VANCOUVER, British Columbia, May 31, 2021 (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 quarter ended March 31, 2021 (“First Quarter 2021”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
“We had a productive start to 2021,” said Doug Janzen, Chairman and CEO. “Despite the many COVID-19 related restrictions that impacted all of Canada, our sales force continued to find creative ways to manage the business. We were excited to launch our new E-commerce platform www.aequuseyecare.ca. This new tool strengthens our established sales infrastructure and will allow us to more readily take on new products and scale up commercial operations, as needed when sales opportunities are expected to change after current COVID restrictions are lifted.”
“Sales were down slightly in Q1 compared to the same period last year and lower than our record quarter in fourth quarter 2020, which from a timing perspective, appeared to cannibalize some January sales. We were pleased to see sales meet internal forecasts since February and we expect to continue our revenue growth trajectory going forward.”
Commercial Update
The Company continues to generate revenue from its commercial platform which was launched in 2016. Since then, Aequus has grown its commercial business and expects to continue growing sales revenues and its portfolio of commercial stage products. Regulatory and development work related to Zimed-PF is progressing well and there were a number of notable activities so for in this year.
- On March 01, 2021 the Company announced the commercial availability of Evolve™ preservative free lubricating eye drops for dry eye care. Availability of the product is only for Eye Care Professionals, paving the way for additional products and devices in this specialty healthcare channel. Launch activities and advertising has been impacted due to several provinces having reduced healthcare services and limited direct rep access to optometry and ophthalmology offices. Although materials and expenses have been realized in Q1, expect Q2/Q3 to campaigns and expenses to create sales growth and penetration into new specialty areas.
- With the launch of Evolve, Aequus has added an E-commerce platform to order and direct ship to professionals Nationally. We expect to expand direct to ship to patients, on behalf of professionals, or with authorization of professionals in the coming months. This will streamline supply and value to both consumer and trade channels.
- COVID has provided Aequus the opportunity to develop our CRM capabilities and database details for future marketing and deployment efficiencies. We can now segment, target, measure and analysis resource allocations in almost real time and apply these learnings to business. This agility will allow us to commercialize in multiple therapeutic areas, with targeted B2B precision.
- All sales and marketing personnel have been retrained in online/digital analysis, remote hybrid selling, video presenting and social selling best practices. We have the capability of personalizing advertising and product messaging by segment, specific to professional customers and can apply or expand this into other therapeutic areas.
- Regarding Zimed, initial inspections have begun by Health Canada for the review of SOP’s, logistics and warehousing all received with positive comments. The full submission for approval of Zimed is on track for late June; Launch is on track.
- We are currently in negotiation with Sandoz Canada Inc., our partner with both Tacrolimus and Vistitan branded products. We expect to extend terms on Vistitan through the end of 2021, with intent to extend longer term contracts on both brands before year end. Both brands continue to grow, gain share and deliver profitably for both companies.
- A recent study published in the British Journal of Ophthalmology by prominent Canadian Ophthalmologists and Professor at the University of Montreal, Dr. Paul Harasymowycz, reviewed an analysed available research for the purpose of comparing glaucoma medications for efficacy related to lowing intraocular pressure (IOP). Bimatoprost 0.03%, Vistitan, was considered to be the most efficacious for its ability to lower IOP. These results support Vistitan’s competitive advantage and value to patients, provincial health organizations and insurance payers Nationally.
Financial Update
The Company reported an operating loss before other income of $623,636 for First Quarter 2021, a 53% change from the loss before other income of $408,706 in the three months ended March 31, 2020 (“First Quarter 2020”). The higher loss in First Quarter 2021 was primarily due to lower revenue and an increase in product development and regulatory costs related to Zimed-PF as it progresses through the Health Canada review process as well as higher non-cash expenses triggered by the conversion of convertible debt to equity.
The First Quarter 2021 had revenues of $491,821, which is a 15% decrease over the $579,450 revenue during the First Quarter 2020. The fluctuations in revenue were primarily driven by timing differences resulting from consumer buying patterns and not believed to be attributable to any specific cause or variable controllable by the Company. COVID restrictions continue to be an access barrier in Ontario and Quebec, but the impact of the COVID restrictions is not measurable.
Sales and marketing costs in First Quarter 2021 were $477,830 when compared to $451,146 in First Quarter 2020, an increase of 6% or $26,684. The majority of the increase related to the launch of the Evolve products and related salesforce and marketing expenses.
Research and development costs in First Quarter 2021 were $87,898 when compared to $14,317 in First Quarter 2020, an increase of 514% or $73,518. The increase related to market access consultants and Health Canada approvals required for the launch of the Evolve products.
General and administration costs in First Quarter 2021 were $547,116 when compared to $522,693 in First Quarter 2020, an increase of 5% or $24,423. The majority of the increase related to a $42,015 increase in new consulting work required to support strategic business development; a $44,541 non-cash increases in share-based payments expenses; and, a $36,934 increase in management fees. These higher costs were offset by decreases in legal, travel costs and accretion expenses.
General Corporate Update
During the First Quarter 2021 there were two notable corporate activities:
- In February 2021, the Company closed a private placement of 6,666,666 units at a price of $0.15 per unit, for proceeds of $1,000,000 to Marc Lustig, a director of the Company. Each unit shall consist of one common share and one-half warrant. Each warrant shall entitle the holder to purchase one common share at an exercise price of $0.25 for 24 months.
- In March 2021, the Company elected to exercise its right to trigger an accelerated expiry under the terms of a warrant indenture. Between March 2 and April 1, 2021, the Company issued 12,343,750 shares at $0.12 per share, pursuant to the exercise of warrants for net proceeds of $1,481,250. The Company also issued 317,000 shares at $0.22 per share pursuant to the exercise of warrants for net proceeds of $69,740.
Planned Shelf Prospectus Filing to Replace Soon to Expire Existing Shelf Prospectus
The Company’s financing strategy includes maintaining an active Shelf Prospectus to give the Company the ability and flexibility to efficiently raise money by way of a public offering when market conditions are favourable or to provide resale registration rights for investors. The current Shelf Prospectus expires on October 16, 2021. The Company is planning to update the Shelf Prospectus over the next few months and expects to file the preliminary short form base shelf prospectus prior to expiry of the current Shelf Prospectus.
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” 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 launches; the Company’s expected revenues; the regulatory approval of its products; the Company’s ability to attract international partners; and ongoing discussions with and the Company’s ability to secure potential partners to further grow our product portfolio. 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 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 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; the impact of the coronavirus (COVID-19) on the Company’s operations; 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 30, 2021, 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.
Vistitan™: Trademark owned or used under license by Sandoz Canada Inc.
CONTACT INFORMATION
Aequus Investor Relations
Email: investors@aequuspharma.ca
Phone: 604-336-7906