Aequus Pharmaceuticals first quarter results show good progress in spite of the coronavirus pandemic

Aequus Pharmaceuticals first quarter results show good progress in spite of the coronavirus pandemic

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Aequus Pharmaceuticals Inc. (CVE:AQS) (OTCQB:AQSZF) has reported its financial results for the first quarter ended March 31, 2021, showing good progress in spite of the coronavirus (COVID-19) pandemic.  In the results statement, Doug Janzen, Aequus chairman and CEO, commented: “We had a productive start to 2021. 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.” READ: Aequus Pharmaceuticals receives $1.48 million from warrant acceleration exercises Janzen added: “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.” The company said it 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 far in the current year. On March 1, 2021, the company announced the commercial availability of its 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. However, 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, the company expects Q2/Q3 campaigns and expenses to create sales growth and penetration into new specialty areas. With the launch of Evolve, Aequus said it has added an E-commerce platform to order and direct ship to professionals nationally. It expects 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, Aequus said. Financials detailed Aequus reported an operating loss before other income of $623,636 for the first quarter of 2021, a 53% change from the loss before other income of $408,706 in the three months ended March 31, 2020. The company said the higher loss 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 company posted first-quarter 2021 revenues of $491,821, a 15% decrease over the $579,450 revenue during the same period in 2020, 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. It noted that COVID-19 restrictions continue to be an access barrier in Ontario and Quebec, but said the impact of the restrictions is not measurable. It noted that its first-quarter sales and marketing costs were $477,830 when compared to $451,146 in the same period in 2020, an increase of 6% or $26,684 the majority of which related to the launch of the Evolve products and related salesforce and marketing expense, meanwhile, Research and development costs were $87,898 when compared to $14,317 in 2020, an increase of 514% or $73,518 which reflected market access consultants and Health Canada approvals required for the launch of the Evolve products. Aequus is a growing specialty pharmaceutical company focused on developing and commercializing high-quality, differentiated products. The company has grown its sales and marketing efforts to include several commercial products in ophthalmology and transplant. It 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. Contact the author at jon.hopkins@proactiveinvestors.com

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