Aequus Reports Second Quarter 2021 Financial Highlights
VANCOUVER, British Columbia, Aug. 30, 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 June 30, 2021 (“Second Quarter 2021”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
“It finally feels like we are back to normal levels of business activity,” said Doug Janzen, Chairman and CEO. “With the sudden onset of COVID-19 in 2020 Aequus, like many companies, aggressively lowered costs, slowed down programs and reduced sales force costs. In 2021 we more aggressively invested in future growth, launching the Evolve products, funding the regulatory costs of Zimed, increasing our legal and commercial diligence of potential new products and adding to our commercial team. This investment in future growth is expected to bolster revenues over the coming months and allow us to continue with the reVision transaction announced earlier this month.”
Grant Larsen, the Chief Commercial Officer added that “we were very pleased with the sales teams ability to incorporate Evolve into their product menu. We invested time and money streamlining processes, adding the e-commerce platform as well as refining sales strategies during the Second Quarter 2021, which was the first full quarter of sales since the Evolve product launch last March. Our business performed very well during previous Covid lockdowns and we are hopeful that business will continue to return to normal; However, we feel that we have a tested and successful pandemic response strategy if the Fourth Wave does lead to new restrictions. I am proud to be working with such a dynamic team and expect to see future sales growth and a return on our recent investments in people and infrastructure.”
“We are pleased to see the strong rebound in sales in Second Quarter 2021. While our losses compared to the same period last year look larger than normal by comparison, we want to remind investors that Q2 of 2020 coincided with the onset of COVID- 19 and was not a normal quarter considering the cost saving measure we implemented at the start of the pandemic.”
Financial Report Highlights
Aequus reported its second highest revenue quarter to date, with $651,516 in promotional services and product sales revenue during Second Quarter 2021 compared to revenue of $542,992 generated during the same period in 2020. During the six months ended June 30, 2021 (“YTD 2021”) Aequus achieved $1,143,337 in revenues compared to $1,122,442 generated during the six months ended June 30, 2020 (“YTD 2020”) – an increase of $20,895, or 2%.
Net losses increased by 114% in Second Quarter 2021 compared to the same period last year, with the Second Quarter 2021 net loss of $479,041 versus a $222,248 loss in the three months ended June 30, 2020 (“Second Quarter 2020”). The loss for YTD 2021 was $1,100,700 which is 75% higher than the $628,063 loss YTD 2020 primarily due to investments in R&D related to Zimed and increased sales and marketing activities which included the launch of the Evolve products. We remind investors that Covid Related cost cutting in Second Quarter 2020 have skewed the comparable period loss reporting. When comparing to previous non-Covid impacted quarters our current operating expenses are comparable to historical levels.
Highlights from the quarter are as follows:
- Sales and marketing costs for Second Quarter 2021 were $523,929 compared to $270,296 in Second Quarter 2020, an increase of $253,633 or 94%. This surge was mainly driven by an increase in sales forces activities as several COVID-19 pandemic restrictions are now lifted. During the three months ended Second Quarter 2020 the Company deliberately pulled back on expenses due to the uncertainties related to the pandemic. Advertising and promotional expenditures and related expenses increased in Second Quarter 2021 due to the launch of the Evolve products.
- The Company incurred research and development (“R&D”) expenses of $106,395 in Second Quarter 2021 compared to $13,740 in Second Quarter 2020. The Company incurred R&D expenses of $194,293 in YTD 2021 compared to $28,057 in YTD 2020. The majority of the increase was mainly attributable to strategic consulting services on quality assurance support, media engagements, work related to market access, and authorization submissions to Health Canada.
- General and administration (“G&A”) expenses were $497,393 in Second Quarter 2021 compared to $481,608 in Second Quarter 2020, an increase of $15,785. G&A expenses were $1,044,509 in YTD 2021 compared to $1,004,301 in YTD 2020, an increase of $40,208. The increase was mainly driven by consulting expenditures on opportunity assessments and corporate development matters.
Events subsequent to June 30, 2021
Aequus is in a strong cash position as management continues to explore new product and business opportunities. Subsequent to June 30, the Company entered into an Exclusive Right of First Negotiation Agreement with reVision and invested US$400,000 through reVision’s open convertible note offering.
Planned Shelf Prospectus Filing to Replace Soon to Expire Existing Shelf Prospectus
The Company’s financing strategy includes always maintaining an active Shelf Prospectus to give the Company the ability and flexibility to efficiently raise money by way of a public offering if and when market conditions are favourable or to provide resale registration rights for investors. The current Shelf Prospectus expires on October 16, 2021. As we have done in the past thee Company will be updating it’s 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 withand 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.
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