Nuvo Pharmaceuticals Posts 2016 Results

Nuvo Pharmaceuticals (TSX:NRI) announced its financial and operational results for 2016 and its fourth quarter.
As quoted in the press release:

Fourth Quarter and Business Update ⁽¹⁾
Pennsaid^® 2%

• According to IMS Health, for the year ended December 31, 2016, U.S. prescriptions of Pennsaid 2% were 457,000 compared to 320,000 for the year ended December 31, 2015.  U.S. prescriptions of Pennsaid 2% were 119,000 in the fourth quarter of 2016 compared to 103,000 prescriptions in the third quarter of 2016.
• In November 2016, the Company commenced a new placebo-controlled, multi-centre Phase 3 trial (2016 Pennsaid 2% Trial) in Germany to study Pennsaid 2% for the treatment of acute ankle sprains.  The 2016 Pennsaid 2% Trial is designed to support regulatory applications for marketing approval of Pennsaid 2% for the treatment of acute pain in the E.U., Canada and Australia.  As of February 27, 2017, 85% of the target number of patients had been enrolled in the study.  Top-line results of the trial are expected to be available in Q2 2017.
• In February 2017, the Company received notification from NovaMedica LLC (NovaMedica), its Russian licensee for Pennsaid 2%, that the marketing authorization for Pennsaid 2% had been granted by the Russian Ministry of Health.  The marketing authorization is inclusive of the non-prescription, human use of Pennsaid 2% in treating back pain, joint pain, muscle pain, and inflammation and swelling in soft tissue and joints associated with trauma and rheumatic conditions.  The Company and NovaMedica are in discussions respecting NovaMedica’s commercial strategy and launch plans.
• In February 2017, Horizon advised the Company that it plans to draw down some of its existing inventory of commercial bottles of Pennsaid 2% and shift commercial bottle production from Q2 to later in 2017.  Horizon has asked that the Company pull forward into Q2 some product sample orders planned for later in the year. These inventory adjustments are in response to the U.S. Federal Drug Supply Chain Act taking effect November 27, 2017 that requires all pharmaceutical drugs manufactured for the U.S. market to have individually serialized tracking and will have a negative impact on the Company’s Q2 sales and earnings. The Company expects that sales to Horizon will increase in the second half of the year once Nuvo’s serialization equipment comes online and Horizon resumes its more typical ordering patterns.  For additional information see Horizon Ordering Patterns below.

Management Appointment

• In November 2016, the board of directors of the Company appointed Jesse Ledger to the position of President.  Mr. Ledger had previously held the position of Vice President, Business Development.  John London, who had been Nuvo’s President and Chief Executive Officer, continues to lead the Company as its CEO.

2016 and Q4 Financial Summary⁽¹⁾

• Total revenue for the year ended December 31, 2016 was $27.0 million compared to $20.5 million for the year ended December 31, 2015.  Total revenue was $5.6 million for the three months ended December 31, 2016 compared to $7.7 million for the three months ended December 31, 2015.
• Adjusted EBITDA⁽²⁾ increased to $8.9 million for the year ended December 31, 2016 compared to $8.0 million in the comparative year.  Adjusted EBITDA decreased to $1.3 million for the three months ended December 31, 2016 compared to $4.0 million for the three months ended December 31, 2015.
• Net income from continuing operations was $7.4 million for the year ended December 31, 2016 compared to $8.3 million in the comparative year.  Net income from continuing operations was $1.7 million for the three months ended December 31, 2016 compared to $4.7 million for the three months ended December 31, 2015.
• Cash and short-term investments were $17.6 million at December 31, 2016 compared to $17.4 million at September 30, 2016.

(1)	The financial information presented herein reflects results from continuing operations with Nuvo’s previously disclosed segment, Crescita, presented as a discontinued operation.
(2)	Adjusted EBITDA is a non-IFRS financial measure defined by the Company below.

 
“2016 was a very positive and pivotal year for Nuvo,” said John London, Nuvo’s CEO.  “Effective March 1, 2016, we spun out our R&D assets and related expenses to Crescita Therapeutics (TSX:CTX) making Nuvo a pure-play profitable specialty pharmaceutical company with approved products, growing revenue, and a strong balance sheet with over $17M of cash and no debt.  We are thrilled that Horizon increased year-over-year U.S. prescriptions of Pennsaid 2% by 43% in 2016.  Our plan for 2017 is to expand our revenue streams through Pennsaid 2% international out-licensing transactions, and product acquisitions; thereby, making Nuvo a stronger and more diversified company.”

Click here to read the full press release.