via NewMediaWire -- Neovasc, Inc. ("Neovasc" or the "Company")
(NASDAQ, TSX: NVCN), today reported financial results for the first
quarter ended March 31, 2021.
First Quarter Highlights
-
Generated revenue of $451,794 in the quarter as Neovasc Reducer™
implants rebounded after being suppressed for much of 2020 due to
the COVID-19 pandemic.
-
Continued to advance our program to expand reimbursement for
Reducer in the EU and the US, and received a CPT Category III code
from the American Medical Association for transcatheter
implantation of a coronary sinus reduction device.
-
Completed a registered direct share offering in February, raising
gross proceeds of $72 million.
Subsequent Highlights
-
Held initial discussions with the U.S. Food and Drug Administration
(FDA) regarding the initiation of COSIRA II, a proposed study of
the Reducer device in the US.
-
Received ICD-10 procedural Code for Reducer device
implantation.
-
Assigned to MS-DRGs 228-229 for in-patient Reducer procedures in
the United States.
-
Enrolled the 300th Reducer patient in the Reducer-1 post-market
clinical study.
“Neovasc realized better-than-expected Reducer
implants in the first quarter, as we continued to advance our
efforts to commercialize the Reducer and further develop the Tiara
devices, aided tremendously by a significant event for Neovasc; the
completion of a $72 million private placement in February 2021.
This transaction solidifies the Company’s finances and importantly
provides a clear operational pathway for the next 18 months as we
seek to realize value for our two devices,” said Fred Colen,
President and Chief Executive Officer of Neovasc. “We are advancing
the development of our IDE Clinical trial for Reducer with the FDA,
in the form of an amended COSIRA II IDE Study and continue to
pursue expanded reimbursement status for this unique device in
Europe and the US. Our reimbursement progress in the U.S. has been
noteworthy, as we have gained CPT, ICD-10 and MS DRG codes in the
past several weeks. We also continued to enlarge the Reducer’s
footprint in Europe, and we are excited about the opportunities in
that market. We remain engaged with our notified body in Europe as
we are evaluating options to potentially pursue Tiara TA approval
under the Medical Device Regulation. Separately, we are continuing
to develop the next-generation Tiara TF device, with the goal of a
first-in-human implant towards the end of 2021. We look forward to
forging ahead in 2021 with our value creation strategies based on
our two devices.”
Financial results for the first quarter
ended March 31, 2021
Revenues decreased 15% to $451,794 for the
quarter ended March 31, 2021, compared to revenues of $532,895 for
the same period in 2020 as restrictions from COVID-19 in certain
European markets limited elective procedures including
Reducer.
The overall gross margin for the quarter ended
March 31, 2021 was 84%, compared to 77% gross margin for the same
period in 2020 as we sold more product in markets where we sell the
Reducer via our direct sales force.
Total expenses for the quarter ended March 31,
2021 were $10,551,976 compared to $7,564,437 for the same period in
2020, representing an increase of $2,987,539 explained by a
$1,630,124 increase in legal expenses and underwriters’ fees
related to the February 2021 Financing and a $1,335,634 increase in
non-cash share-based payments.
Operating losses and comprehensive losses for
the quarter ended March 31, 2021 were $10,172,575 and $2,873,001,
respectively, or $0.04 basic and diluted loss per share, as
compared with $7,156,105 operating losses and $2,673,406
comprehensive losses, or $0.38 basic and diluted loss per share,
for the same period in 2020.
Conference Call and Webcast
informationNeovasc will be hosting a conference call and
audio webcast today at 4:30 pm ET to discuss these results.
Domestic:
1-866-269-4262International:
1-856-344-9208
Parties wishing to access the call via webcast
should use the link in the Investors section of the Neovasc website
at https://www.neovasc.com/investors/. A replay of the
webcast will be available in the Investors section of the website
approximately 30 minutes after the conclusion of the call.
About Neovasc Inc.Neovasc is a
specialty medical device company that develops, manufactures and
markets products for the rapidly growing cardiovascular
marketplace. The Company is a leader in the development of
minimally invasive transcatheter mitral valve replacement
technologies, and minimally invasive devices for the treatment of
refractory angina. Its products include the Neovasc Reducer™, for
the treatment of refractory angina, which is not currently
commercially available in the United States (2 U.S. patients have
been treated under Compassionate Use) and has been commercially
available in Europe since 2015, and Tiara™, for the transcatheter
treatment of mitral valve disease, which is currently under
clinical investigation in the United States, Canada, Israel and
Europe. For more information, visit: www.neovasc.com.
NEOVASC
INC.Condensed Interim Consolidated
Statements of Financial Position(Expressed in U.S. dollars)
(Unaudited)
|
March 31,2021 |
December 31,2020 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
|
$
70,493,894 |
$ 12,935,860 |
Accounts receivable |
|
1,073,745 |
987,057 |
Finance lease receivable |
|
99,876 |
95,849 |
Inventory |
|
903,277 |
839,472 |
Research and development supplies |
|
318,966 |
167,378 |
Prepaid expenses and other assets |
|
652,489 |
705,471 |
Total current assets |
|
73,542,247 |
15,731,087 |
|
|
|
|
Non-current assets |
|
|
|
Restricted cash |
|
477,271 |
470,460 |
Right-of-use asset |
|
736,998 |
830,551 |
Finance lease receivable |
|
17,634 |
42,841 |
Property and equipment |
|
770,333 |
803,280 |
Deferred loss on 2021 derivative warrant
liabilities |
|
14,658,134 |
- |
Total non-current assets |
|
16,660,370 |
2,147,132 |
|
|
|
|
Total assets |
|
$
90,202,617 |
$ 17,878,219 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
|
$
5,095,860 |
$
7,243,500 |
Lease liabilities |
|
297,342 |
342,910 |
2019 Convertible notes |
|
154,431 |
38,633 |
2020 Convertible notes and warrants and derivative
warrant liabilities |
|
141,248 |
37,525 |
Total current liabilities |
|
5,688,881 |
7,662,568 |
|
|
|
|
Non-current Liabilities |
|
|
|
Lease liabilities |
|
526,354 |
596,881 |
2019 Convertible notes |
|
6,241,751 |
6,156,724 |
2020 Convertible notes and warrants and derivative
warrant liabilities |
|
2,433,303 |
1,484,529 |
2021 Derivative warrant liabilities |
|
3,414,080 |
- |
Total non-current liabilities |
|
12,615,488 |
8,238,134 |
|
|
|
|
Total liabilities |
|
$
18,304,369 |
$ 15,900,702 |
|
|
|
|
Equity |
|
|
|
Share capital |
|
$ 439,485,101 |
$ 369,775,383 |
Contributed surplus |
|
38,129,070 |
35,045,056 |
Accumulated other comprehensive loss |
|
(8,321,303) |
(7,615,717) |
Deficit |
|
(397,394,620) |
(395,227,205) |
Total equity |
|
$
71,898,248 |
$
1,977,517 |
|
|
|
|
Total
liabilities and equity |
|
$
90,202,617 |
$ 17,878,219 |
|
|
|
|
|
|
NEOVASC INC.Condensed Interim Consolidated
Statements of Loss and Comprehensive LossFor the three months
ended March 31,(Expressed in U.S. dollars) (Unaudited)
|
2021 |
2020 |
|
|
|
REVENUE |
$
451,794 |
$
532,895 |
COST OF GOODS SOLD |
(72,393) |
(124,563) |
GROSS PROFIT |
379,401 |
408,332 |
|
|
|
EXPENSES |
|
|
Selling expenses |
637,979 |
553,529 |
General and administrative expenses |
5,292,569 |
2,487,502 |
Product development and clinical trials expenses |
4,621,428 |
4,523,406 |
|
10,551,976 |
7,564,437 |
|
|
|
OPERATING LOSS |
(10,172,575) |
(7,156,105) |
|
|
|
OTHER INCOME/(EXPENSE) |
|
|
Interest and other income |
10,020 |
33,669 |
Interest and other expense |
(40,409) |
29,336 |
Loss
on foreign exchange |
(35,295) |
(651) |
Unrealized gain on warrants, derivative liability warrants and
convertible notes |
12,450,053 |
3,132,982 |
Realized loss on exercise or conversion of warrants, derivative
liability warrants and convertible notes |
(2,114,651) |
(143,750) |
Amortization of deferred loss |
(2,265,290) |
- |
|
8,004,428 |
3,051,586 |
LOSS BEFORE TAX |
(2,168,147) |
(4,104,519) |
|
|
|
Tax
expense |
732 |
(7,072) |
LOSS FOR THE PERIOD |
$
(2,167,415) |
$
(4,111,591) |
|
|
|
OTHER COMPREHENSIVE INCOME FOR THE PERIOD |
|
|
Fair market value changes in convertible
notes due to changes in own credit risk |
(705,586) |
1,438,185 |
LOSS AND OTHER COMPREHENSIVE LOSS
FOR THE PERIOD |
$
(2,873,001) |
$
(2,673,406) |
|
|
|
LOSS PER SHARE |
|
|
Basic
and diluted loss per share |
$
($0.04) |
$
(0.38) |
|
|
|
|
|
|
InvestorsMike CavanaughWestwicke/ICRPhone:
+1.646.877.9641Mike.Cavanaugh@westwicke.com
MediaSean LeousWestwicke/ICR Phone:
+1.646.866.4012Sean.Leous@westwicke.com
Forward-Looking Statement Disclaimer
Certain statements in this news release contain
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws that may not be based on historical fact. When used
herein, the words "expect", "anticipate", "estimate", "may",
"will", "should", "intend," "believe", and similar expressions, are
intended to identify forward-looking statements. Forward-looking
statements may involve but are not limited to, the Company’s
operational pathway for the next 18 months, the development of the
Company’s IDE trial for Reducer with the FDA, the expanded
reimbursement status for the Reducer in Europe and the US, the
potential pursuit of Tiara TA approval under the Medical Device
Directive, the Company’s plans and timelines regarding the US study
of the Tiara TF device, expectations as to the future growth of the
Company, the expansion of its product range and the growing
cardiovascular marketplace. Many factors and assumptions could
cause the Company's actual results, performance or achievements to
differ materially from those expressed or implied by the
forward-looking statements, including, without limitation, the
doubt about the Company’s ability to continue as a going concern;
risks related to the recent COVID-19 coronavirus outbreak or other
health epidemics, which could significantly impact the Company’s
operations, sales or ability to raise capital or enroll patients in
clinical trials and complete certain Tiara development milestones
on the Company’s expected schedule; risks relating to the Company’s
need for significant additional future capital and the Company’s
ability to raise additional funding; risks relating to the sale of
a significant number of Common Shares; risks relating to the
possibility that the Company’s common shares (the “Common Shares”)
may be delisted from the Nasdaq or the TSX, which could affect
their market price and liquidity; risks relating to the Company’s
conclusion that it did have effective internal control over
financial reporting as of December 31, 2020 but not at December 31,
2019 and 2018; risks relating to the Common Share price being
volatile; risks relating to the possibility that the Common Shares
may be delisted from the Nasdaq or the TSX, which could affect
their market price and liquidity; risks relating to the Company’s
significant indebtedness, and its effect on the Company’s financial
condition; risks relating to lawsuits that the Company is subject
to, which could divert the Company’s resources and result in the
payment of significant damages and other remedies; risks relating
to claims by third-parties alleging infringement of their
intellectual property rights; risks relating to the Company’s
ability to establish, maintain and defend intellectual property
rights in the Company’s products; risks relating to results from
clinical trials of the Company’s products, which may be unfavorable
or perceived as unfavorable; the Company’s history of losses and
significant accumulated deficit; risks associated with product
liability claims, insurance and recalls; risks relating to use of
the Company’s products in unapproved circumstances, which could
expose the Company to liabilities; risks relating to competition in
the medical device industry, including the risk that one or more
competitors may develop more effective or more affordable products;
risks relating to the Company’s ability to achieve or maintain
expected levels of market acceptance for the Company’s products, as
well as the Company’s ability to successfully build its in-house
sales capabilities or secure third-party marketing or distribution
partners; risks relating to the Company’s ability to convince
public payors and hospitals to include the Company’s products on
their approved products lists; risks relating to new legislation,
new regulatory requirements and the efforts of governmental and
third-party payors to contain or reduce the costs of healthcare;
risks relating to increased regulation, enforcement and inspections
of participants in the medical device industry, including frequent
government investigations into marketing and other business
practices; risks relating to the extensive regulation of the
Company’s products and trials by governmental authorities, as well
as the cost and time delays associated therewith; risks relating to
post-market regulation of the Company’s products; risks relating to
health and safety concerns associated with the Company’s products
and industry; risks relating to the Company’s manufacturing
operations, including the regulation of the Company’s manufacturing
processes by governmental authorities and the availability of two
critical components of the Reducer; risks relating to the
possibility of animal disease associated with the use of the
Company’s products; risks relating to the manufacturing capacity of
third-party manufacturers for the Company’s products, including
risks of supply interruptions impacting the Company's ability to
manufacture its own products; risks relating to the Company’s
dependence on limited products for substantially all of the
Company’s current revenues; risks relating to the Company’s
exposure to adverse movements in foreign currency exchange rates;
risks relating to the possibility that the Company could lose its
foreign private issuer status under U.S. federal securities laws;
risks relating to the possibility that the Company could be treated
as a "passive foreign investment company"; risks relating to
breaches of anti-bribery laws by the Company’s employees or agents;
risks relating to future changes in financial accounting standards
and new accounting pronouncements; risks relating to the Company’s
dependence upon key personnel to achieve its business objectives;
risks relating to the Company’s ability to maintain strong
relationships with physicians; risks relating to the sufficiency of
the Company’s management systems and resources in periods of
significant growth; risks relating to consolidation in the health
care industry, including the downward pressure on product pricing
and the growing need to be selected by larger customers in order to
make sales to their members or participants; risks relating to the
Company’s ability to successfully identify and complete corporate
transactions on favorable terms or achieve anticipated synergies
relating to any acquisitions or alliances; risks relating to
conflicts of interests among the Company's officers and directors
as a result of their involvement with other issuers; and risks
relating to anti-takeover provisions in the Company’s constating
documents which could discourage a third-party from making a
takeover bid beneficial to the Company’s shareholders.These risk
factors and others relating to the Company are discussed in greater
detail in the "Risk Factors" section of the Company's Annual
Information Form and in the Management's Discussion and Analysis
for the three months ended March 31, 2021 (copies of which may be
obtained at www.sedar.com or www.sec.gov). The Company has no
intention and undertakes no obligation to update or revise any
forward-looking statements beyond required periodic filings with
securities regulators, whether as a result of new information,
future events or otherwise, except as required by law.
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