NovaBay Pharmaceuticals Provides Q1 - 2012 Financial Results

Published on Thursday, 03 May 2012 08:15 Written by TradersHuddle Staff

EMERYVILLE, Calif., May 3, 2012 (GLOBE NEWSWIRE) -- NovaBay Pharmaceuticals, Inc. (NYSE Amex:NBY), a clinical-stage biotechnology company developing novel anti-infective products for the treatment and prevention of microbial infections, today reported first quarter financial results for 2012.

"We are very pleased with the continued progress NovaBay is making in our clinical trials," said Dr. Ron Najafi, Chairman and CEO. "2012 will be a pivotal year for the Company as we move forward with clinical trials in three of our four business units. We also expect additional partnerships in 2012 for our FDA-cleared product NeutroPhase."

First Quarter Financial Results

As of March 31, 2012, the Company's cash, cash equivalents and short-term investments totaled $11.4 million compared to $14.1 million at the end of 2011. This decrease in cash is offset to some degree by the outstanding receivables balance of over $1.0 million, which was received in April 2012. This decrease in cash is anticipated as we begin preparing for our Phase 2b conjunctivitis trial, provide support for Galderma regarding the Phase 2b impetigo trial and continue our trial in UCBE.

NovaBay's license and collaboration revenue for the three months ended March 31, 2012, decreased to $1.3 million compared to $2.5 million for the three months ended March 31, 2011.  This decrease can be attributed to termination of the Company's agreement with former partner Alcon, for which NovaBay was receiving semi-annual support payments in 2011.

Research and development expenses decreased by 22% to $2.3 million for the three months ended March 31, 2012, from $2.9 million for the three months ended March 31, 2011.  This decrease can be attributed to the termination of the research activities related to Alcon in 2011, partially offset by the increase in clinical activities as we scale up our Impetigo, Conjunctivitis and UCBE trials.

NovaBay expects to incur increasing research and development expenses in 2012 and in subsequent years as it continues to advance its clinical programs in ophthalmology and urology.

General and administrative expenses remained relatively flat for the three months ended March 31, 2012, at $1.5 million compared to the same three month period in 2011. 

Net loss for the three months ended March 31, 2012 was $2.5 million, compared to $2.0 million for the same period in 2011.  This change was primarily a result of the license and collaboration revenue decrease noted above.

2012 Highlights

About NovaBay Pharmaceuticals, Inc.

Going Beyond Antibiotics

NovaBay Pharmaceuticals is a clinical-stage biotechnology company focused on addressing the large unmet therapeutic needs of the global anti-infective market with its two distinct categories of products. 

Aganocide® Compounds

NovaBay's first-in-class Aganocide® compounds, led by NVC-422, are patented, synthetic molecules with a broad spectrum of activity against bacteria, viruses and fungi.  Mimicking the mechanism of action that human white blood cells use against infections, Aganocides possess a reduced likelihood that bacteria or viruses will be able to develop resistance, which is critical for advanced anti-infectives.  Having demonstrated therapeutic proof-of-concept in Phase 2 clinical studies, these compounds are well suited to treat and prevent a wide range of local, non-systemic infections. NovaBay is currently focused in three large therapeutic markets:

  • Dermatology - Partnered with Galderma, a leading dermatology company, the companies are developing a gel formulation of NVC-422 for treating the highly contagious skin infection, impetigo.  A Phase 2b clinical study is planned for Q3, 2012. 
     
  • Ophthalmology - NovaBay is developing an eye drop formulation of NVC-422 for treating viral conjunctivitis, for which there is currently no FDA-approved treatment. The company expects to start enrollment in a global Phase 2b clinical study in this indication in the second quarter of 2012.
     
  •  Urology – NovaBay's irrigation solution containing NVC-422 is currently in Phase 2 clinical studies, with the goal of reducing the incidence of urinary catheter blockage and encrustation (UCBE) and the associated urinary tract infections. The company reported positive data from Part A of this study and expects to announce top-line results from Part B of this study later in Q3, 2012.

NeutroPhase®

In addition to our Aganocide compounds, NovaBay is also developing NeutroPhase®, which is an FDA 510(k)-cleared product for wound care.  NeutroPhase is a patented pure hypochlorous acid solution and has the potential to be well suited to treat the six-million-patients in the U.S. who suffer from chronic non-healing wounds, such as pressure, venous stasis and diabetic ulcers. 

NovaBay has begun securing commercial partnerships for NeutroPhase. In January 2012, NovaBay announced it had entered into a strategic marketing agreement with Pioneer Pharma Co., Ltd., a Shanghai-based company that markets high-end pharmaceutical products into China.  NovaBay expects to announce additional marketing agreements in select geographic markets around the world during 2012.

Forward-Looking Statements

This release contains forward-looking statements, which are based upon management's current expectations, assumptions, estimates, projections and beliefs. Statements regarding NovaBay's expectations including, but not limited to, (i) any potential plans for future clinical development of its Aganocide compounds and of bringing products to market including the expected timing of the initiation the Phase 2b impetigo clinical trial and Phase 2 conjunctivitis trial and expected timing of the results of the Phase 2, Part B UCBE trial; (ii) the potential efficacy of Aganocide & Neutrophase compounds, (iii) NovaBay's plan to commercialize NeutroPhase in 2013 resulting in its availability to the 6 million patients suffering from diabetic, pressure, and venous stasis ulcers; (iv) the development and potential benefits of, and the market opportunities for, NovaBay's product candidates (v) the potential to deliver the same or better efficacy than antibiotics and to address the growing problem of antibiotic resistance as well as other statements that relate to future events or results, are forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially 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: the risk that NovaBay may incur unexpected charges or need to or determined to engage in research and development or preclinical trials not previously planned, which could delay or prevent it from conducting the clinical trials it expects; inherent risks and uncertainties relating to difficulties or delays in conducting clinical trials; results of clinical trials are uncertain, and results in previous preclinical trials may not be replicated in clinical trials, which may cause the outcome of clinical trials to be different than NovaBay expects; the inherent uncertainty of patent protection for the company's intellectual property or trade secrets, which could result in NovaBay not being able to protect its intellectual property to the extent that it expects; and the risk of unexpected delays in the regulatory process which may delay the commencement or completion of clinical trials. 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 Annual Report on Form 10-K for the period ended December 31, 2011, under the caption "Risk Factors" in Item 1A of Part I of that report, filed with the Securities and Exchange Commission on March 27, 2012. 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.

Stay informed on NovaBay's progress:

NOVABAY PHARMACEUTICALS, INC.
(a development stage company)
 CONSOLIDATED BALANCE SHEETS
  March 31,
2012 		December 31,
2011
(in thousands, except per share data) (unaudited) (Note 2)
ASSETS    
Current assets:    
Cash and cash equivalents  $ 6,121  $ 8,428
Short-term investments   5,232  5,710
Accounts receivable  1,009  3
Prepaid expenses and other current assets  427  417
Total current assets  12,789  14,558
Property and equipment, net   1,148  1,270
Other assets  105  135
TOTAL ASSETS  $ 14,042  $ 15,963
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Liabilities:    
Current liabilities:    
Accounts payable  $ 439  $ 472
Accrued liabilities   1,161  1,061
Deferred revenue  1,334  1,305
Total current liabilities  2,934  2,838
Deferred revenues - non-current  869  945
Deferred rent  115  115
Warrant liability  2,756  2,721
Total liabilities  6,674  6,619
     
Stockholders' Equity:    
Preferred stock, $0.01 par value; 5,000 shares authorized; none outstanding at at March 31, 2012 and December 31, 2011  —   — 
Common stock, $0.01 par value; 65,000 shares authorized at March 31, 2012 and December 31, 2011; 28,827 and 28,587 issued and outstanding at March 31, 2012 and December 31, 2011, respectively  288  286
     
Additional paid-in capital  42,937  42,386
Accumulated other comprehensive loss  (42)  (44)
Accumulated deficit during development stage  (35,815)  (33,284)
Total stockholders' equity  7,368  9,344
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 14,042  $ 15,963
 
NOVABAY PHARMACEUTICALS, INC.
(a development stage company)
 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
       
  Three Months Ended
March 31, 		Cumulative Period
from July 1, 2002
(inception) to
March 31, 2012
(in thousands, except per share data) 2012 2011
Revenue:      
License and collaboration revenue  $ 1,315  $ 2,490  $ 51,914
Other revenues  5  —   31
Total revenue  1,320  2,490  51,945
       
Operating expenses:      
Research and development  2,264  2,920  53,135
General and administrative  1,541  1,515  35,195
Total operating expenses  3,805  4,435  88,330
Operating loss  (2,485)  (1,945)  (36,385)
       
Non-cash loss on increase in fair value of warrants  (35)  —   (767)
Other income (expense), net  (5)  (31)  1,416
       
Loss before income taxes  (2,525)  (1,976)  (35,736)
Provision for income taxes  (6)  (12)  (79)
Net loss  (2,531)  (1,988)  (35,815)
       
Change in unrealized gains (losses) on available-for sale securities  2  14  (42)
Total comprehensive loss  $ (2,529)  $ (1,974)  $ (35,857)
       
Net loss per share:      
Basic and diluted  $ (0.09)  $ (0.08)  
Shares used in per share calculations:      
Basic and diluted  28,572  23,428   
CONTACT: Investors:
         NovaBay Pharmaceuticals, Inc.
         Thomas J. Paulson
         Chief Financial Officer
         510-899-8809
         
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         Investors and Media:
         The Ruth Group
         
         Joshua Drumm, PhD (Investors)
         (646) 536-7006
         
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         Victoria Aguiar (Media)
         (646) 536-7013
         
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