of August
2012. In addition to an upfront payment of $5.1 million to Oculus, More
Pharma's 200-person marketing/sales team has assumed all product
marketing/sales in Mexico, while also pursuing further regulatory approvals
and subsequent commercialization in other Latin American countries. Oculus
believes long-term sales will grow at a much greater pace as these regulatory
approvals are secured. More Pharma's 200-person marketing/sales team has
assumed all product marketing/sales in Mexico as of August 2012. As a result
of this successful transition the company eliminated its marketing and sales
team in that region, thus lowering its SG&A expenses by $2.8 million per
annum.
Secondly, Oculus signed a licensing agreement with AmDerma/Quinnova to develop
and commercialize Oculus' novel proprietary Microcyn® Technology drug
compounds for major dermatological conditions, including acne. The exclusive
agreement includes licensing of the dermatology compounds in the United States
and India. The product formulation is nearing finalization. AmDerma/Quinnova
will be responsible for the development costs for the acne formulation as well
as other dermatological compounds.
Future Planned Partnerships
Duplicating the successful blueprint of the FY 2013 partnerships, Oculus is
working to secure a series of CE mark approvals for use of its various product
formulations in the treatment of wounds and dermatology indications. The added
CE mark approvals will provide a significant opportunity for potential
partners to quickly commercialize and penetrate the European markets in FY
2014.
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