Nuvo Announces 2009 second quarter financial results
Recent Corporate Developments:
- Received correspondence from U.S. Food and Drug Administration
("FDA") on August 4, 2009 advising that it was extending the
Prescription Drug User Fee Act date ("PDUFA date") for Pennsaid
approval to November 4, 2009;
- Entered into a license and development agreement with Mallinckrodt
Inc., a subsidiary of Covidien (NYSE:COV), a leading global provider
of healthcare products, granting it exclusive rights to market and
sell Pennsaid(R), and its follow-on product, Pennsaid Plus(R), in the
United States;
- Pennsaid Phase 3 study results were published in June 2009 edition of
PAIN, the world's leading publication on pain research and
treatments, and the official journal of the International Association
for the Study of Pain; and,
- Nuvo had $26.3 million in cash and cash equivalents at June 30, 2009
following receipt of the US$10 million upfront payment received from
Covidien respecting its U.S. license of Pennsaid and Pennsaid Plus.
Subsequent to the quarter end, Nuvo received additional proceeds of
$5.7 million from the exercise of warrants that otherwise would have
expired on July 13, 2009.
“While a decision from the FDA on our submission for Pennsaid has been delayed, we remain optimistic that Pennsaid will ultimately be approved for marketing in
Financial Results:
(thousands of Canadian dollars)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
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Revenue $ 2,706 $ 2,085 $ 5,753 $ 4,321
Net loss $ (1,664) $ (2,864) $ (4,532) $ (5,135)
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Revenue, consisting of product sales, license fee revenue, and research and other contract revenue, for the three months ended
Gross margin on product sales declined slightly to
Total operating expenses, excluding foreign currency gains and losses, for the three-month period ended
Research and development expenses were
SG A expenses increased to
For the three months ended
Cash and cash equivalents increased substantially to
Cash used in operations improved to
Net cash used in investing activities totaled
Net cash provided by financing activities totaled
Detailed financial statements and the MD A are available at www.nuvoresearch.com or www.sedar.com.
About Pennsaid
Pennsaid, the Company’s lead product, is used to treat the pain and symptoms associated with knee osteoarthritis. Pennsaid combines a transdermal carrier (containing dimethyl sulfoxide, popularly known as “DMSO”) with diclofenac sodium, a leading non-steroidal anti-inflammatory drug (“NSAID”), and delivers the active drug through the skin directly to the site of pain. While, conventional oral NSAIDs expose patients to potentially serious systemic side effects such as gastrointestinal bleeding and cardiovascular risks, Nuvo’s clinical trials suggest that some of these systemic side effects occur less frequently with topically applied Pennsaid. There are more than 27 million Americans suffering from osteoarthritis and
About Nuvo Research Inc.
Nuvo is focused on the research and development of drug products delivered to and through the skin using its topical and transdermal drug delivery technologies. Nuvo’s lead product is Pennsaid, a topical NSAID used for the treatment of osteoarthritis of the knee. Nuvo intends to leverage its skin-penetrating technologies to create a portfolio of topical and transdermal products targeting a variety of indications.
Nuvo is a publicly traded, Canadian pharmaceutical company headquartered in
These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The Company considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but caution that these assumptions regarding future events, many of which are beyond the control of the Company, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations, are discussed in the annual report, as well as in the Company’s Annual Information Form for the year ended
Summary financial statements attached:
NUVO RESEARCH INC.
CONSOLIDATED BALANCE SHEETS
As at As at
June 30, December 31,
2009 2008
Unaudited Audited
(thousands of Canadian dollars) $ $
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ASSETS
CURRENT
Cash and cash equivalents 26,260 15,219
Accounts receivable 2,277 2,294
Other receivable 367 -
Inventories 1,724 1,393
Prepaid expenses and other 432 446
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TOTAL CURRENT ASSETS 31,060 19,352
Restricted cash 89 93
Property, plant and equipment 1,896 1,990
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TOTAL ASSETS 33,045 21,435
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities 2,400 2,736
Deferred revenue 2,241 2,241
Current portion of long-term debt and
capital lease obligations 162 181
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TOTAL CURRENT LIABILITIES 4,803 5,158
Deferred revenue 13,542 3,321
Long-term debt and capital lease obligations 227 320
Debentures 2,795 4,774
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TOTAL LIABILITIES 21,367 13,573
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SHAREHOLDERS' EQUITY
Common shares 202,524 189,603
Warrants 6,466 10,847
Contributed surplus 7,402 6,890
Accumulated other comprehensive income 114 114
Deficit (204,828) (199,592)
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TOTAL SHAREHOLDERS' EQUITY 11,678 7,862
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 33,045 21,435
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NUVO RESEARCH INC.
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
Three-months Six-months
Unaudited ended ended
(thousands of Canadian June 30, June 30, June 30, June 30,
dollars except per share 2009 2008 2009 2008
and share amounts) $ $ $ $
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REVENUE
Product sales 2,075 1,795 4,458 3,770
Cost of goods sold 1,449 1,001 2,583 2,085
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Gross margin on product sales 626 794 1,875 1,685
Other revenue
Licensing fees 560 250 1,120 500
Research and other contract
revenue 71 40 175 51
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1,257 1,084 3,170 2,236
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EXPENSES
Research and development 842 2,133 3,776 4,237
Selling, general and
administrative expenses 1,791 1,162 3,154 2,286
Stock-based compensation 132 216 264 366
Amortization of property,
plant, and equipment and
intangibles 148 207 297 412
Foreign currency (gain) loss (210) 36 (219) (243)
Interest expense 227 325 473 628
Interest income (9) (131) (43) (315)
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2,921 3,948 7,702 7,371
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Net Loss and total
comprehensive loss (1,664) (2,864) (4,532) (5,135)
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Net loss per common share -
basic and diluted (0.01) (0.01) (0.01) (0.02)
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Average number of common shares
outstanding - basic and
diluted (millions) 352.6 303.1 336.2 301.3
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NUVO RESEARCH INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three-months Six-months
ended ended
June 30, June 30, June 30, June 30,
Unaudited 2009 2008 2009 2008
(thousands of Canadian dollars) $ $ $ $
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OPERATING ACTIVITIES
Net loss (1,664) (2,864) (4,532) (5,135)
Items not involving current
cash flows:
Amortization 148 207 297 412
Deferred revenue recognized (560) (450) (1,120) (711)
Stock-based compensation
and payments 132 216 264 366
Deferred stock unit expense 145 - 239 -
Accretion of interest on
debentures 147 227 295 434
Other (273) 91 (257) (261)
Net change in non-cash
working capital (276) 284 (576) (342)
Proceeds from licensing
arrangements and advances
on research contracts 11,318 - 11,341 -
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CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 9,117 (2,289) 5,951 (5,237)
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INVESTING ACTIVITIES
Acquisition of property,
plant and equipment (148) (57) (203) (84)
Proceeds from sale of assets - - - 28
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CASH USED IN INVESTING ACTIVITIES (148) (57) (203) (56)
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FINANCING ACTIVITIES
Issuance of common shares and
warrants, net of related costs 3,246 947 5,442 947
Repayments of long-term debt
and capital lease obligations (32) (16) (94) (60)
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CASH PROVIDED BY
FINANCING ACTIVITIES 3,214 931 5,348 887
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Effect of exchange rate changes
on cash and cash equivalents (99) (298) (55) (37)
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Net change in cash and cash
equivalents during the period 12,084 (1,713) 11,041 (4,443)
Cash and cash equivalents,
beginning of period 14,176 19,061 15,219 21,791
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CASH AND CASH EQUIVALENTS,
END OF PERIOD 26,260 17,348 26,260 17,348
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Interest paid 166 128 261 154
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SOURCE Nuvo Research Inc.