Well Positioned in 2013 with Three Phase 2b Clinical Trials for Conjunctivitis, Impetigo and UCBE Advancing
EMERYVILLE, Calif., March 14, 2013 (GLOBE NEWSWIRE) -- NovaBay Pharmaceuticals, Inc. (NYSE MKT:NBY), a biotechnology company focused on addressing the large unmet therapeutic needs of the global topical, non-systemic anti-infective market with first-in-class compounds such as its proprietary Aganocides®, today gave a fourth quarter financial and clinical update and outlook for 2013.
Dr. Ron Najafi, Chairman and CEO, remarked, "We are particularly excited about 2013 as the enrollment in our three auriclosene trials continues to advance and we move towards data from these three trials. Our global viral conjunctivitis trial, BAYnovation, is underway in India as of January and recruitment efforts are continuing to ramp. The impetigo trial being implemented by our partner Galderma expanded enrollment to South Africa in February. The urinary catheter blockage and encrustation (UCBE) trial continues to enroll at a steady pace."
Dr. Najafi concluded, "Over the past year, we have achieved several significant development milestones and strengthened our balance sheet. We brought in approximately $7 million in capital in December that provided the resources to advance our three clinical trials and to conduct a Phase 2 study of auriclosene as a treatment for bacterial conjunctivitis, facilitating our ultimate goal of one product to treat both viral and bacterial conjunctivitis."
Fourth Quarter and Full Year Financial Results
As of December 31, 2012, cash, cash equivalents and short-term investments totaled $16.9 million, compared to $14.1 million at the end of 2011, representing a full-year net cash increase of approximately $2.7 million, or 19.3%. The cash increase reflects cash received from the company's R&D partners as milestone payments, the December 2012 public offering of common stock and warrants, and an additional $2.5 million of financing from a private placement of common stock and warrants.
NovaBay's license and collaboration revenue for the year ended December 31, 2012 was $6.9 million, compared to $11.0 million a year ago. License and collaboration revenues for the fourth quarter ended December 31, 2012 remained relatively consistent at $1.1 million, compared to $1.2 million in the fourth quarter of 2011. The full-year decrease for 2012 compared to the same periods in 2011 is attributed to the termination in 2011 of the Alcon agreement and was partially offset by upfront licensing fees and milestones payments received in 2012 from other collaboration partners.
Total research and development expenses decreased by 6.4% to $9.3 million for the year ended December 31, 2012, from $9.9 million for the year ended December 31, 2011. For the fourth quarter 2012, research and development expenses were relatively consistent at $2.1 million, compared to $2.2 million in the same quarter a year ago. This year over year decrease was primarily due to the reduction of costs associated with the 2011 termination of the Alcon agreement, partially offset by the increase in costs in NovaBay's conjunctivitis and UCBE trials.
NovaBay expects to incur increasing research and development expenses in 2013 and in subsequent years as it continues to increase its focus on developing product candidates, both independently and in collaboration with our partners. In particular, the company expects to incur ongoing clinical, chemistry, and manufacturing expenses related to four healthcare markets in which it's pursuing opportunities: ophthalmology, dermatology, urology, and advanced wound care.
General and administrative expenses increased 10.0% to $6.0 million in 2012, compared to $5.4 million in 2011, reflecting an increase in marketing and and support for the distribution of NeutroPhase. The company expects that general and administrative expenses will increase slightly as it continues to market its NeutroPhase product in 2013 and provide general support for the growth in our clinical trials.
Net loss for 2012 was $7.0 million, compared to $5.1 million for 2011. For the fourth quarter 2012, net loss was $2.4 million, or $0.08 per diluted share, compared with a net loss of $3.6 million, or $0.13 per diluted share, in the same quarter a year ago. This change was primarily a result of the revenue changes noted above, and was also reflective of the updated share count following the company's December capital raise, which increased the number of shares outstanding from 25.8 million shares at December 31, 2011, to 29.4 million shares outstanding at December 31, 2012.
Recent Highlights
- December 2012 - NovaBay Priced a Public Offering of Common Stock and Warrants. NovaBay priced an underwritten public offering of an aggregate of 5,900,000 shares of its common stock, at a price to the public of $1.25 per share, and one-year warrants to purchase up to an aggregate of 4,425,000 shares of common stock. The net proceeds to NovaBay from this offering were approximately $6.34 million, after deducting underwriting discounts and commissions and other estimated offering expenses, but excluding the exercise of any warrants. If the warrants are exercised in full NovaBay would receive an additional approximately $6.64 million.
- January 2013 - NovaBay Expanded Global Ophthalmology Study of Pink Eye to India. NovaBay announced that the first patients were enrolled in India into its global Phase 2b BAYnovation clinical study, investigating NVC-422 Ophthalmic Solution as a treatment of adenoviral conjunctivitis, a highly contagious form of "pink eye" for which there is an unmet ocular medical need. BAYnovation is a multi-centered, randomized clinical study expected to enroll approximately 450 patients with confirmed adenoviral conjunctivitis throughout the United States, India and Brazil. The study will be conducted in over 60 clinical trial sites worldwide, with 24 sites in India.
- February 2013 - NovaBay Partner Galderma Expands Phase 2b Trial Enrollment to South Africa. NovaBay partner Galderma S.A., a global leading pharmaceutical company exclusively focused on dermatology, has initiated the South African arm of its Phase 2b clinical study of a proprietary topical formulation of NVC-422 (CD07223) for the treatment of impetigo. Designed to confirm efficacy and evaluate two different dosage regimens, the study is expected to enroll over 300 patients at 24 clinical sites in four countries worldwide. The first patients were enrolled in the U.S. arm of the study in September 2012.
- February 2013 - NovaBay Receives Unique Globally Recognized International Nonproprietary Name Auriclosene for NVC-422. NovaBay announced that the World Health Organization (WHO) has approved the international nonproprietary name (INN) "auriclosene" (pronounced awr-rih-CLO-zeen) for NovaBay's lead Aganocide® compound NVC-422. INNs facilitate the identification of active pharmaceutical ingredients, and each INN is a globally recognized unique name.
About NovaBay Pharmaceuticals, Inc.
Going Beyond Antibiotics
NovaBay Pharmaceuticals is a biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with its two distinct categories of compounds, Aganocides® and NeutroPhase® Skin and Wound Cleanser. The Company's four core business units, DermaBay, UroBay, EyeBay and MediBay, are developing treatments that tackle infections in the dermatology, urology, ophthalmology, and wound care areas.
Aganocide® Compounds
NovaBay's first-in-class Aganocide compounds, led by NVC-422, are patented, topical antimicrobials with a broad spectrum of activity against bacteria, viruses and fungi. Mimicking the mechanism of action that human white blood cells use against infections, Aganocides are not subject to bacterial or fungal resistance, which has been demonstrated in in-vitro and in-vivo studies. Having demonstrated clinical efficacy in Phase 2 proof-of-concept clinical studies, NVC-422 is suited to treat and prevent a wide range of local, non-systemic infections. NovaBay's clinical development activities are focused on three disease areas:
- Dermatology - Partnered with Galderma, a leading dermatology company, to develop a formulation of NVC-422 for treatment of highly contagious skin infection, impetigo, which occurs most commonly in children. Clinical data results from the Phase 2b study are expected in the second half of 2013.
- Ophthalmology - NovaBay is developing an eye drop formulation of NVC-422 for treating adenoviral conjunctivitis, a highly contagious viral eye infection for which there is no approved acute treatment. Enrollment into a global Phase 2b clinical study has begun, and clinical data results are expected in the second half of 2013.
- Urology – NovaBay's urinary catheter irrigation solution containing NVC-422 is currently in a Phase 2b study, with the goal of reducing the incidence of urinary catheter blockage and encrustation (UCBE) and associated urinary tract infections. The company reported positive data from the Phase 2a study and is evaluating the effect of an alternate more potent formulation of NVC-422 in Phase 2b. Results are expected in the first half of 2013.
NeutroPhase®
NeutroPhase is the only pure hypochlorous acid (HOCI) skin and wound cleanser cleared by the U.S. Food and Drug Administration (FDA) to target the six-million-patient U.S. market of chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers. The saline-based solution is the only wound cleanser on the market to include a stabilized, pure form of HOCl shown in studies to kill bacteria in solution, including flesh-eating bacteria. For additional information, visit: www.neutrophase.com.
Forward-Looking Statements
This release contains forward-looking statements, which are based upon management's current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding the expected timing of enrollment and commencement of clinical trials, expected timing of announcement of results of clinical studies, and expected future financial results. The words "continued," "expected" and "will be" are intended to identify these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in or implied by the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to difficulties or delays in development, clinical trial, regulatory approval, production and marketing of the company's product candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the product candidates, the uncertainty of patent protection for the company's intellectual property or trade secrets, the company's ability to obtain additional financing as necessary and unanticipated research and development and other costs. Other risks relating to NovaBay and Aganocide compounds, including risks that could cause results to differ materially from those projected in the forward-looking statements in this press release, are detailed in NovaBay's latest Form 10-K and Form 10-Q filings with the Securities and Exchange Commission, especially under the heading "Risk Factors." The forward-looking statements in this release speak only as of this date, and NovaBay disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.
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| NOVABAY PHARMACEUTICALS, INC. | ||
| (a development stage company) | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, except per share data) | ||
| December 31, | ||
| 2012 | 2011 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 12,735 | $ 8,428 |
| Short-term investments | 4,135 | 5,710 |
| Accounts receivable | 943 | 3 |
| Prepaid expenses and other current assets | 445 | 417 |
| Inventory | 23 | — |
| Total current assets | 18,281 | 14,558 |
| Property and equipment, net | 891 | 1,270 |
| Other assets | 63 | 135 |
| TOTAL ASSETS | $ 19,235 | $ 15,963 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 455 | $ 472 |
| Accrued liabilities | 1,497 | 1,061 |
| Deferred revenue | 1,221 | 1,305 |
| Total current liabilities | 3,173 | 2,838 |
| Deferred revenue - non-current | 671 | 945 |
| Deferred rent | 60 | 115 |
| Warrant liability | 1,282 | 2,721 |
| Total liabilities | 5,186 | 6,619 |
| Stockholders' Equity: | ||
| Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at December 31, 2012 and 2011 | — | — |
| Common stock, $0.01 par value; 65,000 shares authorized;36,915 and 28,587 shares issued and outstanding at December 31, 2012 and 2011, respectively | 369 | 286 |
| Additional paid-in capital | 54,004 | 42,386 |
| Accumulated other comprehensive loss | (13) | (44) |
| Accumulated deficit during development stage | (40,311) | (33,284) |
| Total stockholders' equity | 14,049 | 9,344 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 19,235 | $ 15,963 |
| NOVABAY PHARMACEUTICALS, INC. | |||
| (A development stage company) | |||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||
| (Unaudited) | |||
| Cumulative Period | |||
| from July 1, 2002 | |||
| (inception) to | |||
| Year Ended December 31, | December 31, | ||
| 2012 | 2011 | 2012 | |
| Revenue: | |||
| License, collaboration and distribution revenue | $ 6,855 | $ 10,993 | $ 57,454 |
| Other revenues | 92 | 26 | 118 |
| Total revenue | 6,947 | 11,019 | 57,572 |
| Operating expenses: | |||
| Research and development | 9,275 | 9,911 | 60,146 |
| Selling, general and administrative | 5,981 | 5,429 | 39,635 |
| Total operating expenses | 15,256 | 15,340 | 99,781 |
| Operating loss | (8,309) | (4,321) | (42,209) |
| Non-cash gain on change in fair value of warrants | 1,439 | (732) | 707 |
| Other income (expense), net | (155) | (30) | 1,266 |
| Loss before income taxes | (7,025) | (5,083) | (40,236) |
| Provision for income taxes | (2) | (2) | (75) |
| Net loss | (7,027) | (5,085) | (40,311) |
| Other comprehensive gain (loss): | |||
| Change in unrealized gains (losses) on available-for-sale securities | 31 | (30) | (13) |
| Total comprehensive income (loss) | $ (6,996) | $ (5,115) | $ (40,324) |
| Net loss per share: | |||
| Basic and diluted | $ (0.24) | $ (0.20) | |
| Shares used in per share calculations: | |||
| Basic and diluted | 29,448 | 25,773 | |