Innovus Pharmaceuticals Reports a Quarterly Net Revenue Increase of 99.2% and Net Loss Decrease of 74.1%
Compared to the Same Period in 2016
FlutiCare™ on Track for Q4 2017 Launch
Innovus Pharmaceuticals, Inc. (“Innovus Pharma” or the “Company”) (OTCQB: INNV) today announced second quarter 2017 net revenue
of $2.0 million compared to $1.0 million in net revenue for the same period in 2016. Net revenue for the six months ended June 30,
2017 was $4.2 million compared to $1.2 million for the same period in 2016. Net loss for the second quarter 2017 was $1.1 million
compared to $4.4 million for the same period in 2016 and the net loss for the six months ended June 30, 2017 and 2016 was $3.7
million and $5.9 million, respectively.
“We continue to increase our revenue year over year and decrease our operating loss sequentially quarter over quarter to meet
our profitability goal entering 2018,” stated Bassam Damaj, President and Chief Executive Officer of Innovus Pharma. “With the
FlutiCare™ launch on the horizon, our push for greater growth and revenue is the icing on the cake,” continued Dr. Damaj.
Financial highlights for the three months ended June 30, 2017 included:
- Net revenue totaled $2.0 million for the three months ended June 30, 2017, compared to net revenue of
$1.0 million for the three months ended June 30, 2016.
- Gross margin increased to 80.0% for the three months ended June 30, 2017, significantly higher than
the gross margin for the three months ended June 30, 2016 which totaled 74.2%.
- Total operating expense was $3.2 million for the three months ended June 30, 2017 or a sequential
quarter over quarter decrease of $0.7 million or 17.6% when compared to the three months ended March 31, 2017.
- Sequential quarter over quarter loss from operations decreased by $0.5 million or 32.3% to $1.1
million for the three months ended June 30, 2017 compared to the three months ended March 31, 2017.
- Net loss totaled $1.1 million, or ($0.01) per common share, for the three months ended June 30, 2017
representing a 74.1% decrease year over year. The net loss included $0.3 million in non-cash expense related to the amortization
of debt discounts, stock-based compensation and depreciation and amortization. Net loss for the three months ended June 30, 2016
totaled $4.4 million or ($0.05) per common share.
- Sequential quarter over quarter cash used in operations decreased to approximately $474,000 for the
three months ended June 30, 2017 compared to approximately $496,000 for the three months ended March 31, 2017.
- Cash balance totaled $1.8 million at June 30, 2017.
Financial highlights for the six months ended June 30, 2017 included:
- Net revenue totaled $4.2 million for the six months ended June 30, 2017, compared to net revenue of
$1.2 million for the six months ended June 30, 2016.
- Gross margin increased to 79.9% for the six months ended June 30, 2017, significantly higher than
gross margin for the six months ended June 30, 2016 which totaled 69.2%.
- Total operating expense increased to $7.0 million and included $0.7 million in non-cash share-based
compensation and $0.3 million in non-cash depreciation and amortization for the six months ended June 30, 2017.
- Net loss totaled $3.7 million, or ($0.02) per common share, for the six months ended June 30, 2017.
The net loss included a non-cash expense of $0.3 million for the loss on extinguishment of debt as a result of the prepayment of
the remaining 2016 convertible debentures. The net loss also included interest expense of $0.7 million, of which $0.6 million was
non-cash and related to the amortization of debt discounts. Net loss for the six months ended June 30, 2016 totaled $5.9 million
or ($0.08) per common share.
Second quarter 2017 and recent developments:
- Entered into a major supply agreement in May 2017 with West-Ward Pharmaceuticals International
Limited, a wholly-owned subsidiary of Hikma Pharmaceuticals PLC to launch FlutiCare™ in the fourth quarter of 2017 under their
approved OTC ANDA No. 207597 for fluticasone propionate nasal spray USP, 50 mcg per spray;
- Ordered our first commercial batch of 220,000 units of FlutiCare™ for our expected fourth quarter
launch in the U.S.;
- Entered into the oncology supportive care market by signing an exclusive license agreement in June
2016 to two GRAS-Listed OTC compounds for Cachexia and muscle growth and repair from the University of Iowa Research
Foundation;
- Entered into an exclusive license and distribution agreement with Densmore Pharmaceutical
International in April 2017 for the commercialization of Zestra® in France and Belgium;
- Expanded the exclusive license and distribution territory under our agreement with Densmore to
Singapore and Vietnam in July 2017;
- Entered into an exclusive license and distribution agreement with Luminarie Pty Ltd. in May 2017 for
the commercialization of Zestra® and Zestra Glide® in Australia, New Zealand and the Philippines;
- Approval notification as a Class I medical device was received to commercialize Zestra® in Australia
in July 2017;
- The combination of Apeaz™ cream for arthritis pain relief and ArthriVarx™, a supplement designed to
maximize and support joint health, launched under the Beyond Human® Sales and Marketing Platform in July 2017;
- ProstaGorx™, a clinical strength, multi-response prostate supplement, scientifically formulated to
effectively maintain good prostate health, was launched under the Beyond Human® Sales and Marketing Platform in May 2017;
- AllerVarx™, a clinically proven supplement for the relief of allergy symptoms, was launched under the
Beyond Human® Sales and Marketing Platform in May 2017;
- Expanded product approval for Zestra Glide® and Sensum+® in the 28 countries of the European Union;
and
- Expanded patent coverage and filing for Vesele® in the United States and for Sensum+® in Morocco and
the 28 countries of the European Union.
The Company will host a conference call at 4:15 p.m. ET/1:15 p.m. PT today to discuss the financial results and recent business
developments. To participate in the call, please dial 1-877-883-0383 for domestic callers or 1-412-902-6506 for international
callers. Participant Elite Entry Number: 2626860. A replay of the call will be available for 30 days. To access the
replay, dial 1-877-344-7529 domestically or 1-412-317-0088 internationally and reference Conference ID: 10111229. The replay will
be available shortly after the end of the conference call.
|
Consolidated Statements of Operations
|
|
|
|
|
(Unaudited)
For the
|
| Three Months Ended |
| June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
| Net revenue: |
|
|
|
|
| Product sales, net |
|
$ |
2,031,157 |
|
|
$ |
1,019,520 |
|
| License revenue |
|
|
7,500 |
|
|
|
- |
|
| Net revenue |
|
|
2,038,657 |
|
|
|
1,019,520 |
|
|
|
|
|
|
| Operating expense: |
|
|
|
|
| Cost of product sales |
|
|
408,579 |
|
|
|
262,934 |
|
| Research and development |
|
|
15,063 |
|
|
|
3,892 |
|
| Sales and marketing |
|
|
1,555,736 |
|
|
|
249,515 |
|
| General and administrative |
|
|
1,182,235 |
|
|
|
945,572 |
|
| Total operating expense |
|
|
3,161,613 |
|
|
|
1,461,913 |
|
|
|
|
|
|
| Loss from operations |
|
|
(1,122,956 |
) |
|
|
(442,393 |
) |
|
|
|
|
|
| Other income and (expense): |
|
|
|
|
| Interest expense |
|
|
(110,130 |
) |
|
|
(1,860,399 |
) |
| Other income (expense), net |
|
|
(206 |
) |
|
|
111 |
|
| Fair value adjustment for contingent consideration |
|
|
98,979 |
|
|
|
(16,750 |
) |
| Change in fair value of derivative liabilities |
|
|
3,463 |
|
|
|
(2,040,909 |
) |
| Total other expense, net |
|
|
(7,894 |
) |
|
|
(3,917,947 |
) |
|
|
|
|
|
| Loss before provision for income taxes |
|
|
(1,130,850 |
) |
|
|
(4,360,340 |
) |
|
|
|
|
|
| Provision for income taxes |
|
|
3,200 |
|
|
|
- |
|
|
|
|
|
|
| Net loss |
|
$ |
(1,134,050 |
) |
|
$ |
(4,360,340 |
) |
|
|
|
|
|
| Net loss per share of common stock – basic and diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
| Weighted average number of shares of common stock outstanding – basic and
diluted |
|
|
159,997,395 |
|
|
|
85,395,846 |
|
|
|
|
|
(Unaudited)
For the
|
| Six Months Ended |
| June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
| Net revenue: |
|
|
|
|
| Product sales, net |
|
$ |
4,208,447 |
|
|
$ |
1,243,983 |
|
| License revenue |
|
|
7,500 |
|
|
|
1,000 |
|
| Net revenue |
|
|
4,215,947 |
|
|
|
1,244,983 |
|
|
|
|
|
|
| Operating expense: |
|
|
|
|
| Cost of product sales |
|
|
849,055 |
|
|
|
383,057 |
|
| Research and development |
|
|
18,246 |
|
|
|
3,892 |
|
| Sales and marketing |
|
|
3,243,087 |
|
|
|
285,011 |
|
| General and administrative |
|
|
2,886,898 |
|
|
|
2,233,309 |
|
| Total operating expense |
|
|
6,997,286 |
|
|
|
2,905,269 |
|
|
|
|
|
|
| Loss from operations |
|
|
(2,781,339 |
) |
|
|
(1,660,286 |
) |
|
|
|
|
|
| Other income and (expense): |
|
|
|
|
| Interest expense |
|
|
(667,609 |
) |
|
|
(2,251,250 |
) |
| Loss on extinguishment of debt |
|
|
(304,828 |
) |
|
|
- |
|
| Other income (expense), net |
|
|
(822 |
) |
|
|
1,876 |
|
| Fair value adjustment for contingent consideration |
|
|
126,154 |
|
|
|
(22,334 |
) |
| Change in fair value of derivative liabilities |
|
|
(48,193 |
) |
|
|
(1,983,315 |
) |
| Total other expense, net |
|
|
(895,298 |
) |
|
|
(4,255,023 |
) |
|
|
|
|
|
| Loss before provision for income taxes |
|
|
(3,676,637 |
) |
|
|
(5,915,309 |
) |
|
|
|
|
|
| Provision for income taxes |
|
|
3,200 |
|
|
|
- |
|
|
|
|
|
|
| Net loss |
|
$ |
(3,679,837 |
) |
|
$ |
(5,915,309 |
) |
|
|
|
|
|
| Net loss per share of common stock – basic and diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
| Weighted average number of shares of common stock outstanding – basic and
diluted |
|
|
147,617,064 |
|
|
|
70,271,333 |
|
| |
| |
|
Condensed Consolidated Balance Sheet Data
|
| |
|
|
June 30, |
|
December 31, |
| 2017 |
|
2016 |
|
|
(Unaudited) |
|
(1)
|
| Assets |
|
|
|
|
| Cash |
|
$ |
1,824,633 |
|
$ |
829,933 |
| Accounts receivable, net |
|
|
21,148 |
|
|
33,575 |
| Prepaid expense and other current assets |
|
|
394,273 |
|
|
863,664 |
| Inventories |
|
|
586,455 |
|
|
599,856 |
| Intangible assets & other non-current assets |
|
|
5,587,780 |
|
|
5,900,350 |
| Total assets |
|
$ |
8,414,289 |
|
$ |
8,227,378 |
|
|
|
|
|
| Liabilities & Stockholders' Equity |
|
|
|
|
| Accounts payable and accrued expense |
|
$ |
1,256,551 |
|
$ |
1,210,050 |
| Total accrued compensation |
|
|
2,576,539 |
|
|
2,299,593 |
| Deferred revenue and customer deposits |
|
|
46,769 |
|
|
11,000 |
| Accrued interest payable |
|
|
20,587 |
|
|
47,782 |
| Total notes payable and non-convertible debenture, net of discount |
|
|
819,252 |
|
|
681,127 |
| Total derivative liabilities |
|
|
90,206 |
|
|
483,744 |
| Total contingent consideration |
|
|
1,559,763 |
|
|
1,685,917 |
| Convertible debentures, net of discount |
|
|
- |
|
|
714,192 |
| Total stockholders' equity |
|
|
2,044,622 |
|
|
1,093,973 |
| Total liabilities and stockholders’ equity |
|
$ |
8,414,289 |
|
$ |
8,227,378 |
| |
|
(1) The Condensed Consolidated Balance Sheet Data has been derived from the audited
consolidated financial statements as of that date.
|
| |
About Innovus Pharmaceuticals, Inc.
Headquartered in San Diego, Innovus Pharma is an emerging over-the-counter (“OTC”) consumer goods and specialty pharmaceutical
company engaged in the commercialization, licensing and development of safe and effective non-prescription medicine and consumer
care products to improve men’s and women’s health and vitality and respiratory diseases. Innovus Pharma delivers innovative and
uniquely presented and packaged health solutions through its (a) OTC medicines and consumer and health products, which we market
directly, (b) commercial partners to primary care physicians, urologists, gynecologists and therapists, and (c) directly to
consumers through our on-line channels, retailers and wholesalers. The Company is dedicated to being a leader in developing and
marketing new OTC and branded Abbreviated New Drug Application (“ANDA”) products. The Company is actively pursuing opportunities
where existing prescription drugs have recently, or are expected to, change from prescription (or Rx) to OTC.
For more information, go to www.innovuspharma.com; www.zestra.com; www.ejectdelay.com; www.myvesele.com; www.sensumplus.com; www.myandroferti.com; www.fluticare.com; www.beyondhumantestosterone.com; www.getbeyondhuman.com; www.trybeyondhuman.com; www.recalmax.com; www.prostagorx.com; www.allervarx.com; and www.apeaz.com.
Innovus Pharma’s Forward-Looking Safe Harbor
Statements under the Private Securities Litigation Reform Act, as amended: with the exception of the historical information
contained in this release, the matters described herein contain forward-looking statements that involve risks and uncertainties
that may individually or mutually impact the matters herein described for a variety of reasons that are outside the control of the
Company, including, but not limited to, its financial results, projected revenues, projected online subscribers and other
customers, estimated markets for its products, and statements about achieving its other corporate and business development, growth,
commercialization, financial and staffing objectives. Readers are cautioned not to place undue reliance on these forward-looking
statements as actual results could differ materially from the forward-looking statements contained herein. Readers are urged to
read the risk factors set forth in the Company's most recent filing on Form S-1, annual report on Form 10-K, subsequent quarterly
reports filed on Form 10-Q and other filings made with the SEC. Copies of these reports are available from the SEC's website or
without charge from the Company.
Emerging Markets Consulting, LLC
James S. Painter, III
321-206-6681
jamespainter@emergingmarketsllc.com
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