- Avenova® unit sales set record for second consecutive
quarter
- Net product revenue increased 51% for 2020
- Exited 2020 with $12.0 million in cash and equivalents
- Avenova access expanded to CVS stores and CVS online
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three and twelve months ended December
31, 2020 and provides a business update.
“Avenova unit sales for the fourth quarter reached a new record,
driven primarily by online orders as well as through our physician
dispensed channel,” said Justin Hall, President and CEO of NovaBay
Pharmaceuticals. “Product revenue for the fourth quarter increased
10% over the prior year quarter. For the full year 2020, product
revenue grew an impressive 51%, which included tapping our
international health supply network early in the pandemic to sell
personal protection equipment (PPE) while critically important
product was in short supply.
“Our focus in 2021 is on growing sales of Avenova and CelleRx®
Clinical Reset™, a breakthrough product in the beauty market, which
we launched late last year,” he added. “This year we have already
expanded access to Avenova, which is being rolled out to CVS stores
across the U.S. and was recently made available on CVS.com. We also
are introducing new digital marketing programs for Avenova and
CelleRx Clinical Reset that combine innovative storytelling through
multiple social channels, with real-time analytics, reporting and
optimization.
“Through various actions we took last year, we strengthened and
simplified our balance sheet, reduced our cash burn, raised
operating capital and eliminated all major debt instruments. As a
result, we believe our funds are sufficient to support current
operations into 2022, including our new digital marketing
programs,” Mr. Hall added. “In addition to organic growth, we
continue to evaluate opportunities for revenue accretion through
acquisition or licensing of ophthalmic and skincare products to
expand our presence in these key markets.”
Fourth Quarter Financial Results
Net product revenue for the fourth quarter of 2020 was $1.9
million, a 10% increase from $1.7 million for the fourth quarter of
2019. Avenova revenue for the fourth quarter of 2020 was $1.5
million compared with $1.7 million for the fourth quarter of 2019.
The decrease reflects a $0.4 million increase in a reserve for
expired prescription product returns. Net product revenue for the
fourth quarter of 2020 included $0.4 million in sales of
NeutroPhase®, with no comparable revenue in the prior-year
period.
Gross margin on total sales, net, was 57% for the fourth quarter
of 2020, compared with 65% for the fourth quarter of 2019, with the
decrease primarily due to the increase in the returns reserve.
Operating expenses for the fourth quarter of 2020 were $2.8
million, compared with $3.3 million for the fourth quarter of 2019.
Sales and marketing expenses for the fourth quarter of 2020 were
$1.5 million, compared with $2.2 million for the fourth quarter of
2019, with the decrease primarily due to lower headcount of sales
representatives in the 2020 period and lower travel and related
expenses due to the impact of COVID-19, partially offset by an
increase in Avenova digital advertising and costs associated with
the Company’s relaunch of CelleRx Clinical Reset. General and
administrative (“G&A”) expenses for the fourth quarter of 2020
were $1.3 million, up slightly from $1.2 million for the fourth
quarter of 2019. Research and development (“R&D”) expenses for
the fourth quarter of 2020 were $36 thousand, compared with $18
thousand for the fourth quarter of 2019.
Operating loss for the fourth quarter of 2020 was $1.8 million,
compared with an operating loss of $2.2 million for the fourth
quarter of 2019.
Non-cash gain on the change of fair value of warrant liability
for the fourth quarter of 2020 was $8 thousand, compared with a
non-cash loss of $0.2 million for the fourth quarter of 2019. As of
the end of 2020, the Company no longer held any warrants that will
be adjusted to fair value in future periods.
Other expense, net, for the fourth quarter of 2019 was $0.3
million, which was due primarily to interest expense recognized on
a convertible note. There was no comparable charge in the fourth
quarter of 2020 as the convertible note was settled prior to the
end of the third quarter of 2020.
The net loss attributable to common stockholders for the fourth
quarter of 2020 was $1.8 million, or $0.04 per share, compared with
a net loss attributable to common stockholders for the fourth
quarter of 2019 of $3.5 million, or $0.13 per share.
Full Year Financial Results
Net product revenue for 2020 was $9.9 million, a 51% increase
from $6.6 million for 2019. Gross margin on net product revenue for
2020 was 60%, compared with 74% for 2019.
For 2020, sales and marketing expenses decreased 30% to $6.2
million and G&A expenses increased 12% to $5.9 million. R&D
expenses were $0.3 million for 2020 compared with $0.2 million for
2019.
Operating loss for 2020 was $6.4 million, a 32% improvement from
the operating loss of $9.4 million for 2019.
Non-cash loss on the change of fair value of warrant liability
for 2020 was $5.2 million, compared with a non-cash gain of $0.7
million for 2019.
Non-cash gain from adjustments to the fair value of an embedded
derivative liability for 2020 was $3 thousand, compared with $0.4
million for 2019. The embedded derivative liability was related to
a convertible note which was fully settled in September 2020.
Other income, net, for 2020 was $0.6 million, compared with
other expense, net, for 2019 of $1.4 million.
The net loss attributable to common stockholders for 2020 was
$11.0 million, or $0.31 per share, compared with a net loss
attributable to common stockholders for 2019 of $10.5 million, or
$0.48 per share.
NovaBay reported cash and cash equivalents of $12.0 million as
of December 31, 2020, compared with $6.9 million as of December 31,
2019. The Company raised net proceeds of $5.2 million from the sale
of common stock through an ATM agreement during the quarter ended
June 30, 2020 and $6.4 million from the renegotiation of warrants
during the quarter ended September 30, 2020.
Conference Call
NovaBay management will host an investment community conference
call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific
time) to discuss the Company’s financial and operational results
and to answer questions. Shareholders and other interested parties
may participate in the conference call by dialing 866-777-2509 from
within the U.S. or 412-317-5413 from outside the U.S., and
requesting the NovaBay Pharmaceuticals call.
A live webcast of the call will be available at
http://novabay.com/investors/events and will be archived for 90
days. A replay of the call will be available beginning two hours
after the call ends through April 15, 2021 by dialing 877-344-7529
from within the U.S., 855-669-9658 from Canada, or 412-317-0088
from outside the U.S., and entering the conference identification
number 10152832.
About NovaBay Pharmaceuticals, Inc.: Going Beyond
Antibiotics®
NovaBay Pharmaceuticals, Inc. is a biopharmaceutical company
focusing on high-quality, differentiated, anti-infective consumer
products: Avenova®, the premier antimicrobial lid and lash spray,
CelleRx® Clinical Reset™, a breakthrough product in the beauty
category, and NeutroPhase® Skin and Wound Cleanser for wound
healing. NovaBay’s products are formulated with its patented, pure,
stable, pharmaceutical grade hypochlorous acid that replicates the
antimicrobial chemicals used by white blood cells to fight
infection. NovaBay’s hypochlorous acid products do not cause
stinging or irritation, are non-toxic and non-sensitizing, making
them completely safe for regular use. Avenova is the only
commercial hypochlorous acid lid and lash spray product clinically
proven to reduce bacterial load on ocular skin surfaces, thus
effectively addressing the underlying cause of bacterial dry
eye.
Forward-Looking Statements
Except for historical information herein, matters set forth in
this press release are forward-looking within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995, including statements about the commercial
progress and future financial performance of NovaBay
Pharmaceuticals, Inc. This release contains forward-looking
statements that are based upon management’s current expectations,
assumptions, estimates, projections and beliefs. These statements
include, but are not limited to, statements regarding our business
strategies and current product offerings, potential future product
offerings, expanded access to our products, possible regulatory
clearance of any of our products or future products, and any future
revenue that may result from selling these products, as well as
generally the Company’s expected future financial results. These
forward-looking statements are identified by the use of words such
as “launch,” “grow,” “expand,” and “continue,” among others. These
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 the size of the potential
market for our products, the possibility that the available market
for the Company’s products will not be as large as expected, the
Company’s products will not be able to penetrate one or more
targeted markets, and revenues will not be sufficient to meet the
Company’s cash needs. Other risks relating to NovaBay’s business,
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-Q/K 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.
Socialize and Stay informed on
NovaBay’s progress
Like us on Facebook Follow us on Twitter Connect with NovaBay on
LinkedIn Visit NovaBay’s Website
Avenova Purchasing
Information
For NovaBay Avenova purchasing information: Please call
800-890-0329 or email sales@avenova.com. Avenova.com
CelleRx Clinical Reset Purchasing
Information
For NovaBay CelleRx Clinical Reset purchasing information Please
call 877-CELLERX www.CelleRx.com
Financial tables to follow
NOVABAY PHARMACEUTICALS,
INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands except par value
amounts)
December
31,
December
31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
11,952
$
6,937
Accounts receivable, net of allowance for
doubtful accounts ($0 and $51 at December 31, 2020 and December 31,
2019, respectively)
1,106
1,066
Inventory, net of allowance for excess and
obsolete inventory and lower of cost or estimated net realizable
value adjustments ($236 and $247 at December 31, 2020 and December
31, 2019, respectively)
608
492
Prepaid expenses and other current
assets
576
886
Total current assets
14,242
9,381
Operating lease right-of-use assets
436
1,252
Property and equipment, net
84
110
Other assets
476
477
TOTAL ASSETS
$
15,238
$
11,220
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
302
$
331
Accrued liabilities
2,115
1,778
Operating lease liabilities
416
930
Note payable, related party
—
1,202
Convertible note
—
1,409
Embedded derivative liability
—
3
Warrant liability
—
34
Total current liabilities
2,833
5,687
Operating lease
liabilities-non-current
87
505
Warrant liability
—
4,055
Total liabilities
2,920
10,247
Stockholders' equity:
Preferred stock: 5,000 shares authorized;
none outstanding at December 31, 2020 and December 31, 2019
—
—
Common stock, $0.01 par value; 75,000 and
50,000 shares authorized, 41,782 and 27,938 shares issued and
outstanding at December 31, 2020 and December 31, 2019,
respectively
418
279
Additional paid-in capital
147,963
125,718
Accumulated deficit
(136,063
)
(125,024
)
Total stockholders' equity
12,318
973
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
15,238
$
11,220
NOVABAY PHARMACEUTICALS,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands except per share
data)
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Sales:
Product revenue, net
$
1,878
$
1,702
$
9,916
$
6,556
Other revenue, net
10
2
18
43
Total sales, net
1,888
1,704
9,934
6,599
Cost of goods sold
813
593
3,970
1,738
Gross profit
1,075
1,111
5,964
4,861
Research and development
36
18
285
184
Sales and marketing
1,498
2,157
6,173
8,767
General and administrative
1,299
1,174
5,932
5,310
Total operating expenses
2,833
3,349
12,390
14,261
Operating loss
(1,758
)
(2,238
)
(6,426
)
(9,400
)
Non-cash gain (loss) on changes in fair
value of warrant liability
8
(187
)
(5,216
)
749
Non-cash gain on changes in fair value of
embedded derivative liability
—
1
3
424
Other (expense) income, net
—
(259
)
605
(1,425
)
Loss before provision for income taxes
(1,750
)
(2,683
)
(11,034
)
(9,652
)
Provision for income taxes
(4
)
(3
)
(5
)
(6
)
Net loss and comprehensive loss
$
(1,754
)
$
(2,686
)
$
(11,039
)
$
(9,658
)
Less: Preferred deemed dividend
—
800
—
800
Less: Retained earnings reduction related
to warrants down round feature triggered
—
—
—
29
Net loss attributable to common
stockholders
$
(1,754
)
$
(3,486
)
$
(11,039
)
$
(10,487
)
Net loss per share attributable to common
stockholders (basic)
$
(0.04
)
$
(0.13
)
$
(0.31
)
$
(0.48
)
Net loss per share attributable to common
stockholders (diluted)
$
(0.04
)
$
(0.13
)
$
(0.31
)
$
(0.48
)
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock
(basic)
41,776
27,630
35,076
21,641
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock
(diluted)
41,776
27,630
35,076
21,641
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210325005736/en/
NovaBay Contact Justin Hall
Chief Executive Officer and General Counsel 510-899-8800
jhall@novabay.com
Investor Contact LHA
Investor Relations Jody Cain 310-691-7100 jcain@lhai.com
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