NEW YORK, NY / ACCESSWIRE / May 26, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on Innovus Pharmaceuticals, Inc. (INNV).
The report is available here: INNV May 2017 Update Note.
Innovus Pharmaceuticals, Inc. (OTCQB: INNV, "Innovus") is a fast-growing commercial stage pharmaceutical company that delivers safe, innovative and effective over-the-counter (OTC) medicine and consumer care products to improve men and women's health, respiratory disease and vitality. Innovus recently released robust top line results in 1Q17, with highlights as follows:
- Innovus revenues rose by 865% to $2.2mn in 1Q17 versus $0.2mn in 1Q16. Revenues also rose by 28.7% sequentially from 4Q16 levels of $1.7mn.
- Gross margins remained at attractive levels, at 79%, allowing the company to cash burn and target profitability.
- Strong Outlook: Innovus issued/reiterated its target for $10mn - $15mn in sales for 2017E, which would imply 100% to 200% growth over 2016 revenues of $4.8mn.
Revenues build as Innovus begins 2017 with momentum
On May 12, 2017, Innovus reported strong 1Q17 results, which showed strong growth in revenues on both a sequential and YoY basis. Revenues came in at $2.2mn, up 865% form 1Q16 and also up 28.7% sequentially from $1.7mn 4Q16. The results demonstrated continued sales execution and place the company well on its way towards its guidance for $10mn - $15mn for the full year as it expands sales channels for its portfolio of 18 commercial products.
Strong margins, reduced cash burn
INNV gross margins remained at attractive levels, at 79.8% in 1Q17, and the company reported GAAP EPS of ($0.02). Importantly the company reduced its cash burn, using $0.5mn in operating activities during 1Q17, and management stated on its call with investors that the company is now targeting adjusted profitability by the end of 2017. INNV ended the quarter with cash on hand of $2.4mn and total debt of $2.3mn, with its balance sheet benefiting from an equity offering in which INNV raised $3.8mn.
Looking toward Fluticare™ to provide next leg of growth
With Innovus building revenues from its existing commercial portfolio, we are now looking to the upcoming launch of FlutiCare™ as a key event to watch for 2018. Innovus management stated that it has selected a new partner for the launch of Innovus, and that it is on track for a commercial launch in 4Q17. The new supply agreement is with West-Ward Pharmaceuticals International, a subsidiary of multinational pharmaceutical corporation, Hikma Pharmaceuticals, PLC. Fluticare™ is a generic reformulation of Flonase® nasal spray for allergy symptoms. On its investor call following the quarter, Innovus stated that it is targeting $10-$15mn of additional revenues from Fluticare™ in its first year of commercialization. Combining this with modest growth in its existing portfolio could position the company for revenue in $25mn- $30mn revenue range, if it is able to execute to plan.
Updating price target to $0.65 on new share count
We are updating our price target for Innovus to $0.65, which, if achieved, represents upside potential of 490% from the recent price of $0.11. The main driver for this change is the increase in shares related to capital raising since our last note. In our view Innovus represents a compelling growth company in the healthcare space, with a management team that has demonstrated its ability to execute on sales growth, and a potentially game-changing new product line in with the launch of Fluticare™ in 4Q17.
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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.
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