Clinical Results From Three Aganocide® Trials to be Reported Over the Next Three to Nine Months
EMERYVILLE, Calif., Aug. 1, 2013 (GLOBE NEWSWIRE) -- NovaBay Pharmaceuticals, Inc. (NYSE:NBY), an advanced clinical-stage biotechnology company focused on the topical, anti-infective market, today reported second quarter 2013 financial results and provided a clinical update.
Dr. Ron Najafi, Chairman and CEO of NovaBay Pharmaceuticals, commented: "We expect to report data from our urology trial in the third quarter, followed by the data from our dermatology and ophthalmology trials by the end of 2013 and in the first half of 2014, respectively. Positive data from these trials will provide the validation we need to continue discussions with current and potential partners as well as the FDA. Our portfolio of novel, topical anti-infectives fulfills our mission of going 'beyond antibiotics' by providing a safe and effective alternative to kill bacteria without developing resistance. Additionally, Aganocides do not linger in the environment and thus have significant environmental benefits over classical topical antibiotics."
Second Quarter 2013 Results
Net loss for the quarter ended June 30, 2013 was $4.1 million, compared to $2.3 million for the same period last year, due to the clinical trial activities. Cash, cash equivalents, and short-term investments totaled $11.4 million on June 30, 2013, compared with $16.9 million on December 31, 2012, a decrease of approximately $5.5 million. The decrease in cash was primarily attributable to an increase in enrollment in multiple clinical trials as well as an increase in general and administrative expenses.
NovaBay's license and collaboration revenue for the second quarter of 2013 was $0.8 million, compared to $0.9 million for the three months ended June 30, 2012. This decrease was related to lower reimbursable costs for the support of the impetigo trial. NovaBay did not recognize any other significant revenues for the three months ended June 30, 2013.
Research and development expenses for the three months ended June 30, 2013, were $2.9 million, compared to $2.4 million for the same period in 2012. The increase is related to clinical trial activities and patient enrollment as NovaBay continues to conduct its BAYnovationTM trial (adenoviral conjunctivitis) and BACTOvationTM trial (bacterial conjunctivitis), its urology trial for urinary catheter blockage and encrustation (UCBE), and scales up its production in anticipation of the phase 3 impetigo trial to be conducted by Galderma. Galderma is expected to reimburse NovaBay for a portion of production expenses in the future.
General and administrative expenses for the three months ended June 30, 2013 were 2.1 million, compared to $1.4 million for the three months ended June 30, 2012. This increase is primarily due to expanded business development activities related to NeutroPhase® launch activities as well as planned commercialization in the Company's dermatology and ophthalmology business units. This increase is consistent with the company's expectations as it supports its distributors' launch of NeutroPhase and prepares for the announcement of additional clinical data. NovaBay also incurred a noncash expense related to the modification in the terms of the warrants with Pioneer Pharma.
Business and Clinical Updates
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June: NovaBay announced its support for legislation by U.S. Rep. Jim Matheson (D-UT) to combat the growing crisis of antibiotic resistance. NovaBay believes that there must be a multi-pronged, comprehensive approach to combating antimicrobial resistance and Rep. Matheson's bill is an important contribution toward finding a viable long term solution. The Strategies to Address Antimicrobial Resistance (STAAR) Act, H.R. 2285, is aimed at improving the understanding and monitoring of the cause and spread of antimicrobial-resistant infections and improving the rate at which new antibiotics are developed.
- May: NovaBay entered into a collaboration and license agreement with Virbac, a global animal health company. Virbac exercised its March 2012 Feasibility and Option Agreement, thereby acquiring exclusive worldwide rights to develop NovaBay's proprietary compound, auriclosene (NVC-422), for global topical veterinary markets. NovaBay received an option exercise fee and is entitled to receive additional development and pre-commercial milestone payments. NovaBay also expects to receive royalties on the sale of any commercial products in the companion animal field. This agreement with Virbac is an important part of NovaBay's strategy of exploring the uses of auriclosene for a variety of indications, including veterinary medicine.
About NovaBay Pharmaceuticals, Inc.
NovaBay Pharmaceuticals is a biotechnology company focused on addressing the large unmet therapeutic needs of the global, topical anti-infective market with its Aganocide compounds, led by auriclosene. Auriclosene is a new chemical entity invented by NovaBay and has a broad spectrum of activity against bacteria, viruses and fungi. Aganocide compounds are based on the human body's natural immune system and the molecules involved in combating infections. Bacterial resistance to Aganocides is highly unlikely, as demonstrated in in vitro studies. Once pathogens penetrate the body's primary defense, the next line of defense is provided by the white blood cells. NovaBay has focused on understanding these molecules generated by the white blood cells and finding ways, by chemical modification, to allow them to be developed as therapeutic products with the potential to treat a wide range of local, non-systemic infections. As Aganocides® begin to supplement and thereby reduce the usage of classic topical antibiotics, they will help slow the rise of antibiotic resistance. Unlike classical, topical antibiotics, Aganocides are a socially responsible investment in that they do not linger in the environment.
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 | ||
| June 30, | December 31, | |
| 2013 | 2012 | |
| (in thousands, except per share data) | (unaudited) | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 6,594 | $ 12,735 |
| Short-term investments | 4,811 | 4,135 |
| Accounts receivable | 112 | 943 |
| Inventory | 48 | 23 |
| Prepaid expenses and other current assets | 427 | 445 |
| Total current assets | 11,992 | 18,281 |
| Property and equipment, net | 761 | 891 |
| Other assets | 74 | 63 |
| TOTAL ASSETS | $ 12,827 | $ 19,235 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Liabilities: | ||
| Current liabilities: | ||
| Accounts payable | $ 611 | $ 455 |
| Accrued liabilities | 1,708 | 1,497 |
| Deferred revenue | 470 | 1,221 |
| Total current liabilities | 2,789 | 3,173 |
| Deferred revenues - non-current | 1,037 | 671 |
| Deferred rent | 93 | 60 |
| Warrant liability | 1,698 | 1,282 |
| Total liabilities | 5,617 | 5,186 |
| Stockholders' equity: | ||
| Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at June 30, 2013 and December 31, 2012 | — | — |
| Common stock, $0.01 par value; 65,000 shares authorized at June 30, 2013 and December 31, 2012; 37,358 and 36,915 issued and outstanding at June 30, 2013 and December 31, 2012, respectively | 374 | 369 |
| Additional paid-in capital | 55,223 | 54,004 |
| Accumulated other comprehensive loss | (19) | (13) |
| Accumulated deficit during development stage | (48,368) | (40,311) |
| Total stockholders' equity | 7,210 | 14,049 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 12,827 | $ 19,235 |
| NOVABAY PHARMACEUTICALS, INC. | |||||
| (a development stage company) | |||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||
| (unaudited) | |||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
||||
| (in thousands, except per share data) |
2013 |
2012 |
2013 |
2012 |
Cumulative Period from July 1, 2002 (inception) to June 30, 2013 |
| Sales: | |||||
| Sales revenue | $ 17 | $ — | $ 80 | $ — | $ 80 |
| Cost of goods sold | 16 | — | 38 | — | 38 |
| Gross profit | 1 | — | 42 | — | 42 |
| Other revenue: | |||||
| License, collaboration and distribution revenue | $ 790 | $ 856 | $ 1,704 | $ 2,172 | $ 59,158 |
| Other revenues | 41 | 15 | 84 | 19 | 202 |
| Total other revenue | 831 | 871 | 1,788 | 2,191 | 59,360 |
| Operating expenses: | |||||
| Research and development | 2,937 | 2,378 | 5,911 | 4,642 | 66,057 |
| General and administrative | 2,045 | 1,368 | 3,556 | 2,909 | 43,191 |
| Total operating expenses | 4,982 | 3,746 | 9,467 | 7,551 | 109,248 |
| Operating loss | (4,150) | (2,875) | (7,637) | (5,360) | (49,846) |
| Non-cash gain (loss) on changes in fair value of warrants | 104 | 628 | (416) | 593 | 291 |
| Other income, net | 5 | 27 | 5 | 22 | 1,271 |
| Loss before income taxes | (4,041) | (2,220) | (8,048) | (4,745) | (48,284) |
| Provision for income taxes | (7) | (6) | (9) | (12) | (84) |
| Net loss | (4,048) | (2,226) | (8,057) | (4,757) | (48,368) |
| Change in unrealized gains (losses) on available-for-sale securities | (8) | (20) | (6) | (18) | (19) |
| Comprehensive loss | $ (4,056) | $ (2,246) | $ (8,063) | $ (4,775) | $ (48,387) |
| Net loss per share: | |||||
| Basic and diluted | $ (0.11) | $ (0.08) | $ (0.22) | $ (0.17) | |
| Shares used in per share calculations: | |||||
| Basic and diluted | 37,266 | 28,671 | 37,013 | 28,621 | |