MISSISSAUGA, ON, May 12, 2015 /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 first quarter ended March 31, 2015.
First Quarter and Recent Corporate Developments:
WF10
In January, the Company announced topline results of its Phase 2 trial to investigate the safety and efficacy of WF10 in patients with refractory allergic rhinitis. The WF10 arm and the 2 separate arms that included constituent elements of WF10 all demonstrated a reduction in allergy symptoms and performed better than placebo; however, due to an unexpectedly strong placebo response, the differences from placebo were not statistically significant; and
- In April, the Company announced it would conduct a new Phase 2 trial using WF10 for the treatment of allergic rhinitis. Commencement of the trial, which is subject to Canadian regulatory approval, is expected in Q2 2015 with topline results expected in Q4 2015 or Q1 2016.
Pennsaid®2%
- The Company anticipates that its Phase 3 trial in Germany of Pennsaid 2% for the treatment of acute pain to support regulatory approval applications for Pennsaid 2% in international jurisdictions will commence in Q2 2015, subject to German regulatory approval, with topline results expected Q4 2015 or Q1 2016.
Table of Selected Financial Results
For further details on the results, please refer to the Management, Discussion and Analysis (MD&A) and Consolidated Financial Statements which are available on the Company’s website (www.nuvoresearch.com).
Three months ended | |||
March 31, 2015 | March 31, 2014 | Change | |
(Canadian dollars in millions) | $ | $ | $ |
Revenue | 4.5 | 2.8 | 1.7 |
Operating Expenses | 5.1 | 5.6 | (0.5) |
Net loss | (0.3) | (2.7) | 2.4 |
Per share basic and diluted | (0.03) | (0.31) | |
Q1 Financial Highlights
Revenue, consisting of product sales, royalties, license fee revenue and research and other contract revenue for the three months ended March 31, 2015 was $4.5 million compared to $2.8 million for the three months ended March 31, 2014. The increase in revenue was primarily related to higher Pennsaid 2% product sales to Horizon plc (Horizon) in the U.S. market to support their launch of Pennsaid 2%, combined with increased Pennsaid product sales to our distributor in Greece. The increase in product sales was partially offset by a decrease in royalty revenues as the Company does not earn royalty revenue on Horizon’s net sales of Pennsaid 2% in the U.S. market as it did prior to January 1, 2015 on net sales by its previous U.S. marketing licensee, Mallinckrodt.
Total operating expenses for the three months ended March 31, 2015 decreased to $5.1 million versus $5.6 million for the three months ended March 31, 2014. The decrease in operating expenses was primarily due to the revaluation of cash settled stock-based compensation (SBC) costs which are primarily included in general and administrative (G&A) costs for the quarter, partially offset by increased cost of goods sold (COGS) due to a greater volume of production sales.
COGS for the three months ended March 31, 2015 was $2.6 million compared to $1.2 million for the three months ended March 31, 2014. The increase in COGS was associated with increased Pennsaid and Pennsaid 2% product sales. The increase in product sales improved the gross margin to $1.3 million for the three months ended March 31, 2015 compared to a negative margin of $0.1 million for the three months ended March 31, 2014. For the three months ended March 31, 2015, the gross margin as a percentage of product sales was 34%.
Research and development (R&D) expenses increased to $2.0 million for the three months ended March 31, 2015 compared to $1.9 million for the three months ended March 31, 2014. The increase in the quarter related to costs associated with the Pennsaid 2% Phase 3 trial for the treatment of acute pain to support regulatory approval applications for Pennsaid 2% in international jurisdictions.
G&A expenses decreased to $0.7 million for the three months ended March 31, 2015 compared to $2.4 million for the three months ended March 31, 2014. The decrease in the quarter was related to decrease in SBC primarily from the revaluation of cash settled SBC to market value. Excluding this impact, G&A expenses were consistent with the comparative period at $2.1 million.
Net loss was $0.3 million for the three months ended March 31, 2015 compared to $2.7 million for the three months ended March 31, 2014. The improvement in net loss in the current period was attributable to higher Pennsaid and Pennsaid 2% product revenue and a decrease in operating expenses in the current period, offset by lower royalty revenues.
Cash and short-term investments was $56.8 million at March 31, 2015, a decrease of $1.5 million compared to $58.3 million at December 31, 2014.
Cash used in operating activities was $1.7 million for the three months ended March 31, 2015 compared to $0.9 million for the three months ended March 31, 2014. In the quarter, the Company used $0.2 million of cash in its operations and invested $1.4 million in non-cash working capital. In the comparative period, the Company used $2.7 million of cash in its operations and recovered $1.8 million of non-cash working capital.
The number of common shares outstanding as at March 31, 2015 was 10,854,989.
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 currently has four commercial products, a pipeline of topical and transdermal products focusing on pain and dermatology and multiple 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 and an immune system modulation platform that supports the development of drug products that modulate chronic inflammation processes resulting in a therapeutic benefit. For additional company information visit www.nuvoresearch.com.
Forward-Looking Statements
Certain statements in this press release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to statements concerning the Company’s future objectives, strategies to achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, 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 19, 2015 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 press 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 press release are qualified by these cautionary statements. The forward-looking statements contained herein are made as of the date of this press 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.
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