MISSISSAUGA, ON, Aug. 1, 2012 /PRNewswire/ - Nuvo Research Inc. (TSX: NRI), a
specialty pharmaceutical company dedicated to building a portfolio of
products for the topical treatment of pain and the development of its
immune modulating drug candidate WF10, today announced its financial
and operational results for the second quarter ended June 30, 2012.
Second Quarter and Recent Corporate Developments:
The Company received notice of a positive opinion from the European
Decentralized Procedure for the approval of Pliaglis® in the E.U. from the German Federal Institute for Drugs and Medical
Devices (BfArM), the reference member state;
The Company was advised by Galderma S.A. (Galderma) that it received
marketing licenses for Pliaglis in 5 E.U. countries; the first 3
licenses entitled Nuvo to receive US$6.0 million of milestone payments;
Galderma submitted a response to the Complete Response Letter from the
U.S. Food and Drug Administration (FDA) and has advised Nuvo that it
believes the response addresses all of the FDA's issues required for
the approval of the supplemental New Drug Application (sNDA) for
Pliaglis in the U.S.;
The Company was advised by Mallinckrodt Inc. (Mallinckrodt), the
Pharmaceuticals business of Covidien, that an sNDA for Pennsaid® 2% filed with the U.S. FDA by Mallinckrodt was converted by
Mallinckrodt to a New Drug Application (NDA), as per the FDA's request,
and was accepted by the FDA for review with a Prescription Drug User
Fee Act (PDUFA) date of March 4, 2013;
The United States Patent Office issued a patent relating to a method of
using Pennsaid with an expiry date of July 10, 2029 which was filed in
the FDA Orange Book;
The Company and Mallinckrodt received Paragraph IV certification notices
from three companies advising that they have filed an Abbreviated New
Drug Application (ANDA) with the FDA for a generic version of Pennsaid;
The United States Patent Office reinstated a patent related to Synera® Patch with an expiry date of July 7, 2020 which was filed in the FDA
The Development Bank of Saxony (SAB) in Germany advised Nuvo that it
will provide Nuvo with up to 4.4 million of non-repayable funding for
the further development of its improved reformulated version of WF10;
The Company entered into a license and supply agreement granting Paladin
Labs, Inc. (Paladin) exclusive Canadian rights to market and sell
Synera, upon regulatory approval; and
The Company signed a loan agreement with Paladin; whereby, Paladin has
agreed to loan Nuvo $8.0 million in two equal tranches of $4.0
million. The first tranche was advanced in late May 2012.
"2012 has been a very busy and productive time for Nuvo," said Dan
Chicoine, Nuvo's Chairman and Co-Chief Executive Officer. "We continue
to move forward with our strategy of building a profitable specialty
pharmaceutical company focused on the treatment of pain."
According to IMS Health, during the second quarter of 2012, U.S.
prescriptions of Pennsaid continued to grow quarter-over-quarter to a
record of approximately 95,000 with an average 1.31 bottles of Pennsaid
dispensed per script. This represents an increase of approximately 2%
over the number of prescriptions in the first quarter of 2012.
In the first quarter of 2012, Endo Pharmaceuticals Holdings Inc. (Endo)
indicated that there would be temporary shortages in the U.S. of its
licensed product, Voltaren Gel, the main competitor product to
Pennsaid, as a result of manufacturing issues unrelated to Voltaren Gel
at a facility owned by Novartis Consumer Health that was supplying
Voltaren Gel for the U.S. market. Such product shortages have
contributed to recent substantial increases in Pennsaid U.S.
prescriptions; however, in April, Pennsaid weekly prescriptions
retreated from their first quarter peak which coincides with Voltaren
Gel supply resumption.
Revenue, consisting of product sales, royalties, license fee revenue and
research and other contract revenue for the three months ended June 30,
2012 increased to $11.4 million compared to $3.8 million for the three
months ended June 30, 2011. The significant increase in revenue relates
to $5.1 million in milestone payments earned by the Company upon the
marketing approval of Pliaglis in the first two European countries and
an increase in royalty and product revenue earned on Pennsaid sales in
the U.S., primarily due to the Voltaren Gel temporary product
shortage. Total revenue for the six months ended June 30, 2012 was
$17.6 million compared to $7.6 million for the six months ended June
For the three months ended June 30, 2012, gross margin on product sales
increased to $0.8 million compared to $0.5 million for the three months
ended June 30, 2011. The increase in gross margin was primarily
attributable to an increase in Pennsaid product sales. For the six
months ended June 30, 2012, gross margin on product sales were $1.6
million compared to $1.5 million for the six months ended June 30,
Total operating expenses for the three and six months ended June 30,
2012 were $5.6 million and $11.9 million compared to $4.6 million and
$9.2 million for the three and six months ended June 30, 2011. The
increase in operating expenses relates primarily to sales and marketing
(S&M) costs for the Company's launch of Synera in the United States,
targeting interventional pain physicians with a dedicated 21 person
pain specialty contract sales force and the inclusion of ZARS'
R&D expenses were unchanged at $2.0 million for the three months ended
June 30, 2012 and the three months ended June 30, 2011. R&D expenses
for the six months ended June 30, 2012 were $3.7 million compared to
$4.1 million for the six months ended June 30, 2011. The decrease in
R&D expenses year-over-year was attributable to the closure of the
Company's San Diego research facility at the end of January 2011.
S&M expenses were $1.4 million and $3.4 million for the three and six
months ended June 30, 2012 compared to $nil for the three and six
months ended June 30, 2011. S&M expenses were entirely attributable to
the U.S. launch of Synera.
G&A expenses were $2.2 million for the three months ended June 30, 2012
compared to $2.6 million for the three months ended June 30, 2011. The
decrease is related to consulting, professional and other fees incurred
in the comparative period related to the ZARS acquisition. G&A expenses
decreased to $4.8 million for the six months ended June 30, 2012
compared to $5.2 million for the six months ended June 30, 2011.
Net income was $3.3 million and $1.2 million for the three and six
months ended June 30, 2012 compared to a net loss of $0.6 million and
$2.9 million for the three and six months ended June 30, 2011. The
increase in income was attributable to the milestone revenue earned
from Galderma and higher royalty revenue on Pennsaid sales in the U.S.
partially offset by higher operating expenses. In addition, the
comparable period included a $1.8 million gain recognized on the change
in terms of the contingent consideration related to the ZARS
Cash and cash equivalents were $14.1 million as at June 30, 2012
compared to $14.7 million as at December 31, 2011.
Cash used in operating activities was $1.0 million for the three months
ended June 30, 2012 compared to $4.3 million for the three months ended
June 30, 2011. The decrease related to a larger investment in non-cash
working capital in the current quarter compared to the comparative
period. For the six months ended June 30, 2012, cash used in operating
activities was $4.4 million for the six months ended June 30, 2012
versus $5.4 million for the six months ended June 30, 2011.
Cash provided by financing activities was $3.8 million and $3.9 million
for the three and six months ended June 30, 2012 compared to cash used
in financing activities of $3.0 million for both for the three and six
months ended June 30, 2011. In the quarter, the Company received loan
proceeds of $4.0 million from Paladin which represents the first
tranche of a $8.0 million loan. In the comparative period, the Company
paid the entire balance of acquired bank debt from the ZARS acquisition
that was payable on the acquisition date.
The number of common shares outstanding as at June 30, 2012 was 565.7
Management to Host Conference Call
Management will host a conference call to discuss the first quarter
results on Thursday, August 2, 2012 at 8:30 a.m. ET. Following
management's presentation, there will be a question and answer session,
at which time the operator will direct participants to the correct
procedure for submitting questions. To participate in the conference
call, please dial 647-427-7450 or 1-888-231-8191. Please call in 15
minutes prior to the call to secure a line. You will be put on hold
until the conference call begins.
A taped replay of the conference call will be available two hours after
the live conference call and will be accessible until Thursday, August
9, 2012 by calling 416-849-0833 or 1-855-859-2056, reference number
A live audio webcast of the conference call will be available through www.nuvoresearch.com. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
hear the webcast.
About Nuvo Research Inc.
Nuvo Research is a publicly traded, Canadian specialty pharmaceutical
company, headquartered in Mississauga, Ontario. The Company is
building a portfolio of products for the treatment of pain through
internal research and development and by in-licensing and acquisition.
The Company's product portfolio includes Pennsaid®, Pliaglis® and Synera®. Pennsaid, a topical nonsteroidal anti-inflammatory drug (NSAID), is
used to treat the signs and symptoms of osteoarthritis of the knee(s).
Pennsaid is sold in the United States by Mallinckrodt Inc., the
Pharmaceuticals business of Covidien, in Canada by Paladin Labs Inc.
and in several European countries. Pliaglis is a topical local
anesthetic cream which provides topical local analgesia for superficial
dermatological procedures. The Company has licensed worldwide
marketing rights to Pliaglis to Galderma Pharma S.A., a global company
dedicated to dermatology. Synera is a topical patch that combines
lidocaine, tetracaine and heat, approved in the United States to
provide local dermal analgesia for superficial venous access and
superficial dermatological procedures and in Europe, for surface
anaesthesia of normal intact skin. Nuvo currently markets Synera in
the United States and its licensing partner, EuroCept International
B.V., has initiated a pan-European launch of Synera (under the name
Rapydan®) in several European countries. The Company is also developing the
compound WF10, for the treatment of immune related diseases.
This document contains forward-looking statements. Some forward-looking
statements may be identified by words like "expects", "anticipates",
"plans", "intends", "indicates" or similar expressions. These
forward-looking statements, by their nature, necessarily involve risks
and uncertainties that could cause actual results to differ materially
from those contemplated by the forward-looking statements. Nuvo
considers the assumptions on which these forward-looking statements are
based to be reasonable at the time they were prepared, but caution that
these assumptions regarding future events, many of which are beyond the
control of the Company, may ultimately prove to be incorrect. Factors
and risks, which could cause actual results to differ materially from
current expectations, are discussed in the Annual Report, as well as in
Nuvo's Annual Information Form for the year ended December 31, 2011.
Nuvo disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information or
future events, except as required by law. For additional information on
risks and uncertainties relating to these forward looking statements,
investors should consult the Company's ongoing quarterly filings,
annual report and Annual Information Form and other filings found on
SEDAR at www.sedar.com.