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Record Third Quarter Revenues – 67% Increase Over Same Period Last Year
VANCOUVER, British Columbia, Nov. 30, 2020 (GLOBE NEWSWIRE) -- Aequus Pharmaceuticals Inc. (TSX-V: AQS, OTCQB: AQSZF) (“Aequus” or the “Company”), a specialty pharmaceutical company with a focus on developing, advancing and promoting differentiated products, today reported financial results for the three months ended September 30, 2020 (“Q3 2020”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
“We are very encouraged by our performance in the third quarter” said Doug Janzen, Charmain and CEO of Aequus. “We saw strong revenue growth from both PrVistitan™ and Tacrolimus and our losses were sharply reduced by 62% over the same period last year. We have received Health Canada approval for 2 Evolve-branded Dry Eye products. These two products were both approved as medical devices and make up approximately 75% of our roughly $9M peak revenue forecast for the Evolve line. Late on Friday, Health Canada informed us that the 3rd Evolve product would not be approved as a medical device, and should be resubmitted as an OTC (Over-the-Counter) product. We will meet with our regulatory consultants and partners at Medicom and determine if pursuing an OTC approval for this single product makes commercial sense, given that additional Dry Eye products are already under consideration. We are confident that continued growth from our existing products and the Evolve launches will positively contribute to our bottom-line going forward into 2021.”
Revenues in the third quarter in 2020 were $618,984 (2019 - $370,799), a 67% increase over the same quarter in 2019 (“Q3 2019”). The increase can be primarily attributed to an increase in market access and general increases in sales as PrVistitan™ and Tacrolimus continue to increase market share. Notable business highlights since July 1, 2020 are as follows:
On October 16, 2020, the Company agreed to a contract extension under modified terms for its promotional service agreement with Sandoz Canada Inc. for Tacrolimus IR to December 31st, 2021. Aequus began promotional efforts in December 2015 for Sandoz’s generic tacrolimus, and has since achieved over 10x growth of the product in Canada through increased brand awareness, new patient adoption programs, and leveraging conversion experience and relationships across provinces.
Aequus and Sandoz continue to have discussions regarding expanding the relationship beyond the first two products.
The Company has progressed discussions with potential buying groups active in eye care and we expect our Aequus Eye Care E-Commerce platform will go live before year end.
On August 6, 2020 the Company closed a public offering and issued 31,250,000 Units at a price of $0.08 per Unit for aggregate gross proceeds of $2,500,000. Each Unit is comprised of one common share in the capital of the Company and one-half of one common share purchase warrant of the Company (each whole common share purchase warrant, a "Warrant"). Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price of C$0.12 per Common Share until expiry on August 6, 2023.
The Company looks to continue leveraging its existing core capabilities and commercial infrastructure to expand its presence and product offerings within ophthalmology and optometry. Aequus has positioned itself as a key partner for international companies looking to access the Canadian marketplace. The Company will continue its strategy of adding to its existing product portfolio through promotional partnership agreements, asset acquisitions, and in-licenses.
Operating expenses for the three months ended September 30, 2020
The Company reported a net loss of $251,921 in Q3 2020, a decrease of 62% from the net loss of $660,532 in Q3 2019. The loss for the nine months ended September 30, 2020 (“YTD 2020”) was $879,984, a decrease of 57% from the net loss of $2,068,750 for the nine months ended September 30, 2019. Highlights from the quarter are as follows:
Sales and marketing costs in Q3 2020 were $292,343 when compared to $417,950 in Q3 2019, a decrease of 30% or $125,607. The majority of the decrease in Q3 2020 was related to the reduction in the salesforce and travel expense resulting from COVID response. Non-cash expenses for depreciation and amortization and share-based payments in Q3 2020 were $1,812 and $47,938 respectively, compared to $47,327 and $13,474 in Q3 2019.
Research and development project maintenance expenses in Q3 2020 were $12,997 when compared to $57,280 in Q3 2019, a decrease of $44,283. The majority the decrease was attributable to the decrease in management costs and patent and intellectual property protection costs and is a result of our focus on revenue generating ophthalmology products as opposed to development programs.
General administration expenses in Q3 2020 were $582,525 when compared to $560,291 in Q3 2019, an increase of $22,234. The Company showed significant cost reductions in travel as well as legal and professional expenses in Q3 2020 totaling $79,162, which were offset by the expenses related to the convertible debenture.
ABOUT AEQUUS PHARMACEUTICALS INC.
Aequus Pharmaceuticals Inc. (TSX-V: AQS, OTCQB: AQSZF) is a growing specialty pharmaceutical company focused on developing and commercializing high quality, differentiated products. Aequus has grown its sales and marketing efforts to include several commercial products in ophthalmology and transplant. Aequus plans to build on its Canadian commercial platform through the launch of additional products that are either created internally or brought in through an acquisition or license; remaining focused on highly specialized therapeutic areas. For further information, please visit www.aequuspharma.ca.
FORWARD-LOOKING STATEMENT DISCLAIMER
This release may contain forward-looking statements or forward-looking information under applicable Canadian securities legislation that may not be based on historical fact, including, without limitation, statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “potential”, “strong” and similar expressions. Forward- looking statements are necessarily based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as the factors we believe are appropriate. Forward-looking statements include but are not limited to statements relating to: the implementation of our business model and strategic plans; revenue growth trends into the future; expected timing for product launch; the Company’s expected revenues; the regulatory approval of the Evolve line of products expected to start in 2020 or early 2021. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Aequus, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward looking statements included in this release, the Company has made various material assumptions, including, but not limited to: obtaining positive results of clinical trials; obtaining regulatory approvals; general business and economic conditions; the Company’s ability to successfully out license or sell its current products and in-license and develop new products; the assumption that the Company’s current good relationships with its manufacturer and other third parties will be maintained; the availability of financing on reasonable terms; the Company’s ability to attract and retain skilled staff; market competition; the products and technology offered by the Company’s competitors; and the Company’s ability to protect patents and proprietary rights. In evaluating forward looking statements, current and prospective shareholders should specifically consider various factors set out herein and under the heading “Risk Factors” in the Company’s Annual Information Form dated April 28, 2020, a copy of which is available on Aequus’ profile on the SEDAR website at www.sedar.com, and as otherwise disclosed from time to time on Aequus’ SEDAR profile. Should one or more of these risks or uncertainties, or a risk that is not currently known to us materialize, or should assumptions underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward looking statements.
VistitanTM: Trademark owned or used under license by Sandoz Canada Inc.
Aequus Investor Relations