Nuvo Research® announces 2014 first quarter results - Wandtv.com, NewsCenter17, StormCenter17, Central Illinois News-

Nuvo Research® announces 2014 first quarter results

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SOURCE Nuvo Research Inc.

MISSISSAUGA, ON, April 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 first quarter ended March 31, 2014.

First Quarter and Recent Corporate Developments:

Pennsaid® 2%

  • The U.S. Food and Drug Administration (FDA) approved the sale and marketing of Pennsaid 2% in the U.S. on January 16 and the Company's U.S. licensee Mallinckrodt, Inc. launched the product on February 10;

Pliaglis

  • The Company's global marketing partner, Galderma Pharma S.A (Galderma), hired a small sales force to market and sell Pliaglis in the U.S.;
  • Galderma launched Pliaglis in Brazil in March;

Pipeline

  • In March, the Company commenced enrolment of participants in the confirmatory WF10™ Phase 2 clinical trial for the treatment of allergic rhinitis being conducted in Germany;
  • Entered into a collaboration with Ferndale Laboratories, Inc. (Ferndale) and a leading Contract Research Organization to develop two topical dermatology products based on Nuvo's patented Multiplexed Molecular Penetration Enhancer (MMPE™) technology; and

Capital Markets

  • Raised $3.1 million in a non-brokered private placement issuing 1,390,000 units at a price of $2.25 per unit.  Each unit consists of one common share and one-half of one common share purchase warrant of the Company exercisable at $3.00.

Financial Results
Revenue, consisting of product sales, royalties, license fee revenue and research and other contract revenue for the three months ended March 31, 2014 was $2.8 million compared to $2.3 million for the three months ended March 31, 2013.  This increase was attributable to increased product sales as Pennsaid 2% was approved and launched by Mallinckrodt in the U.S.

Total operating expenses increased to $5.6 million for the three months ended March 31, 2014 compared to $5.4 million for the three months ended March 31, 2013, mainly due to an increase in cost of goods sold (COGS) related to the increase in product revenues in the quarter.

COGS for the three months ended March 31, 2014 increased to $1.2 million in the quarter versus $1.0 million in the comparative period due to increased Pennsaid and Pennsaid 2% product sales. 

Research and development (R&D) expenses were consistent at $1.9 million for the three months ended March 31, 2014 and March 31, 2013.  The savings the Company realized from centralizing R&D at its Québec facility in 2013 was offset by an increase in spending related to the confirmatory WF10 Phase 2 clinical trial.

General and administrative (G&A) expenses were $2.4 million for the three months ended March 31, 2014 compared to $2.3 million for the three months ended March 31, 2013.  The increase in the quarter related to an increase in non-cash charges which includes stock based compensation and amortization, partially offset by the realized cost savings associated with closing the Company's facilities in Salt Lake City, Utah and West Chester, Pennsylvania in 2013. 

Net loss for the three months ended March 31, 2014 was $2.7 million compared to $3.3 million for the three months ended March 31, 2013.  The decrease in net loss was primarily attributable to improved margins related to higher revenue slightly offset by increased interest expense.

Cash and cash equivalents were $14.2 million as at March 31, 2014, an increase of $1.6 million compared to $12.6 million as at December 31, 2013, primarily as a result of proceeds from the Company's Private Placement.

Cash used in operating activities for the three months ended March 31, 2014 was $0.9 million compared to $1.7 million for the three months ended March 31, 2013.  The improvement primarily related to a decrease in net loss and a recovery of working capital due to the receipt of the US$2.0 million milestone payment from Galderma.

Net cash provided by in financing activities totaled $2.4 million for the three months ended March 31, 2014 compared to net cash used in financing activities of $0.4 million for the three months ended March 31, 2013.  In the three months ended March 31, 2014, the Company raised $2.9 million net of financing fees through the private placement.  During both periods, the Company made repayments on finance, lease and other obligations.

The number of common shares outstanding as at March 31, 2014 was 10,239,619.

Pennsaid and Pennsaid 2% in the U.S.
In the U.S., according to IMS data, a provider of dispensed prescription data, approximately 6,000 Pennsaid 2% prescriptions were dispensed in the first quarter of 2014 with approximately 1.31 bottles of Pennsaid 2% dispensed for each prescription.  On February 10, 2014, Pennsaid 2% was launched in the U.S.  In the first quarter of 2014, approximately 24,000 Pennsaid prescriptions were dispensed, a decrease of 44% from the 43,000 dispensed in the first quarter of 2013, partially due to the launch of Pennsaid 2%.  For each prescription, approximately 1.27 bottles of Pennsaid were dispensed in the first quarter of 2014. 

About Nuvo Research Inc.
Nuvo (TSX:NRI) is a specialty pharmaceutical company focused on improving patient's lives by developing and commercializing innovative products that address unmet medical needs.  The Company has a diverse portfolio of products in the areas of topical pain and immunology. 

Nuvo's marketed products include Pennsaid (a topical treatment for the signs and symptoms of osteoarthritis of the knee), Pennsaid 2% (a topical treatment for the pain of osteoarthritis of the knee), Pliaglis (a topical local anesthetic) and the heated lidocaine/tetracaine patch (HLT Patch). 

Forward-Looking Statements
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.

NUVO RESEARCH INC.

CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

Unaudited


As at March 31,
 2014

As at December 31,
2013

(Canadian dollars in thousands)


$

$

ASSETS




CURRENT




Cash and cash equivalents


14,221

12,621

Accounts receivable


2,228

4,189

Inventories


1,455

990

Other current assets


758

541

TOTAL CURRENT ASSETS


18,662

18,341





Property, plant and equipment


1,372

1,411

Intangible assets


1,855

1,869

TOTAL ASSETS


21,889

21,621





LIABILITIES AND EQUITY




CURRENT




Accounts payable and accrued liabilities


4,365

3,925

Current portion of finance lease and other obligations


2,143

2,114

Current portion of deferred revenue


-

57

TOTAL CURRENT LIABILITIES


6,508

6,096

Finance lease and other obligations


2,900

3,327

TOTAL LIABILITIES


9,408

9,423





EQUITY




Common shares


231,650

229,068

Contributed surplus


13,930

13,573

Accumulated other comprehensive income (AOCI)


1,173

1,086

Deficit


(234,272)

(231,529)

TOTAL EQUITY


12,481

12,198

TOTAL LIABILITIES AND EQUITY


21,889

21,621

 

NUVO RESEARCH INC.

CONSOLIDATED INTERIM STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS

Unaudited


Three Months Ended
March 31, 2014

Three Months Ended
March 31, 2013

(Canadian dollars in thousands,
except per share and share figures)


$

 

$

REVENUE




Product sales


1,156

604

Royalties


1,397

1,384

Research and other contract revenue


147

178

Licensing fees


57

85

Total revenue


2,757

2,251

OPERATING EXPENSES




Cost of goods sold


1,209

972

Research and development expenses


1,887

1,872

General and administrative expenses


2,373

2,293

Sales and marketing expenses


-

177

Interest expense


195

112

Interest income


(21)

(10)

Total operating expenses


5,643

5,416

OTHER EXPENSES (INCOME)




Foreign currency loss (gain)


(164)

77

Net loss before income taxes


(2,722)

(3,242)

Income taxes


21

28

NET LOSS


(2,743)

(3,270)

Other comprehensive income (loss) to be reclassified to net income (loss) in subsequent periods




Unrealized gains on translation of foreign operations


87

318

TOTAL COMPREHENSIVE LOSS


(2,656)

(2,952)

Net loss per common share –




Basic and diluted


$(0.31)

$(0.37)

Average number of common shares outstanding

(in thousands)




basic and diluted


8,865

8,807

 

NUVO RESEARCH INC.

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

 

Unaudited


Three Months  Ended

March 31, 2014

Three Months Ended
March 31, 2013

(Canadian dollars in thousands)


$

$

OPERATING ACTIVITIES




Net loss


(2,743)

(3,270)

Items not involving current cash flows:





Depreciation and amortization


184

248


Deferred license revenue recognized


(57)

(85)


Stock-based compensation


547

140


Unrealized foreign exchange loss (gain)


(213)

148


Inventory write-down


23

-


Interest and accretion of long-term other obligations


17

17


Other


28

(5)



(2,214)

(2,807)

Net change in non-cash working capital


1,314

1,085

CASH USED IN OPERATING ACTIVITIES


(900)

(1,722)

INVESTING ACTIVITIES




Acquisition of property, plant and equipment


(55)

(35)

CASH USED IN INVESTING ACTIVITIES


(55)

(35)

FINANCING ACTIVITIES




Issuance of common shares


2,863

-

Repayment of finance lease and other obligations


(429)

(381)

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


2,434

(381)

Effect of exchange rate changes on cash and cash equivalents


121

(19)

Net change in cash and cash equivalents during the period


1,600

(2,157)

Cash and cash equivalents, beginning of period


12,621

12,149

CASH AND CASH EQUIVALENTS, END OF PERIOD


14,221

9,992





Interest paid


184

100

Interest received


23

5

Income taxes paid


35

20

 

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