Aequus Reports 5th Consecutive Quarter of Revenue Growth
VANCOUVER, British Columbia, Aug. 27, 2018 (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 June 30, 2018 (“Q2 2018”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
Q2 2018 Key Highlights
Continued quarter over quarter revenue growth with $377,855 in reported revenues for Q2 2018, an increase of 103% compared to the same quarter in 2017;
Decrease in net losses of 48% compared to same quarter last year primarily due to increased revenues and a decrease in R&D expenditures in Q2 2018;
Launched third commercial product in Canada, Zepto® Capsulotomy System (“Zepto”), and successfully completed first cataract cases in Canada using Zepto with international renown surgeon, Dr. Ike Ahmed;
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;
Expanded relationship with Corium International, Inc. (“Corium”) to advance AQS1303 for the treatment of nausea and vomiting of pregnancy using Corium’s Coreplex™ technology, in preparation for clinical studies;
Improved commercial terms for continued promotion of Vistitan™ in Canada, and extended agreement to 2021;
Subsequent to the end of the quarter, the Company successfully closed two financings with total proceeds of $1,575,000.
The Company recorded revenues of $377,855 in Q2 2018, representing 103% growth as compared to the same period in 2017. On a year-to-date basis, the Company recorded $752,855 in revenues in the six-month period ending June 30, 2018, an increase of 57% compared to the same period in 2017. The increase in revenues were primarily attributable to increased promotional activities being focused in markets with positive market access and reimbursement listings.
In Q2 2018, Aequus added to its commercial pipeline as it entered into a commercial agreement with Mynosys Cellular Devices (“Mynosys”) to promote the Zepto® Capsulotomy System in Canada. Aequus has leveraged its existing commercial infrastructure to promote and support the launch Zepto. Following multiple successful trial cases with leading cataract surgeons such as Dr. Ike Ahmed, Aequus expects Zepto to contribute to revenues in the second half of 2018.
During the current quarter, Aequus also successfully improved commercial terms for the continued and extended promotion of Vistitan in Canada. Under the revised terms, Aequus will benefit from improved economics with a tiered split of net profits ranging from 42% and up to 47%, dependent on certain market access and sales milestones being met. The term of the agreement was also extended to 2021.
“We are extremely pleased with the progress and growth we are seeing in our commercial division, particularly in our ophthalmology franchise, as we are becoming recognized by our customers as a committed partner by introducing novel products to Canada such as Zepto,” said Doug Janzen, CEO and Chairman at Aequus. “We expect revenues to continue to grow as we work to add additional commercial products to our pipeline.”
Development Program Activities
Aequus received positive feedback from 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 for use in pregnancy. 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.
Following the regulatory guidance provided by the FDA, Aequus and Corium have expanded their pre-existing relationship to further advance AQS1303. Under the terms of the agreement, Corium will use its Corplex™ technology to optimize AQS1303 in preparation for clinical studies. Corium will fund the development work and in exchange will be the exclusive clinical and commercial manufacturer for the product.
Sales and marketing expenses for Q2 2018 were $363,018, which is consistent with prior quarters and includes non-cash expenses of $59,046 related to amortization and share based payments expenses. Depreciation and amortization, and share-based payments for Q2 2018 were $47,279 and $11,767, respectively, compared to $45,916 and $24,041, respectively, in Q2 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 $179,963 in Q2 2018 as compared to $581,670 in Q2 2017. The decrease was primarily attributable to lower subcontractor research costs and reduced regulatory consulting for AQS1301 and AQS1303 pre-IND related work, which completed in Q2 2017. The main development work in Q2 2018 was the advancement and optimization of AQS1303 in preparation for clinical studies. The costs of which are being realized by the Company’s development partner, Corium, in exchange for exclusive manufacturing of the product. This resulted in a $362,058 decrease, or 98% reduction in Q2 2018 cost relative to Q2 2017.
General administration expenses were $503,799 during Q2 2018 as compared to $623,315 in Q2 2017, a decrease of $119,516 or 19%. The decrease was primarily due to a decrease in consulting and legal expenses.
Subsequent to the end of the quarter, on July 31, 2018, the Company issued 4,000,000 units at a price of $0.20 per share for total proceeds of $800,000. Each unit consists of one common share and one-half share purchase warrant exercisable at a price of $0.30 for a period of 48 months under the prospectus supplement to the Company’s base shelf prospectus.
On August 10, 2018, the Company also issued 3,875,000 units at a price of $0.20 per share for total proceeds of $775,000. Each unit consists of one common share and one-half share purchase warrant exercisable at a price of $0.30 for a period of four years following the date of closing. The Company paid a fee to certain arm’s length finders in connection with the Units issued to investors introduced to the Company by the Finders, consisting of (i) a 7% cash payment on certain subscriptions in the aggregate amount of $33,250 and (ii) issued an aggregate of 166,250 Common Share purchase warrants.
FINANCIAL STATEMENTS AND MD&A
Investors are encouraged to review Aequus’ complete Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the three and six months ended June 30, 2018, which are available on the Company’s website at www.aequuspharma.ca and on SEDAR at www.sedar.com.