Innovus Pharmaceuticals Reports Nine Month Net Revenue of $6.4 million and Net Loss Decrease of 51.6%
Compared to the Same Period in 2016
Quarterly and Year-to-Date Net Revenue Increase 18.0% and 105.8% When Compared to 2016
FlutiCare™ Launches on November 14, 2017
Innovus Pharmaceuticals, Inc. (“Innovus Pharma” or the “Company”) (OTCQB: INNV) today announced third quarter 2017 net revenue
of $2.2 million compared to $1.9 million in net revenue for the same period in 2016. Net revenue for the nine months ended
September 30, 2017 was $6.4 million compared to $3.1 million for the same period in 2016.
“We have increased our year-to-date product sales by over 105% when compared to the prior year without the potential added sales
of FlutiCare™. This demonstrates our continued ability to generate significant sales growth from new and existing products through
our Beyond Human® Sales and Marketing Platform,” stated Bassam Damaj, President and Chief Executive Officer of Innovus Pharma. “Our
first commercial batch of FlutiCare™ was received in October and we launched FlutiCare™ today which is one of the largest
milestones for the Company. With the launch, we expect to continue the trend of increasing our net revenue while decreasing our
loss from operations as we work towards our goal of profitability in 2018,” continued Dr. Damaj.
Financial highlights for the three months ended September 30, 2017 included:
- Net revenue totaled $2.2 million for the three months ended September 30, 2017, compared to net
revenue of $1.9 million for the three months ended September 30, 2016.
- Net revenue during the third quarter of 2017 was impacted by the natural disasters in Florida and
Texas as the Company was unable to advertise its products for a period of time in those regions as a result. These two states
generate close to 15% of our total net revenue and have a population of approximately 17 million in our targeted product
demographics*.
- Total operating expense was $3.4 million for the three months ended September 30, 2017 or year over
year decrease of $0.7 million or 16.7% when compared to the three months ended September 30, 2016.
- Loss from operations decreased by $1.0 million or 45.8% to $1.2 million for the three months ended
September 30, 2017 compared to the three months ended September 30, 2016.
- Net loss totaled $1.3 million, or ($0.01) per common share, for the three months ended September 30,
2017 representing a 70.0% decrease year over year. The net loss included $0.5 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
September 30, 2016 totaled $4.4 million or ($0.04) per common share.
- Cash used in operations decreased to approximately $577,000 for the three months ended September 30,
2017 compared to approximately $996,000 for the three months ended September 30, 2016.
- Cash balance totaled $1.3 million at September 30, 2017.
Financial highlights for the nine months ended September 30, 2017 included:
- Net revenue increased 105.8% to $6.4 million for the nine months ended September 30, 2017, compared
to net revenue of $3.1 million for the nine months ended September 30, 2016.
- Gross margin increased to 79.4% for the nine months ended September 30, 2017, higher than gross
margin for the nine months ended September 30, 2016 which totaled 77.2%.
- Total operating expense increased to $10.4 million and included $1.0 million in non-cash share-based
compensation and $0.5 million in non-cash depreciation and amortization for the nine months ended September 30, 2017.
- Net loss totaled $5.0 million, or ($0.03) per common share, for the nine months ended September 30,
2017. The net loss included a non-cash expense of $0.4 million for the loss on extinguishment of debt as a result of the
prepayment of the remaining 2016 convertible debentures and settlement of notes payable. The net loss also included interest
expense of $0.8 million, of which $0.7 million was non-cash and related to the amortization of debt discounts. Net loss for the
nine months ended September 30, 2016 totaled $10.3 million or ($0.12) per common share.
Third quarter 2017 and recent developments:
- Received our first commercial batch of 220,000 units of FlutiCare™ in October and launched FlutiCare™
in the U.S. in November 2017;
- Moved corporate and company operations into a new 17,000 square-foot facility in San Diego, CA in
November 2017 that will bring in-house the Company’s product fulfillment and inventory storage process. The move is designed to
lower product fulfillment costs which will increase our gross product margins and decrease our loss from operations, as well as,
provide the necessary office space to accommodate our expected revenue growth in 2018;
- 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;
- Entered into an agreement with ACON Laboratories, Inc. to offer our customers a new FDA
cleared urinary tract infection test in combination with their purchase of UriVarx™ and an FDA cleared glucose monitoring meter
and test strips called the GlucoGorx™ Kit with their purchase of GlucoGorx™, the Company’s upcoming supplement for diabetic
patients;
- Received approval as a Natural Health Product by Health Canada for UriVarx™ for the indication to
reduce symptoms of overactive bladder in September 2017 and for Vesele® to help improve nitric oxide production in symptoms of
sexual dysfunction in October 2017;
- Continued expansion of patent portfolio by receiving first Notification to Grant a Patent Right for
Sensum+® in China in October 2017. Innovus Pharma has currently fourteen (14) issued patents and eight (8) patent applications
covering several of its products and has licensed in an additional four (4) patents and five (5) patent applications from third
parties covering additional products;
- Expanded the exclusive license and distribution territory under our agreement with Densmore to
Singapore and Vietnam in July 2017; and
- Approval notification as a Class I medical device was received to commercialize Zestra® in Australia
in July 2017 and in New Zealand in September 2017.
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: 5606897. 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: 10113950. The replay will
be available shortly after the end of the conference call.
|
|
|
|
|
Consolidated Statements of Operations
|
|
|
|
|
|
|
(Unaudited)
For the
|
|
Three Months Ended
|
|
September 30,
|
|
|
|
2017
|
|
|
|
|
2016
|
|
| Net revenue: |
|
|
|
|
|
|
|
|
|
| Product sales, net |
|
|
$ |
2,218,343 |
|
|
|
|
$ |
1,882,129 |
|
| License revenue |
|
|
|
2,500 |
|
|
|
|
|
- |
|
| Net revenue |
|
|
|
2,220,843 |
|
|
|
|
|
1,882,129 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expense: |
|
|
|
|
|
|
|
|
|
| Cost of product sales |
|
|
|
480,076 |
|
|
|
|
|
331,227 |
|
| Research and development |
|
|
|
8,736 |
|
|
|
|
|
43,775 |
|
| Sales and marketing |
|
|
|
1,626,630 |
|
|
|
|
|
1,972,155 |
|
| General and administrative |
|
|
|
1,321,001 |
|
|
|
|
|
1,779,048 |
|
| Total operating expense |
|
|
|
3,436,443 |
|
|
|
|
|
4,126,205 |
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
|
(1,215,600 |
) |
|
|
|
|
(2,244,076 |
) |
|
|
|
|
|
|
|
|
|
|
| Other income and (expense): |
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
|
(104,276 |
) |
|
|
|
|
(3,719,200 |
) |
| Loss on extinguishment of debt |
|
|
|
(89,341 |
) |
|
|
|
|
- |
|
| Other income (expense), net |
|
|
|
(4,800 |
) |
|
|
|
|
(37 |
) |
| Fair value adjustment for contingent consideration |
|
|
|
69,305 |
|
|
|
|
|
186,813 |
|
| Change in fair value of derivative liabilities |
|
|
|
16,055 |
|
|
|
|
|
1,350,688 |
|
| Total other expense, net |
|
|
|
(113,057 |
) |
|
|
|
|
(2,181,736 |
) |
|
|
|
|
|
|
|
|
|
|
| Loss before provision for income taxes |
|
|
|
(1,328,657 |
) |
|
|
|
|
(4,425,812 |
) |
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
$ |
(1,328,657 |
) |
|
|
|
$ |
(4,425,812 |
) |
|
|
|
|
|
|
|
|
|
|
| Net loss per share of common stock – basic and diluted |
|
|
$ |
(0.01 |
) |
|
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares of common stock outstanding – basic and
diluted |
|
|
|
161,587,934 |
|
|
|
|
|
104,972,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
For the
|
|
Nine Months Ended |
|
September 30, |
|
|
|
2017 |
|
|
|
|
2016 |
|
| Net revenue: |
|
|
|
|
|
|
|
|
|
| Product sales, net |
|
|
$ |
6,426,790 |
|
|
|
|
$ |
3,126,112 |
|
| License revenue |
|
|
|
10,000 |
|
|
|
|
|
1,000 |
|
| Net revenue |
|
|
|
6,436,790 |
|
|
|
|
|
3,127,112 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expense: |
|
|
|
|
|
|
|
|
|
| Cost of product sales |
|
|
|
1,329,131 |
|
|
|
|
|
714,284 |
|
| Research and development |
|
|
|
26,982 |
|
|
|
|
|
47,667 |
|
| Sales and marketing |
|
|
|
4,869,717 |
|
|
|
|
|
2,257,166 |
|
| General and administrative |
|
|
|
4,207,899 |
|
|
|
|
|
4,012,357 |
|
| Total operating expense |
|
|
|
10,433,729 |
|
|
|
|
|
7,031,474 |
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
|
(3,996,939 |
) |
|
|
|
|
(3,904,362 |
) |
|
|
|
|
|
|
|
|
|
|
| Other income and (expense): |
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
|
(771,885 |
) |
|
|
|
|
(5,970,450 |
) |
| Loss on extinguishment of debt |
|
|
|
(394,169 |
) |
|
|
|
|
- |
|
| Other income (expense), net |
|
|
|
(5,622 |
) |
|
|
|
|
1,839 |
|
| Fair value adjustment for contingent consideration |
|
|
|
195,459 |
|
|
|
|
|
164,479 |
|
| Change in fair value of derivative liabilities |
|
|
|
(32,138 |
) |
|
|
|
|
(632,627 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
| Total other expense, net |
|
|
|
(1,008,355 |
) |
|
|
|
|
(6,436,759 |
) |
|
|
|
|
|
|
|
|
|
|
| Loss before provision for income taxes |
|
|
|
(5,005,294 |
) |
|
|
|
|
(10,341,121 |
) |
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
|
|
3,200 |
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
$ |
(5,008,494 |
) |
|
|
|
$ |
(10,341,121 |
) |
|
|
|
|
|
|
|
|
|
|
| Net loss per share of common stock – basic and diluted |
|
|
$ |
(0.03 |
) |
|
|
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares of common stock outstanding – basic and
diluted |
|
|
|
152,325,196 |
|
|
|
|
|
86,498,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
2017 |
|
|
2016 |
|
|
|
(Unaudited) |
|
|
(1) |
| Assets |
|
|
|
|
|
|
|
|
| Cash |
|
|
$ |
1,315,059 |
|
|
$ |
829,933 |
| Accounts receivable, net |
|
|
|
27,526 |
|
|
|
33,575 |
| Prepaid expense and other current assets |
|
|
|
265,217 |
|
|
|
863,664 |
| Inventories |
|
|
|
640,055 |
|
|
|
599,856 |
| Intangible assets & other non-current assets |
|
|
|
5,429,548 |
|
|
|
5,900,350 |
| Total assets |
|
|
$ |
7,677,405 |
|
|
$ |
8,227,378 |
|
|
|
|
|
|
| Liabilities & Stockholders' Equity |
|
|
|
|
|
| Accounts payable and accrued expense |
|
|
$ |
1,356,057 |
|
|
$ |
1,210,050 |
| Total accrued compensation |
|
|
|
2,733,091 |
|
|
|
2,299,593 |
| Deferred revenue and customer deposits |
|
|
|
- |
|
|
|
11,000 |
| Accrued interest payable |
|
|
|
21,353 |
|
|
|
47,782 |
| Total notes payable and non-convertible debenture, net of discount |
|
|
|
780,056 |
|
|
|
681,127 |
| Total derivative liabilities |
|
|
|
74,151 |
|
|
|
483,744 |
| Total contingent consideration |
|
|
|
1,490,458 |
|
|
|
1,685,917 |
| Convertible debentures, net of discount |
|
|
|
- |
|
|
|
714,192 |
| Total stockholders' equity |
|
|
|
1,222,239 |
|
|
|
1,093,973 |
| Total liabilities and stockholders’ equity |
|
|
$ |
7,677,405 |
|
|
$ |
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 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 be a leader in developing and marketing new OTC and
branded Abbreviated New Drug Application (“ANDA”) products, men’s and women’s health supplements, related diagnostics and medical
devices. The Company is actively pursuing opportunities where existing prescription drugs have recently, or are expected to, change
from prescription (or Rx) to OTC, as well as related products.
For more information, go to www.innovuspharma.com; www.zestra.com; www.ejectdelay.com; www.myvesele.com; www.urivarx.com ; www.sensumplus.com; www.myandroferti.com; www.beyondhumantestosterone.com; www.getbeyondhuman.com; www.trybeyondhuman.com; www.recalmax.com; www.prostagorx.com; www.fluticare.com; www.allervarx.com; and www.apeaz.com .
* Population data for Florida and Texas gathered from the 2010 Census Brief from the United States Census Bureau.
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, (407) 340-0226
jamespainter@emergingmarketsllc.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20171114005469/en/