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MISSISSAUGA, ON, July 30, 2014 /PRNewswire/ - Nuvo Research Inc. (TSX:NRI), a
specialty pharmaceutical company with a diverse portfolio of topical
and immunology products, today announced its financial and operational
results for the second quarter ended June 30, 2014.
WF10 Phase 2 Clinical Trial Update
The enrolment for the Phase 2 WF10 clinical trial for the treatment of
allergic rhinitis commenced in March 2014 and to-date, 121 patients
have been enrolled at 15 sites in Germany. Enrolment was slower than
anticipated due to a late onset to the allergy season in Germany. The
trial is a 160-subject, randomized, double blind, placebo-controlled,
4-arm multi-centre trial to assess the efficacy and safety of a regimen
of five WF10 infusions for the treatment of patients with moderate to
severe persistent allergic rhinitis. The Company expects the study to
be completed in late 2014 with top-line results available in the first
quarter of 2015.
Table of Selected Financial Results
For further details on the results, please refer to Nuvo's Management,
Discussion and Analysis (MD&A) and Condensed Consolidated Interim
Financial Statements which are available on the Company's website (www.nuvoresearch.com).
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(Canadian dollars in thousands, |
except per share and share figures)
Per share - basic and diluted
Q2 Financial Highlights
Revenue, consisting of product sales, royalties, license fee revenue and
research and other contract revenue for the three months ended June 30,
2014 was $3.9 million compared to $3.3 million for the three months
ended June 30, 2013. The increase was attributable to higher product
sales of Pennsaid 2% to support the launch in the U.S. and higher
Pennsaid product sales to our distributors outside of the U.S. Total
revenue for the six months ended June 30, 2014 was $6.6 million
compared to $5.6 million in the comparative period.
Total operating expenses for the three months ended June 30, 2014
increased to $6.0 million from $5.6 million for the three months ended
June 30, 2013. The increase was primarily due to higher General and
Administrative (G&A) costs in the quarter. Total operating expenses
for the six months ended June 30, 2014 increased to $11.7 million from
$11.0 million in the comparative period.
Cost of Goods Sold (COGS) was unchanged at $1.5 million for the three
months ended June 30, 2014 and June 30, 2013. The Company's gross
margin on product sales increased to $0.7 million compared to $0.2
million in the comparative period, due to an increase in Pennsaid and
Pennsaid 2% product sales in the quarter. Gross margin as a percent of
product sales increased in the quarter to 32% from 9% in the
comparative period. For the six months ended June 30, 2014, COGS
increased to $2.7 million compared to $2.5 million for the six month
ended June 30, 2013.
Research and Development expenses were unchanged at $1.5 million and
$3.4 million for the three and six months ended June 30, 2014 and June
30, 2013. In the quarter, the costs associated with the Company's
Phase 2 clinical trial for WF10 were offset by the savings realized
from the closure of the Company's facility in Salt Lake City and the
TPT Group office in 2013.
G&A expenses were $2.9 million for the three months ended June 30, 2014
compared to $2.3 million for the three months ended June 30, 2013. The
increase in the quarter related to an increase in stock-based
compensation and professional fees related to the Company's litigation
with Mallinckrodt, partially offset by a decrease in non-cash charges
related to amortization of the Company's intangible assets. G&A
expenses for the six months ended June 30, 2014 were $5.3 million
compared to $4.6 million for the six months ended June 30, 2013.
Net loss was $2.3 million for the three months ended June 30, 2014
compared to $2.2 million for the three months ended June 30, 2013. The
increase in revenue in the quarter was offset by higher operating
expenses and a foreign currency loss in the quarter compared to a
foreign currency gain in the comparative period. Net loss was $5.1
million for the six months ended June 30, 2014 compared to $5.5 million
for the six months ended June 30, 2013.
Cash and cash equivalents were $10.7 million as at June 30, 2014
compared to $12.6 million as at December 31, 2013.
Cash used in operating activities increased to $2.7 million for the
three months ended June 30, 2014 compared to $2.0 million for the three
months ended June 30, 2013. The increase was primarily due to higher
investment in non-cash working capital in the quarter related to an
increase in accounts receivable due to greater Pennsaid and Pennsaid 2%
product sales. For the six months ended June 30, 2014, cash used in
operating activities was $3.6 million compared to $3.8 million for the
six months ended June 30, 2013.
Net cash used in financing activities totaled $0.7 million for the three
months ended June 30, 2014 compared to $0.5 million for the three
months ended June 30, 2013. During both periods, the Company made
repayments on finance, lease and other obligations. Net cash provided
by financing activities totaled $1.7 million for the six months ended
June 30, 2014 compared to net cash used in financing activities of $0.9
million for the six months ended June 30, 2013.
The number of common shares outstanding as at June 30, 2014 was
Pennsaid and Pennsaid 2% in the U.S.
According to IMS Health, a provider of dispensed prescription data,
during the second quarter of 2014, U.S. prescriptions of Pennsaid 2%
were 18,000 with an average of 1.23 bottles per script compared to
6,000 prescriptions in the first quarter of 2014. Pennsaid 2% was
launched on February 10, 2014. Pennsaid prescriptions were 14,000 in
the three months ended June 30, 2014, a 42% decrease from the
prescriptions in the first quarter of 2014. The decrease in Pennsaid
prescriptions was related to the launch of Pennsaid 2% as Mallinckrodt
is working to switch the market from Pennsaid to Pennsaid 2% and the
launch of a generic version of Pennsaid in the U.S. in May 2014.
About Nuvo Research Inc.
Nuvo (TSX:NRI) is a specialty pharmaceutical company with a diverse
portfolio of products and technologies. The Company operates two
distinct business units: the Topical Products and Technology (TPT)
Group and the Immunology Group. The TPT Group has four U.S. Food and
Drug Administration (FDA) approved commercial products, a pipeline of
topical and transdermal products focusing on pain and dermatology and
four drug delivery platforms that support the development of patented
formulations that can deliver actives into or through the skin. The
Immunology Group has two commercial products, a development program for
the treatment of allergic rhinitis and an immune system modulation
platform that has the potential to support treatments for a broad range
of immune system related disorders. For additional company information
Certain statements in this news release constitute forward-looking
statements within the meaning of applicable securities laws.
Forward-looking statements include, but are not limited to the
Company's anticipated use of proceeds from the Private Placement, the
Company's future share price and the Company's possible election to
accelerate the expiry date of any of the warrants or the brokers
warrants and similar statements concerning anticipated future events,
results, circumstances, performance or expectations that are not
historical facts. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "outlook",
"objective", "may", "will", "expect", "intend", "estimate",
"anticipate", "believe", "should", "plans" or "continue", or similar
expressions suggesting future outcomes or events. Such forward-looking
statements reflect management's current beliefs and are based on
information currently available to management. Forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those contemplated by such
statements. Factors that could cause such differences include general
business and economic uncertainties and adverse market conditions as
well as other risk factors included in the Company's Annual Information
Form dated February 20, 2014 under the heading "Risks Factors" and as
described from time to time in the reports and disclosure documents
filed by the Company with Canadian securities regulatory agencies and
commissions. This list is not exhaustive of the factors that may impact
the Company's forward-looking statements. These and other factors
should be considered carefully and readers should not place undue
reliance on the Company's forward-looking statements. As a result of
the foregoing and other factors, no assurance can be given as to any
such future results, levels of activity or achievements and neither the
Company nor any other person assumes responsibility for the accuracy
and completeness of these forward-looking statements. The factors
underlying current expectations are dynamic and subject to change.
Although the forward-looking information contained in this news release
is based upon what management believes are reasonable assumptions,
there can be no assurance that actual results will be consistent with
these forward-looking statements. All forward-looking statements in
this news release are qualified by these cautionary statements. The
forward-looking statements contained herein are made as of the date of
this news release and except as required by applicable law, the Company
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
SOURCE Nuvo Research Inc.