NovaBay Pharmaceuticals Provides Third Quarter 2012 Financial Results
Enrollment Continues to Advance in Three Phase 2b Clinical Trials for Conjunctivitis, Impetigo and UCBE
- Global Phase 2b clinical study of lead Aganocide® NVC-422 for impetigo initiated triggering $2.6 million from partner Galderma
- Enrollment continues in conjunctivitis trial at 15 U.S. clinical sites; Brazil and India segments scheduled to start enrollment by year end
- Expanded commercial partnership with partner Pioneer Pharma for NeutroPhase® in Southeast Asian markets
- Presented case study of NeutroPhase® for treatment of necrotizing fasciitis (flesh-eating bacteria) at the 2012 Fall Symposium on Advanced Wound Care
- Received additional FDA 510(k) clearance for NeutroPhase® under widened indications and for administration by spray pump
EMERYVILLE, Calif., Nov. 1, 2012 (GLOBE NEWSWIRE) -- NovaBay Pharmaceuticals, Inc. (NYSE MKT:NBY), a biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with first-in-class compounds such as its proprietary Aganocides®, today reported third quarter financial results for the period ended September 30, 2012.
Dr. Ron Najafi, Chairman and CEO, remarked, "Thanks in large part to the groundwork we have been laying over the past few years, we are now involved in three ongoing Phase 2b trials studying our lead Aganocide® compound, NVC-422. We are pleased with the progress being made in each of our areas of focus for NVC-422: dermatology, ophthalmology, and urology. Results are anticipated for each of these programs in 2013. Further, the additional FDA 510(k) clearance for our wound care product, NeutroPhase®, gives surgeons greater flexibility in the management of graft and donor-site surgical procedures."
Dr. Najafi concluded, "Given the recent influx of capital, NovaBay was cash flow positive for the third quarter. We will continue to prudently deploy our resources to fund our ongoing Phase 2b trials."
Third Quarter Financial Results
As of September 30, 2012, the Company's cash, cash equivalents and short-term investments totaled $11.9 million, compared to $14.1 million at the end of 2011 and $10.4 million as of June 30, 2012. This increase in cash on a sequential quarter basis was primarily attributable to the $2.6 million payment received from NovaBay's partner Galderma S.A. It was partially offset by the Company's two ongoing Phase 2b trials, for conjunctivitis and urinary catheter blockage and encrustation (UCBE), respectively, and by continued support for Galderma's Phase 2b impetigo trial.
NovaBay's license and collaboration revenue for the three and nine months ended September 30, 2012 was $3.6 million and $5.8 million, respectively, compared to $2.8 million and $9.8 million in the corresponding periods in 2011. The increase in the quarter was primarily a result of the payment from Galderma. The decrease in the nine months revenue can be attributed to semi-annual support payments and the termination payment the Company received in 2011 from former partner Alcon.
Research and development expenses increased by 24% to $2.5 million for the three months ended September 30, 2012, and decreased by 7% to $7.2 million for the nine months ended September 30, 2012, compared with the same periods in 2011. The quarterly increase was mainly attributable to the increase in clinical activities as the Company continued its adenoviral conjunctivitis and UCBE trials and provided support for the impetigo trial. The year-ago periods were affected by the termination of the research activities related to Alcon in 2011.
NovaBay expects to incur increasing research and development expenses in 2012 and in subsequent years as it continues to advance its clinical programs in ophthalmology and urology.
General and administrative expenses for the three and nine months ended September 30, 2012 were $1.2 million and $4.1 million, respectively, compared to $1.1 million and $3.9 million in the corresponding periods in 2011.
Net income for the three months ended September 30, 2012 was $80,000, compared to a net income of $106,000 for the same period in 2011. Net loss for the nine months ended September 30, 2012, was $4.7 million, compared to $1.5 million for the same period in 2011. This change was primarily a result of the license and collaboration revenue increase noted above. The 2011 period was affected by the Company's July 2011 financing and the reduction in research and development expenses resulting from the termination of the Alcon agreement in 2011.
2012 Q3 Highlights
- September 2012 - NovaBay Pharmaceuticals (NBY) Receives $2.6 Million from Partner Galderma. NovaBay received $2.6 million from partner Galderma, in association with the advancement of the clinical program for the treatment of impetigo, a highly contagious skin infection caused by common bacteria such as methicillin-resistant Staphylococcus aureus (MRSA).
- September 2012 - Galderma and NovaBay Enroll First Patients in Phase 2b Clinical Study of NVC-422 for Impetigo. The first patients have been enrolled in the Companies' Phase 2b clinical study of a proprietary topical formulation of NVC-422 for the treatment of impetigo. The study is expected to enroll over 300 patients at 24 clinical sites in four countries worldwide and aims to confirm efficacy and evaluate two different dosage regimens.
- September 2012 - NovaBay Pharmaceuticals (NBY) Announces Expansion of Strategic Marketing Agreement for NeutroPhase® in Southeast Asia. NovaBay received an upfront payment of $500,000 from partner Pioneer Pharma, with potential additional milestone payments totaling $200,000. Pioneer also agreed to make a two-tranche equity investment in unregistered and untradeable NovaBay common stock that could reach $5.5 million.
- September 2012 - NovaBay's NeutroPhase® Used in New Therapeutic Technique for Management of Necrotizing Fasciitis. NeutroPhase® Skin and Wound Cleanser, in combination with negative pressure wound therapy (NPWT), was featured in a case study as a new therapeutic technique for the management of necrotizing fasciitis, also known as flesh eating bacteria. The case study titled, "Treatment of Acute Necrotizing Fasciitis Using Adjunctive Pure Hypochlorous Acid," was presented at the 2012 Fall Symposium on Advanced Wound Care (SAWC), in Baltimore, Md.
- September 2012 - NovaBay Pharmaceuticals Co-authors Novel Study Demonstrating Chemical Impact of N-chlorotaurine and NVC-422 on Bacterial Toxins. NovaBay announced data supporting the mechanism of action for its lead Aganocide® compound, NVC-422, against toxins secreted by bacteria such as Escherichia coli (E. coli). The data was presented at the 52nd Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC), in San Francisco on September 12, 2012, in a poster that featured a collaborative study with the Innsbruck Medical University.
- August 2012 - NovaBay Pharmaceuticals Receives Additional FDA 510(K) Clearance for NeutroPhase® Wound Cleanser. The company received an additional 510(k) clearance from the Food and Drug Administration (FDA) to market NeutroPhase® Skin and Wound Cleanser under widened indications, including the moistening and debriding of graft and donor sites. Concurrently, the FDA cleared NeutroPhase to be administered through a new convenient spray pump.
About NovaBay Pharmaceuticals, Inc.
Going Beyond Antibiotics
NovaBay Pharmaceuticals is a biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with its two distinct categories of compounds, Aganocides® and NeutroPhase® Skin and Wound Cleanser. The Company's four core business units, DermaBay, UroBay, EyeBay and MediBay, are developing treatments that tackle infections in the dermatology, urology, ophthalmology, and wound care areas.
NovaBay's first-in-class Aganocide compounds, led by NVC-422, are patented, topical antimicrobials with a broad spectrum of activity against bacteria, viruses and fungi. Mimicking the mechanism of action that human white blood cells use against infections, Aganocides are not subject to bacterial or fungal resistance, which has been demonstrated in in-vitro and in-vivo studies. Having demonstrated clinical efficacy in Phase 2 proof-of-concept clinical studies, NVC-422 is suited to treat and prevent a wide range of local, non-systemic infections. NovaBay's clinical development activities are focused on three disease areas:
- Dermatology - Partnered with Galderma, a leading dermatology company, to develop a formulation of NVC-422 for treatment of highly contagious skin infection, impetigo, which occurs most commonly in children. Clinical data results from the Phase 2b study expected in mid-2013.
- Ophthalmology - NovaBay is developing an eye drop formulation of NVC-422 for treating adenoviral conjunctivitis, a highly contagious viral eye infection for which there is no approved acute treatment. Enrollment into a global Phase 2b clinical study has begun, and clinical data results are expected in the second half of 2013.
- Urology – NovaBay's urinary catheter irrigation solution containing NVC-422 is currently in a Phase 2b study, with the goal of reducing the incidence of urinary catheter blockage and encrustation (UCBE) and associated urinary tract infections. The Company reported positive data from the Phase 2a study and is evaluating the effect of an alternate more potent formulation of NVC-422 in Phase 2b. Results are expected in the first half of 2013.
NeutroPhase is the only pure hypochlorous acid (HOCI) skin and wound cleanser cleared by the U.S. Food and Drug Administration (FDA) to target the six-million-patient U.S. market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers. The saline-based solution is the only wound cleanser on the market to include a stabilized, pure form of HOCl shown in studies to kill bacteria in solution, including flesh-eating bacteria. For additional information, visit: www.neutrophase.com.
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 expected timing of enrollment and commencement of clinical trials, expected timing of announcement of results of clinical studies, and 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 development, clinical trial, regulatory approval, production and marketing of the company's product candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the product candidates, the uncertainty of patent protection for the company's intellectual property or trade secrets, the company's ability to obtain additional financing as necessary and unanticipated research and development and other costs. Other risks relating to NovaBay and Aganocide compounds, 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 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 PHARMACEUTICALS, INC.|
|(A development stage company)|
|CONSOLIDATED BALANCE SHEETS|
|September 30,||December 31,|
|(in thousands, except per share data)||(unaudited)||(Note 2)|
|Cash and cash equivalents||$ 7,219||$ 8,428|
|Prepaid expenses and other current assets||508||417|
|Total current assets||12,516||14,558|
|Property and equipment, net||1,037||1,270|
|TOTAL ASSETS||$ 13,670||$ 15,963|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable||$ 1,051||$ 472|
|Total current liabilities||4,032||2,838|
|Deferred revenues - non-current||208||945|
Common stock, $0.01 par value; 65,000 shares authorized at
September 30, 2012 and December 31, 2011; 29,747 and 28,587
issued and outstanding at September 30, 2012 and December 31,
|Additional paid-in capital||45,137||42,386|
|Accumulated other comprehensive loss||(29)||(44)|
|Accumulated deficit during development stage||(37,961)||(33,284)|
|Total stockholders' equity||7,444||9,344|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$ 13,670||$ 15,963|
|NOVABAY PHARMACEUTICALS, INC.|
|(A development stage company)|
|CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS|
Three Months Ended
Nine Months Ended
from July 1, 2002
|(in thousands, except per share data)||2012||2011||2012||2011||September 30, 2012|
|License and collaboration revenue||$ 3,617||$ 2,762||$ 5,794||$ 9,768||$ 56,393|
|Research and development||2,514||2,023||7,156||7,712||58,027|
|General and administrative||1,234||1,097||4,145||3,930||37,799|
|Total operating expenses||3,748||3,120||11,301||11,642||95,826|
|Operating income (loss)||(106)||(348)||(5,467)||(1,853)||(39,367)|
|Non-cash loss (gain) on change in fair value of warrants||209||453||802||453||70|
|Other income (expense), net||(17)||6||5||(36)||1,426|
|Income (loss) before income taxes||86||111||(4,660)||(1,436)||(37,871)|
|Provision for income taxes||(6)||(5)||(17)||(21)||(90)|
|Net income (loss)||80||106||(4,677)||(1,457)||(37,961)|
|Other comprehensive gain (loss):|
|Change in unrealized gains (losses) on available-for-sale securities||33||(5)||15||5||(29)|
|Total comprehensive income (loss)||$ 113||$ 101||$ (4,662)||$ (1,452)||$ (37,990)|
|Net loss per share:|
|Basic||$ 0.00||$ 0.00||$ (0.16)||$ (0.06)|
|Diluted||$ 0.00||$ 0.00||$ (0.16)||$ (0.06)|
|Shares used in per share calculations:|