Aequus Provides First Quarter 2018 Financial and Corporate Highlights
VANCOUVER, British Columbia, May 31, 2018 (GLOBE NEWSWIRE) -- Aequus Pharmaceuticals Inc. (AQS.V) (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 first quarter ended March 31, 2018 and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
Q1 2018 Key Highlights - 4th Consecutive Quarter of Revenue Growth
- Revenues remain strong with first quarter 2018 total revenue of $375,000, an increase of 28% over the same quarter in 2017;
- Fourth consecutive quarter of revenue growth and second consecutive quarter achieving profitability in commercial division;
- Added to commercial portfolio through commercial agreement with Mynosys for promotion of Zepto® Capsulotomy System in Canada;
- First quarter 2018 net loss of $816,485, a decrease of 19% over the same quarter in 2017;
- Received positive feedback from FDA on suitability of its long-acting anti-nausea patch, AQS1303, to follow an abbreviated regulatory pathway for approval in the US;
- Continued to build medical cannabis partnership framework through collaborations with CannaRoyalty and Ehave.
The Company recorded revenue of $375,000 in Q1 2018 compared to $293,002 in Q1 2017, which represents growth of 28% when comparing the year over year change. While sales for both products continue to increase with some market volatility, we had expected a modest growth in revenues in the current quarter as the tiered portion of revenues payable to Aequus by our partner declined by 10% for Vistitan as of 2018. Despite this, we were able to demonstrate growth in revenues to Aequus in the current quarter. The terms of the agreement for both tacrolimus and Vistitan extend to 2020.
Sales from the recently announced Zepto Capsulotomy System are expected to contribute to revenues, and will be accretive to the commercial portfolio, as of Q2 2018 with an expected launch date in Canada of June 1, 2018. Zepto is a novel medical device used during cataract surgery to produce a consistent, high quality, round capsulotomy in milliseconds. Zepto has been used in thousands of cataract surgeries in the Asia, Europe, and Central America, and most recently in the US since its launch in the respective territories in February 2017 and August 2017. In Canada, there is an estimated 300,000 cataract procedures annually. Zepto will be marketed by Aequus’ current ophthalmology salesforce and is an attractive complement to its existing product offering.
“For the second consecutive quarter, the commercial division has been profitable and is now contributing in a more meaningful way to the overall business,” said Ian Ball, Chief Commercial Officer at Aequus. “We continue to seek additional value add products that will further strengthen our revenues while reinforcing our commitment to customers in ophthalmology. We are in active discussions for additional revenue products that would complement this strategy.”
Development Program Activities
Aequus’ development efforts in Q1 2018 focused on a pre-Investigational Drug Application (“pre-IND”) meeting with the US Food and Drug Administration (“FDA”) for the Company’s lead development program, AQS1303, a long-acting transdermal anti-nausea program. Upon review of the Company’s pre-IND submission, the FDA agreed that AQS1303 is a suitable candidate for the 505(b)2 abbreviated regulatory pathway for approval in the United States.
Additionally, Aequus continued to build on its partnerships within the medical cannabis field, making significant steps forward for its cannabinoid-based therapeutic program targeting neurological disorders. Aequus announced a collaboration with CannaRoyalty Corp. (“CannaRoyalty”) to advance a suite of cannabis-based therapies targeting neurological disorders into clinical trials in Canada, in collaboration with Canadian doctors and key opinion leaders, and entered into a collaboration with Ehave to access Ehave’s bioinformatics platform, providing cost effective and clinically relevant data collection in Aequus’ anticipated clinical trials in the medical cannabis regulatory regime.
Sales and marketing costs for Q1 2018 was $338,447, which is consistent with prior quarters and includes non-cash expenses of $56,628 related to amortization and share based payments expenses. Depreciation and amortization, and share-based payments for Q1 2018 were $45,917 and $10,711, respectively, compared to $45,917 and $25,097, respectively, in Q1 2017. The amortization costs were primarily related to the acquisition costs of TeOra. As the sales and marketing infrastructure is now established, new products, like Zepto, can be marketed to the same customer base with relatively little change to sales related costs.
The Company incurred research and development expenses of $192,968 in Q1 2018 as compared to $398,273 in Q1 2017. The decrease was primarily attributable to subcontractor costs, specifically reduced regulatory consulting for AQS1301 and AQS1303 Pre-IND related work and no clinical work projected during Q1 2018 whereas Q1 2017 included work related to the completion of the initial single dose exposure Proof of Concept study for AQS1301, preclinical studies for AQS1302 and AQS1303, and the initiation of clinical trial material development for AQS1303.
General administration expenses were $659,370 during Q1 2018 as compared to $559,639 in Q1 2017, an increase of $99,731 or 18%. The increase of $175,093 was primarily due to an increase in one-time consulting expenses relating to corporate marketing and branding during Q1 2018.
Additionally, the Company issued Camargo Pharmaceutical Services, LLC 31,683 common shares on May 30, 2018 in connection with a service agreement to provide regulatory consulting services for the Company’s product development programs in the United States.