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Novus Therapeutics Reports Second Quarter 2018 Financial Results

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Novus Therapeutics, Inc. (NASDAQ:NVUS), a specialty pharmaceutical
company focused on developing products for patients with disorders of
the ear, nose, and throat (ENT), today announced financial results for
the quarter ended June 30, 2018.

"We continue to make progress on the OP-02 development program and look
forward to initiating our clinical program this year," said Gregory J.
Flesher, CEO of Novus Therapeutics, Inc. "We had a productive Type C
meeting with the FDA during this quarter. The FDA confirmed that
development of OP-02 for separate otitis media treatment and prevention
indications would be acceptable. We also obtained guidance on our
planned phase 1 healthy volunteer study and subsequent studies in
patients to support these indications. We look forward to sharing
results from the phase 1 program in 2019."

Second Quarter 2018 Financial Results

For the three-months ended June 30, 2018, Novus reported a net loss of
$3.2 million, or $0.34 per share, compared to a net loss of $6.7
million, or $1.32 per share, for the same period in 2017. For the
six-months ended June 30, 2018, Novus reported a net loss of $6.0
million, or $0.70 per share, compared to a net loss of $8.0 million, or
$2.51 per share, for the same period in 2017. The company had $19.2
million in cash and cash equivalents as of June 30, 2018.

Research and development (R&D) expenses were $1.3 million during the
three-months ended June 30, 2018, compared to $0.5 million for the same
period in 2017. For the six-month ended June 30, 2018, R&D expenses were
$2.4 million, compared to $1.0 million for the same period in 2017. The
increase in R&D expenses for both periods was primarily due to an
increase in formulation development costs for OP-02, consulting
expenses, and hiring of additional R&D employees. We expect R&D expenses
to increase in subsequent periods due to the initiation of multiple
OP-02 clinical trials.

General and administrative (G&A) expenses were $1.9 million during the
three-months ended June 30, 2018, compared to $6.1 million for the same
period in 2017. For the six-month ended June 30, 2018, G&A expenses were
$3.6 million, compared to $7.0 million for the same period in 2017. The
decrease in G&A expenses for both periods was primarily due to
non-recurring merger-related expenses from 2017 and a decrease in rent
expense, partially offset by an increase in insurance, stock-based
compensation, professional fees, and other administrative costs
associated with operating a public company as well as costs related to
the Tokai shareholder litigation.

Anticipated Milestones

  • Q4 2018 – Initiate phase 1 study in healthy adults
    (safety/tolerability)
  • 1H 2019 – Initiate phase 1 study in patients with otitis media with
    effusion (explore efficacy)
  • 1H 2019 – Initiate phase 1 study in patients with acute otitis media
    (explore efficacy)
  • 1H 2019 – Topline data from phase 1 studies

About OP-02

OP-02 is being developed as a potential first-in-class treatment option
for otitis media ("OM"), which is often caused by Eustachian tube
dysfunction ("ETD"). OP-02 is a drug-device combination product
comprised of a proprietary formulation surfactant
(dipalmitoylphosphatidylcholine or "DPPC") and a spreading agent
(cholesteryl palmitate or "CP") suspended in propellant. The product is
administered intranasally via a pressurized metered- dose inhaler
("pMDI") and is intended to be used to restore the normal physiologic
activity of the Eustachian tube ("ET"), which is the small tube that
connects the middle ear to the back of the nasopharynx. Together DPPC
and CP are designed to effectively absorb to the air-liquid interface of
the mucosa and reduce the interfacial surface tension of the ET, which
reduces passive pressure required for the ET to open. In other words,
OP-02 is intended to promote ‘de-sticking' of the ET so that ventilation
and drainage of the middle ear may occur.

About Novus Therapeutics

Novus Therapeutics, Inc. ("Novus") is a specialty pharmaceutical company
focused on developing products for disorders of the ear, nose, and
throat ("ENT"). Novus has two technologies, each that has the potential
to be developed for multiple ENT indications. Novus' lead product
candidate (OP-02) is a surfactant-based, combination drug product being
developed as a potential first-in-class treatment option for patients at
risk for, or with, otitis media ("OM" or middle ear inflammation with or
without infection). Globally, OM affects more than 700 million adults
and children every year, with over half of cases occurring in children
under five years of age. OM is one of the most common disorders seen in
pediatric practice, and in the United States is a leading cause of
health care visits and the most frequent reason children are prescribed
antibiotics or undergo surgery. Novus also has a foam-based drug
delivery technology (OP-01), which may be developed in the future to
deliver drugs into the ear, nasal, and sinus cavities. For more
information please visit novustherapeutics.com.

Forward-Looking Statements

Any statements in this press release about the company's future
expectations, plans and prospects, including statements about its
strategy, future operations, development of its product candidates, the
review of strategic alternatives and the outcome of such review and
other statements containing the words "believes," "anticipates,"
"plans," "expects," "may," and similar expressions, constitute
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. Forward-looking statements include, but
are not limited to, expectations regarding the timing for the
commencement and completion of our clinical trials, manufacture drug
product and our ability to accelerate the development of our drug
candidates. Actual results may differ materially from those indicated by
such forward-looking statements as a result of various important
factors, including: the sufficiency of the company's cash resources; the
ability to timely develop and manufacture clinical batches of our study
drugs; the ability to obtain necessary approvals to commence additional
clinical trials; whether data from early clinical trials will be
indicative of the data that will be obtained from future clinical
trials; whether the results of clinical trials will warrant submission
for regulatory approval of any investigational product, any such
submission will receive approval from the United States Food and Drug
Administration or equivalent foreign regulatory agencies and, if we are
able to obtain such approval for an investigational product, it will be
successfully distributed and marketed. Any forward-looking statements
contained in this press release speak only as of the date hereof and not
of any future date, and the company expressly disclaims any intent to
update any forward-looking statements, whether as a result of new
information, future events or otherwise.

 

NOVUS THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

June 30,
2018

 

December 31,
2017

(Unaudited)
ASSETS
Current assets:
Cash $ 19,189 $ 17,233
Restricted cash

70
Prepaid expenses and other current assets   1,889   1,697
Total current assets 21,078 19,000
Property and equipment, net 20 25
Goodwill   1,867   1,867
Total assets $ 22,965 $ 20,892

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 706 $ 418
Accrued severance 224 668
Accrued expenses and other liabilities   522   354
Total liabilities 1,452 1,440
 
Commitments and contingencies
 
Stockholders' equity:

Preferred stock, $0.001 par value, 5,000,000 shares authorized and
none issued and outstanding at June 30, 2018 and December 31, 2017

Common stock, $0.001 par value, 200,000,000 shares authorized at
June 30, 2018 and December 31, 2017; 9,407,024 and 7,110,414
shares issued and outstanding at June 30, 2018 and December 31,
2017, respectively

9 7
 
Additional paid-in capital 55,005 46,951
Accumulated deficit   (33,501 )   (27,506 )
Total stockholders' equity   21,513   19,452
Total liabilities and stockholders' equity $ 22,965 $ 20,892
 
 

NOVUS THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE
LOSS

(In thousands, except share and per share data)

 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

2018   2017 2018   2017
Operating expenses
Research and development $ 1,329 $ 533 $ 2,426 $ 1,012
General and administrative   1,860   6,133   3,558   7,039
Total operating expenses   3,189   6,666   5,984   8,051
Loss from operations (3,189 ) (6,666 ) (5,984 ) (8,051 )
Other income (expense), net     4   (11 )   15
Net loss and comprehensive loss $ (3,189 ) $ (6,662 ) $ (5,995 ) $ (8,036 )
Net loss per share, basic and diluted $ (0.34 ) $ (1.32 ) $ (0.70 ) $ (2.51 )

Weighted-average common shares outstanding, basic and diluted

  9,407,024   4,154,842   8,582,723   2,270,907
 

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