MISSISSAUGA, ON, May 2, 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 first quarter ended March 31, 2012.
First Quarter and Recent Corporate Developments:
- Pennsaid® U.S. prescriptions continued to grow quarter-over-quarter. U.S. prescriptions grew to 93,000 in the first quarter of 2012, an increase of approximately 98% over the previous quarter due in part to temporary product shortages of Pennsaid’s main competitor product, Voltaren® Gel. In April, Pennsaid weekly prescriptions retreated from their first quarter peak which coincides with Voltaren Gel supply resumption;
- Launched the marketing and sale of Synera® to U.S. interventional pain doctors with a dedicated 21 person contract sales force; and
- Galderma S.A. (Galderma) advised that they received a Complete Response Letter from the U.S. Food and Drug Administration (FDA) for the Pliaglis® supplemental New Drug Application (sNDA) outlining additional information the FDA requires before it will approve the sale and marketing of Pliaglis in the U.S. Nuvo has licensed worldwide marketing rights for Pliaglis to Galderma.
“Our strategy of building a profitable specialty pharmaceutical company focused on the treatment of pain continues to progress as evidenced by the commercialization of Synera and growing U.S. Pennsaid sales.” said Dan Chicoine, Nuvo’s Chairman and Co-Chief Executive Officer. “We expect growth from each of our franchises to add to our revenues in the near future through direct sales, royalty revenue or milestones payments.”
Pennsaid U.S.
According to IMS Health, during the first quarter of 2012, U.S. prescriptions of Pennsaid continued to grow quarter-over-quarter to a record of approximately 93,000 with an average 1.35 bottles of Pennsaid dispensed per script. This represents an increase of approximately 98% over the number of prescriptions in the fourth quarter of 2011.
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.
Operating Results
Revenue, consisting of product sales, royalties, license fee revenue and research and other contract revenue for the three months ended March 31, 2012 increased to $6.2 million compared to $3.8 million for the three months ended March 31, 2011. The significant increase in revenue related to increased royalty and product revenue earned on Pennsaid sales in the U.S., primarily due to the Voltaren Gel temporary product shortage and higher licensee fee revenue.
Gross margin on product sales decreased to $0.7 million for the three months ended March 31, 2012 compared to $1.0 million for the three months ended March 31, 2011. The decrease in gross margin was mainly attributable to a decrease in WF10 sales and a change in the mix of Pennsaid produced and sold by the Company’s manufacturing facility.
Total operating expenses for the three months ended March 31, 2012 increased to $6.3 million versus $4.6 million for the three months ended March 31, 2011. The increase in operating expenses primarily related to higher S&M expenses associated with the Company’s launch of Synera in the U.S., targeting interventional pain physicians with a dedicated 21 person pain specialty contract sales force and the inclusion of ZARS’ operating expenses.
R&D expenses for the quarter were $1.7 million compared to $2.1 million for the comparable period. R&D expenses decreased by $0.4 million primarily due to the closure of the Company’s San Diego research facility at the end of January 2011 and a corresponding reduction in the size of the Company’s early stage R&D team.
S&M expenses were $2.0 million for the three months ended March 31, 2012 and $nil for the comparable period in 2011. S&M expenses were entirely attributable to the Company’s U.S. launch of Synera.
G&A expenses increased slightly to $2.6 million for the three months ended March 31, 2012 compared to $2.5 million for the three months ended March 31, 2011. The increase was related to the inclusion of ZARS and an increase in share-based compensation, offset by a decrease in consulting, professional and other fees incurred in completing the ZARS Acquisition.
Net loss was $2.1 million for the three months ended March 31, 2012 compared to $2.4 million for the three months ended March 31, 2011. The decreased loss was a result of higher revenue, partially offset by higher operating expenses.
Cash and cash equivalents were $11.3 million as at March 31, 2012 compared to $14.7 million as at December 31, 2011.
Cash used in operating activities of $3.5 million was $2.4 million higher than the cash used in operating activities of $1.1 million for the three months ended March 31, 2011. The increase related to an investment in non-cash working capital of $1.4 million in the three months ended March 31, 2012 compared with a recovery of $1.1 million in non-cash working capital in the three months ended March 31, 2011.
The number of common shares outstanding as at March 31, 2012 was 565.7 million.
Management to Host Conference Call
Management will host a conference call to discuss the first quarter results on Thursday, May 3, 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, May 10, 2012 by calling 416-849-0833 or 1-855-859-2056, reference number 66546906.
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.
Notice of Annual and Special Meeting
Nuvo will be holding its Annual and Special Meeting of Shareholders on Tuesday, May 15, 2012 at 3:30 p.m. (ET) at Nuvo Manufacturing, 3655 Chemin de la Cote-Bissonette, Varennes, Quebec, Canada.
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 Pain Group, located in West Chester, Pennsylvania, is focused on the development and commercialization of topically delivered pain products. The Company’s product portfolio includes Pennsaid, Pliaglis and Synera. Pennsaid, a topical non-steroidal anti-inflammatory drug (NSAID), is used to treat the signs and symptoms of osteoarthritis of the knee. Pennsaid is sold in the United States by Mallinckrodt Inc., a Covidien company (NYSE: COV), in Canada by Paladin Labs Inc. (TSX:PLB) and in several European countries. Pliaglis is a topical local anesthetic cream, which is U.S. Food and Drug Administration (FDA) approved to provide topical local analgesia for superficial dermatological procedures. The Company has licensed worldwide marketing rights to Pliaglis to Galderma Pharma S.A., a global specialty pharmaceutical company specialized in 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. Through its subsidiary, Nuvo Research GmbH, based in Leipzig, Germany, the Company is also developing the compound WF10, for the treatment of immune related diseases.
