via NewMediaWire -- Neovasc Inc. (“Neovasc” or the
“Company”) (NASDAQ, TSX: NVCN) today reported financial results for
the quarter ended March 31, 2022.
Recent Highlights
· Achieved Q1
revenue of approximately $611,000, an increase of 35% over the same
period in 2021, delivering a record first quarter.
· Activated 6
sites, enrolled 21 patients, and, of those, randomized the first 4
patients, in the COSIRA II IDE trial for the Neovasc Reducer™
(“Reducer”).
· Obtained
renewed NUB-1 reimbursement status in Germany.
· Announced
multiple third-party publications supporting safety, efficacy, and
cost savings related to use of the Reducer to treat refractory
angina.
· Replaced and
extended maturity of the Company’s debt with a new debt note with
the same lenders, now maturing in December 2025.
· Completed a common share
consolidation on April 29, 2022 expected to bring the Company
into compliance with the Nasdaq $1 minimum bid price rule on or
around May 13, 2022.
· Announced
the Dismissal with Prejudice of the class action litigation,
expecting a first brief to the Appeals court from the lead
plaintiff’s counsel on May 13, 2022.
“The first quarter of 2022 was another record
setting first quarter in revenue, with continued progress towards
our value-creation strategies, in particular on reimbursement,”
said Fred Colen, Neovasc President and Chief Executive Officer.
“We advanced the Reducer as a viable option to treat
refractory angina in Europe, through direct outreach to key opinion
leaders, securing positive reimbursement momentum, and by
announcing independent studies demonstrating the value of the
Reducer to patient, physicians, and payers at a time when
value-based care is increasing in importance. As for the
important US market, we qualified, trained and contracted the first
several U.S. clinics, and began enrolling patients in the
pivotal COSIRA II trial, which we believe will demonstrate the
benefits of the Reducer and help to inform a future PMA submission
to the FDA.”
Financial Results for the First Quarter Ended
March 31, 2022
For the three months ended March 31, 2022,
revenues increased by 35% to approximately $611,000, compared to
revenues of approximately $452,000 for the same period in
2021.
The cost of goods sold for the three months ended
March 31, 2022 was approximately $136,000 compared to approximately
$72,000 for the same period in 2021.
The overall gross margin for the three months
ended March 31, 2022 was 78% compared to 84% gross margin for the
same period in 2021, as the mix of sales was skewed toward sales
through distributors, due to a significant COVID-19 wave in
Germany, where the Company sells direct, which restricted Reducer
procedures in that country.
Total expenses for the three months ended March
31, 2022 were approximately $7.1 million compared to approximately
$10.6 million for the first quarter of 2021, representing a
decrease of approximately $3.5 million or 33%, substantially due to
an approximately $1.6 million reduction in legal and underwriting
fees associated with the February 2021 financing, an approximately
$1.3 million reduction in share based compensation expenses and an
approximately $1.0 million decrease in employee and other product
development expenses as the Company indefinitely paused the Tiara
TF transfemoral mitral value replacement program in June 2021.
The operating losses and comprehensive losses for
the three months ended March 31, 2022 were approximately $6.6
million and $10.4 million, respectively, or $3.75 basic and diluted
loss per share, as compared with approximately $10.2 million
operating losses and $2.9 million comprehensive loss, or $1.11
basic and diluted loss per share, for the same period in 2021.
The Company ended the quarter with approximately
$44.2 million in cash. The Company spent approximately $5.7 million
to fund operations, absorbed $1.4 million onto the balance sheet
and paid approximately $0.3 million to Strul Medical Group for
accrued interest on the old notes in excess of the new $13 million
note.
As of May 10, 2022, subsequent to the effect of
the share consolidation, the Company had
2,729,122 Common Shares issued and outstanding.
Conference Call and Webcast Information
Neovasc will be hosting a conference call and
audio webcast today at 4:30 pm ET to discuss these results.
Interested parties may access the conference call by dialing (877)
407-9208 or (201) 493-6784 (International) and reference Conference
ID 13729200. Participants wishing to join the call via webcast
should use the link posted on the investor relations section of the
Neovasc website at neovasc.com/investors/. A replay of the
webcast will be available approximately 30 minutes after the
conclusion of the call using the link on the Neovasc website.
About Neovasc
Neovasc is a specialty medical device company that
develops, manufactures, and markets products for the rapidly
growing cardiovascular marketplace. Its products include Reducer,
for the treatment of refractory angina, which is under clinical
investigation in the United States 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) |
|
March 31, |
December 31, |
2022 |
2021 |
|
|
|
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
$44,162,789 |
$51,537,367 |
Accounts receivable |
1,393,432 |
1,369,455 |
Finance lease receivable |
17,551 |
43,543 |
Inventory |
1,402,855 |
1,480,077 |
Prepaid expenses and other assets |
972,322 |
787,734 |
Total current assets |
47,948,949 |
55,218,176 |
|
|
|
Non-current
assets |
|
|
Restricted cash |
480,912 |
469,808 |
Right-of-use asset |
376,423 |
456,339 |
Property and equipment |
165,993 |
182,041 |
Deferred loss on 2020 derivative warrant
liabilities |
1,990,709 |
4,300,484 |
Deferred loss on 2021 derivative warrant
liabilities |
9,084,344 |
9,898,475 |
Total non-current assets |
12,098,381 |
15,307,147 |
|
|
|
Total
assets |
$60,047,330 |
$70,525,323 |
|
|
|
LIABILITIES
AND EQUITY |
|
|
Liabilities |
|
|
Current liabilities |
|
|
Accounts payable and accrued liabilities |
$3,472,350 |
$4,629,163 |
Lease liabilities |
250,667 |
273,145 |
2019 Convertible notes |
- |
38,633 |
2020 Convertible notes, warrants and
derivative |
- |
40,587 |
warrant liabilities |
Total current liabilities |
3,723,017 |
4,981,528 |
|
|
|
Non-Current Liabilities |
|
|
Lease liabilities |
207,139 |
272,652 |
2019 Convertible notes |
- |
6,548,796 |
2020 Convertible notes, warrants and derivative
warrant liabilities |
452,663 |
6,088,728 |
2021 Derivative warrant liabilities |
315,659 |
405,508 |
2022 Convertible notes |
11,577,235 |
- |
Total
non-current liabilities |
12,552,696 |
13,315,684 |
|
|
|
Total
liabilities |
$16,275,713 |
$18,297,212 |
|
|
|
Equity |
|
|
Share capital |
$440,827,120 |
$439,873,457 |
Contributed surplus |
41,322,143 |
40,355,952 |
Accumulated other comprehensive
loss |
(6,229,804) |
(7,885,024) |
Deficit |
(432,147,842) |
(420,116,274) |
Total equity |
43,771,617 |
52,228,111 |
|
|
|
Total
liabilities and equity |
$60,047,330 |
$70,525,323 |
|
|
|
NEOVASC
INC. |
Condensed Interim
Consolidated Statements of Loss and Comprehensive Loss |
For the three months ended
March 31, |
(Expressed in U.S.
dollars) |
|
2022 |
2021 |
|
|
|
REVENUE |
$610,747 |
$451,794 |
COST OF
GOODS SOLD |
(136,292) |
(72,393) |
GROSS
PROFIT |
474,455 |
379,401 |
|
|
|
EXPENSES |
|
|
Selling
expenses |
818,896 |
637,979 |
General and
administrative expenses |
3,003,530 |
5,292,569 |
Product
development and clinical trials expenses |
3,269,550 |
4,621,428 |
TOTAL
EXPENSES |
7,091,976 |
10,551,976 |
|
|
|
OPERATING
LOSS |
(6,617,521) |
(10,172,575) |
|
|
|
OTHER
INCOME/ (EXPENSE) |
|
|
Interest and
other income |
17,963 |
10,020 |
Interest and
other expense |
(349,840) |
(40,409) |
Gain/(Loss) on
foreign exchange |
10,717 |
(35,295) |
Unrealized
(loss)/gain on warrants, derivative liability warrants |
|
|
and convertible notes |
(151,343) |
12,450,053 |
Realized loss
on exercise or conversion and extinguishment of |
|
|
warrants, derivative liability warrants and convertible
notes |
(1,845,822) |
(2,114,651) |
Amortization
of deferred loss |
(1,223,564) |
(2,265,290) |
TOTAL OTHER
INCOME/ (EXPENSE) |
(3,541,889) |
8,004,428 |
LOSS BEFORE
TAX |
(10,159,410) |
(2,168,147) |
|
|
|
Tax
recovery |
- |
732 |
LOSS FOR
THE YEAR |
$(10,159,410) |
$(2,167,415) |
|
|
|
OTHER
COMPREHENSIVE LOSS FOR THE YEAR |
|
|
Fair market
value changes in convertible notes due to changes in own credit
risk |
(216,938) |
(705,586) |
|
(216,938) |
(705,586) |
LOSS AND
OTHER COMPREHENSIVE LOSS FOR THE YEAR |
$(10,376,348) |
$(2,873,001) |
|
|
|
LOSS PER
SHARE |
|
|
Basic and
diluted loss per share |
$(3.75) |
$(1.11) |
Contacts
Investors
Mike CavanaughICR WestwickePhone:
+1.617.877.9641Email: Mike.Cavanaugh@westwicke.com
Media
Sean LeousICR WestwickePhone:
+1.646.866.4012Email: Sean.Leous@westwicke.com
Forward Looking Statement DisclaimerCertain
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 expectation of the Company’s future compliance with
the Nasdaq minimum price rule and the timing thereof,
the expected timing of the first brief to the Appeal’s court from
the lead plaintiff, the belief that the COSIRA II trial will
demonstrate the benefits of the Reducer and help to inform a future
PMA submission to the FDA and the growing cardiovascular
marketplace. Forward-looking statements are based on estimates and
assumptions made by the Company in light of its experience and its
perception of historical trends, current conditions and expected
future developments, as well as other factors that the Company
believes are appropriate in the circumstances. Many factors could
cause the Company’s actual results, performance or achievements to
differ materially from those expressed or implied by the
forward-looking statements, including those described in the Risk
Factors section of the Company’s Annual Report on Form 20-F for the
year ended December 31, 2021 and in the Management’s Discussion and
Analysis for the three months ended March 31, 2022 (copies of which
may be obtained at www.sedar.com or www.sec.gov). These factors
should be considered carefully, and readers should not place undue
reliance on the Company’s forward-looking statements. The Company
has no intention and undertakes no obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
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