| Near-Term Clinical Catalysts: |
| • Viral Conjunctivitis Trial Results to be Reported mid-2014 |
| • Start of Second Phase 2 in UCBE trial |
| • Initiation of a Pilot Study in Impetigo |
| Near-Term Commercial Catalysts: |
| • Launch of NeutroPhase by PBE |
| • Introduction of Advanced i-Lid CleanserTM at the American Society of Cataract and Refractive Surgery in Boston |
| • Introduction of CelleRxTM at the American Society for Aesthetic Plastic Surgery |
| Additional Commercial Opportunities for NeutroPhase® |
EMERYVILLE, Calif., March 7, 2014 (GLOBE NEWSWIRE) -- NovaBay Pharmaceuticals, Inc. (NYSE MKT:NBY), a clinical-stage biopharmaceutical company developing non-antibiotic, topical anti-microbial products, today reported fourth quarter 2013 and fiscal year 2013 financial results and provided a clinical and business update.
"We believe 2014 will be a year filled with value creating milestones for shareholders. Such important milestones include announcing results from our Phase 2 viral conjunctivitis study mid-year, beginning the next clinical study for UCBE, and also starting a pilot study for impetigo to test our optimized formulation," said Ron Najafi Ph.D., Chairman and CEO of NovaBay. "On the commercial side, our NeutroPhase product continues to make news as the leading advanced wound cleanser. We are also introducing two commercial opportunities: Our advanced i-Lid™ cleanser, designed for use in ophthalmological applications, and CelleRx™ for use in the field of aesthetic dermatology."
Fourth Quarter and Full Year 2013 Financial Results
As of December 31, 2013, cash, cash equivalents and short-term investments totaled $13.1 million, compared to $16.9 million at the end of 2012. The decrease in cash for the year was primarily attributable to an increase in enrollment in multiple clinical studies, as well as an increase in general and administrative expenses. NovaBay received $5.7 million equity investment from China Pioneer Pharma in the quarter ended December 31, 2013 and $2.7 million from warrant exercises in the two quarters ending December 31, 2013.
Net loss for the year ended December 31, 2013 was $16.0 million, compared to a loss of $7.0 million for the same period last year. Net loss for the three months ended December 31, 2013 was $4.1 million, compared to a loss of $2.4 million for the same period last year. The increased loss was a result of higher clinical trial expenditures, in addition to the reduction in partner revenues.
NovaBay's license and collaboration revenue for the quarter ended December 31, 2013 was $0.3 million, compared to $1.1 million for the same period of 2012. NovaBay's license and collaboration revenue for the year ended December 31, 2013 was $3.0 million, compared to $6.9 million for the year ended December 31, 2012. The decrease in license, collaboration and distribution revenue was related to a large reimbursement of $2.6 million received from Galderma in 2012 and a decrease in overall reimbursable costs from Galderma for support of the impetigo trial, which has been completed. NovaBay did not recognize any other significant revenues for the year ending December 31, 2013.
NovaBay's research and development expenses for the quarter ending December 31, 2013 were $4.1 million, compared to $2.1 million for the same period of 2012. Research and development expenses for the year ended December 31, 2013 were $12.5 million, compared to $9.3 million for the year ended December 31, 2012. The increase was primarily due to increases in the company's clinical trial costs, specifically related to the ongoing adenoviral clinical trial.
NovaBay expects to incur increasing research and development expenses in 2014 and in subsequent years as it continues to increase its focus on developing product candidates, both independently and in collaboration with its partners. In particular, the company expects to incur ongoing clinical, chemistry, and manufacturing expenses related to four healthcare markets in which it is pursuing opportunities: ophthalmology, dermatology, urology, and wound care.
General and administrative expenses for the quarter ended December 31, 2013 were $1.2 million, compared to $1.8 million for the same period of 2012. General and administrative expenses were $6.3 million in the year ended December 31, 2013, compared to $6.0 million in 2012. The increase for the year reflects higher marketing expenses and increased support for distribution of NeutroPhase. The company expects that general and administrative expenses will increase slightly as it continues to market its NeutroPhase product in 2014 and provide general support for its clinical trials.
Business and Clinical Updates
- February: A study in the journal Advances in Skin & Wound Care showed that the company's advanced wound cleanser, NeutroPhase®, achieved better results in lab tests than 18 other commercial products. Unlike any of the other products, NeutroPhase was able to kill bacteria in less than a minute.
- January: Mark M. Sieczkarek, Chairman of the Board and Chief Executive Officer of Solta Medical, and Dr. Massimo Radaelli, President and CEO of Noventia Pharma, were appointed to NovaBay's Board of Directors.
- December: Knowledge gained from the two previous impetigo studies is expected to lead to the use of an optimized formulation of auriclosene for an upcoming pilot study where NovaBay will be responsible for the planning, execution and funding. This trial will take the form of an incremental pilot study to determine an optimized formulation of auriclosene for impetigo. If successful, this formulation will pave the way for advanced clinical testing in the future. In November 2013, NovaBay announced that the auriclosene Phase 2b clinical study of impetigo had been completed. While the study showed that auriclosene is safe and well tolerated, it did not meet its primary clinical endpoint.
- December: As part of the expansion of the business relationship, China Pioneer Pharma (HK: 1345) agreed to purchase 5 million unregistered shares of NovaBay stock for a total investment of $5.7M. This investment includes commercialization rights to two new brands: CelleRx™ and i-Lid™ Cleanser. CelleRx™ is a new product developed by NovaBay for use in the field of aesthetic dermatology. NovaBay's other new product, i-Lid™ Cleanser, was designed for use in ophthalmological applications. An expanded partnership agreement covers the commercialization and distribution of these new brands in China and 11 countries in Southeast Asia.
About NovaBay Pharmaceuticals, Inc.: Going Beyond Antibiotics®
NovaBay Pharmaceuticals is a clinical-stage biopharmaceutical company focused on addressing the 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 that 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 published 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. NovaBay believes that Aganocides will help reduce the rise of antibiotic resistance as they begin to supplant the usage of classic topical antibiotics.
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. In this release and in our public filings, you can identify forward-looking statements by terms such as "likely," "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" and similar expressions intended to identify 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.
| NOVABAY PHARMACEUTICALS, INC. | ||
| (a development stage company) | ||
| CONSOLIDATED BALANCE SHEETS | ||
| December 31, | ||
| 2013 | 2012 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 10,500 | $ 12,735 |
| Short-term investments | 2,553 | 4,135 |
| Accounts receivable | 784 | 943 |
| Inventory | 231 | 23 |
| Prepaid expenses and other current assets | 723 | 445 |
| Total current assets | 14,791 | 18,281 |
| Property and equipment, net | 718 | 891 |
| Other assets | 141 | 63 |
| TOTAL ASSETS | $ 15,650 | $ 19,235 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 1,674 | $ 455 |
| Accrued liabilities | 1,616 | 1,497 |
| Deferred revenue | 337 | 1,221 |
| Total current liabilities | 3,627 | 3,173 |
| Deferred revenue - non-current | 1,534 | 671 |
| Deferred rent | 136 | 60 |
| Warrant liability | 1,837 | 1,282 |
| Total liabilities | 7,134 | 5,186 |
| Commitment and contingencies (Note 7) | ||
| Stockholders' Equity: | ||
| Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at December 31, 2013 and 2012 | — | — |
| Common stock, $0.01 par value; 65,000 shares authorized; 44,624 and 36,915 shares issued and outstanding at December 31, 2013 and 2012, respectively | 446 | 369 |
| Additional paid-in capital | 64,438 | 54,004 |
| Accumulated other comprehensive loss | (15) | (13) |
| Accumulated deficit during development stage | (56,353) | (40,311) |
| Total stockholders' equity | 8,516 | 14,049 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 15,650 | $ 19,235 |
| NOVABAY PHARMACEUTICALS, INC. | ||||
| (a development stage company) | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||
| Cumulative Period | ||||
| from July 1, 2002 | ||||
| (inception) to | ||||
| Year Ended December 31, | December 31, | |||
| 2013 | 2012 | 2011 | 2013 | |
| Sales: | ||||
| Sales revenue | $ 223 | $ 14 | $ — | $ 237 |
| Cost of goods sold | 162 | 8 | — | 170 |
| Gross profit | 61 | 6 | — | 67 |
| Other revenue: | ||||
| License, collaboration and distribution revenue | 3,045 | 6,855 | 10,993 | 60,499 |
| Other revenues | 209 | 78 | 26 | 313 |
| Total other revenue | 3,254 | 6,933 | 11,019 | 60,812 |
| Operating expenses: | ||||
| Research and development | 12,461 | 9,275 | 9,911 | 72,607 |
| Selling, general and administrative | 6,340 | 5,973 | 5,429 | 45,967 |
| Total operating expenses | 18,801 | 15,248 | 15,340 | 118,574 |
| Operating loss | (15,486) | (8,309) | (4,321) | (57,695) |
| Non-cash gain (loss) on change in fair value of warrants | (555) | 1,439 | (732) | 152 |
| Other income (expense), net | 1 | (155) | (30) | 1,267 |
| Loss before provision for income taxes | (16,040) | (7,025) | (5,083) | (56,276) |
| Provision for income taxes | (2) | (2) | (2) | (77) |
| Net loss | (16,042) | (7,027) | (5,085) | (56,353) |
| Other comprehensive income (loss): | ||||
| Change in unrealized gains (losses) on available-for-sale securities | (2) | 31 | (30) | (15) |
| Total comprehensive loss | $ (16,044) | $ (6,996) | $ (5,115) | $ (56,368) |
| Net loss per share: | ||||
| Basic and diluted | $ (0.42) | $ (0.24) | $ (0.20) | |
| Shares used in per share calculations: | ||||
| Basic and diluted | 38,183 | 29,448 | 25,773 | |
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NovaBay Contacts
Thomas J. Paulson
Chief Financial Officer
510-899-8809
Contact Tom
Ana Kapor
Director, Investor Relations and Corporate Communications
NovaBay Pharmaceuticals, Inc.
510-899-8889
Contact Ana