MISSISSAUGA, ON, July 30, 2014 /CNW/ - Nuvo Research Inc. (TSX:NRI), a specialty pharmaceutical company with a diverse portfolio of topical and immunology products, today announced its financial and operational results for the second quarter ended June 30, 2014.
WF10 Phase 2 Clinical Trial Update
The enrolment for the Phase 2 WF10 clinical trial for the treatment of allergic rhinitis commenced in March 2014 and to-date, 121 patients have been enrolled at 15 sites in Germany. Enrolment was slower than anticipated due to a late onset to the allergy season in Germany. The trial is a 160-subject, randomized, double blind, placebo-controlled, 4-arm multi-centre trial to assess the efficacy and safety of a regimen of five WF10 infusions for the treatment of patients with moderate to severe persistent allergic rhinitis. The Company expects the study to be completed in late 2014 with top-line results available in the first quarter of 2015.
Table of Selected Financial Results
For further details on the results, please refer to Nuvo's Management, Discussion and Analysis (MD&A) and Condensed Consolidated Interim Financial Statements which are available on the Company's website (www.nuvoresearch.com).
|Three months ended||Six months ended|
| June 30,
| June 30,
|Change|| June 30,
| June 30,
| (Canadian dollars in thousands,
except per share and share figures)
|Per share - basic and diluted||(0.23)||(0.25)||(0.53)||(0.63)|
Q2 Financial Highlights
Revenue, consisting of product sales, royalties, license fee revenue and research and other contract revenue for the three months ended June 30, 2014 was $3.9 million compared to $3.3 million for the three months ended June 30, 2013. The increase was attributable to higher product sales of Pennsaid 2% to support the launch in the U.S. and higher Pennsaid product sales to our distributors outside of the U.S. Total revenue for the six months ended June 30, 2014 was $6.6 million compared to $5.6 million in the comparative period.
Total operating expenses for the three months ended June 30, 2014 increased to $6.0 million from $5.6 million for the three months ended June 30, 2013. The increase was primarily due to higher General and Administrative (G&A) costs in the quarter. Total operating expenses for the six months ended June 30, 2014 increased to $11.7 million from $11.0 million in the comparative period.
Cost of Goods Sold (COGS) was unchanged at $1.5 million for the three months ended June 30, 2014 and June 30, 2013. The Company's gross margin on product sales increased to $0.7 million compared to $0.2 million in the comparative period, due to an increase in Pennsaid and Pennsaid 2% product sales in the quarter. Gross margin as a percent of product sales increased in the quarter to 32% from 9% in the comparative period. For the six months ended June 30, 2014, COGS increased to $2.7 million compared to $2.5 million for the six month ended June 30, 2013.
Research and Development expenses were unchanged at $1.5 million and $3.4 million for the three and six months ended June 30, 2014 and June 30, 2013. In the quarter, the costs associated with the Company's Phase 2 clinical trial for WF10 were offset by the savings realized from the closure of the Company's facility in Salt Lake City and the TPT Group office in 2013.
G&A expenses were $2.9 million for the three months ended June 30, 2014 compared to $2.3 million for the three months ended June 30, 2013. The increase in the quarter related to an increase in stock-based compensation and professional fees related to the Company's litigation with Mallinckrodt, partially offset by a decrease in non-cash charges related to amortization of the Company's intangible assets. G&A expenses for the six months ended June 30, 2014 were $5.3 million compared to $4.6 million for the six months ended June 30, 2013.
Net loss was $2.3 million for the three months ended June 30, 2014 compared to $2.2 million for the three months ended June 30, 2013. The increase in revenue in the quarter was offset by higher operating expenses and a foreign currency loss in the quarter compared to a foreign currency gain in the comparative period. Net loss was $5.1 million for the six months ended June 30, 2014 compared to $5.5 million for the six months ended June 30, 2013.
Cash and cash equivalents were $10.7 million as at June 30, 2014 compared to $12.6 million as at December 31, 2013.
Cash used in operating activities increased to $2.7 million for the three months ended June 30, 2014 compared to $2.0 million for the three months ended June 30, 2013. The increase was primarily due to higher investment in non-cash working capital in the quarter related to an increase in accounts receivable due to greater Pennsaid and Pennsaid 2% product sales. For the six months ended June 30, 2014, cash used in operating activities was $3.6 million compared to $3.8 million for the six months ended June 30, 2013.
Net cash used in financing activities totaled $0.7 million for the three months ended June 30, 2014 compared to $0.5 million for the three months ended June 30, 2013. During both periods, the Company made repayments on finance, lease and other obligations. Net cash provided by financing activities totaled $1.7 million for the six months ended June 30, 2014 compared to net cash used in financing activities of $0.9 million for the six months ended June 30, 2013.
The number of common shares outstanding as at June 30, 2014 was 10,239,619.
Pennsaid and Pennsaid 2% in the U.S.
According to IMS Health, a provider of dispensed prescription data, during the second quarter of 2014, U.S. prescriptions of Pennsaid 2% were 18,000 with an average of 1.23 bottles per script compared to 6,000 prescriptions in the first quarter of 2014. Pennsaid 2% was launched on February 10, 2014. Pennsaid prescriptions were 14,000 in the three months ended June 30, 2014, a 42% decrease from the prescriptions in the first quarter of 2014. The decrease in Pennsaid prescriptions was related to the launch of Pennsaid 2% as Mallinckrodt is working to switch the market from Pennsaid to Pennsaid 2% and the launch of a generic version of Pennsaid in the U.S. in May 2014.
About Nuvo Research Inc.
Nuvo (TSX:NRI) is a specialty pharmaceutical company with a diverse portfolio of products and technologies. The Company operates two distinct business units: the Topical Products and Technology (TPT) Group and the Immunology Group. The TPT Group has four U.S. Food and Drug Administration (FDA) approved commercial products, a pipeline of topical and transdermal products focusing on pain and dermatology and four drug delivery platforms that support the development of patented formulations that can deliver actives into or through the skin. The Immunology Group has two commercial products, a development program for the treatment of allergic rhinitis and an immune system modulation platform that has the potential to support treatments for a broad range of immune system related disorders. For additional company information visit www.nuvoresearch.com.
Certain statements in this news release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to the Company's anticipated use of proceeds from the Private Placement, the Company's future share price and the Company's possible election to accelerate the expiry date of any of the warrants or the brokers warrants and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include general business and economic uncertainties and adverse market conditions as well as other risk factors included in the Company's Annual Information Form dated February 20, 2014 under the heading "Risks Factors" and as described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. This list is not exhaustive of the factors that may impact the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. The factors underlying current expectations are dynamic and subject to change. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. All forward-looking statements in this news release are qualified by these cautionary statements. The forward-looking statements contained herein are made as of the date of this news release and except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: Nuvo Research Inc.
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