Aequus Provides First Quarter 2017 Financial Highlights
VANCOUVER, BC - May 30, 2017 – 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 first quarter ended March 31, 2017 and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
Q1 2017 Key Highlights
On March 13, 2017, the Company closed an agreement with Canaccord Genuity Corp. (“Canaccord") to which they agreed to purchase, on a bought deal basis, 17,250,000 units at a price of $0.30 per unit, for aggregate gross proceeds to the Company of $5,175,000. Net proceeds of the offering will be used for the development of the Company’s drug pipeline, business development and other general corporate purposes.
The Company recorded revenue of $293,002 in Q1 2017 compared to $116,083 in Q1 2016, representing a growth of 152% when comparing the two quarters. Revenues are attributable to its promotional activities for Tacrolimus IR, which launched in December 2015, and PRVistitanTM, which launched in April 2016.
Sales and marketing costs for Q1 2017 were $349,145, which included $71,014 in amortization and share based payments expenses. Depreciation and amortization, and share-based payments for Q1 2017 were $45,917 and $25,097, respectively, compared to $42,398 and $60,444, respectively, in Q1 2016. The amortization costs were primarily related to the acquisition costs of TeOra.
Aequus incurred sales and marketing expenses in Q1 2017 of $349,145 in Q1 2017 compared to $443,863 in Q1 2016, a decrease associated with launch related expenses that had been incurred in Q1 2016.
"We are pleased with the first year of progress of our commercial activities and the execution of our overall strategy to date,” said Ian Ball, Chief Commercial Officer at Aequus. “In the currently reported quarter and on a cash flow basis, our commercial revenues have covered the costs associated with our commercial infrastructure. We expect to add additional commercial products in 2017 that will leverage our existing salesforce giving us further confidence in our continued growth."
Revenues are expected to continue to grow in the current year as these products continue to penetrate market share held by the branded equivalents and similar medications within the class, along with new prescription products that Aequus is currently negotiating for the Canadian market. Sales levels are expected to be inconsistent and unpredictable over the next twelve months as reimbursement activities and inventory stock-up occurs for each product.
Development Program Activities
The Company incurred research and development expenses of $398,273 in Q1 2017 as compared to $169,093 in Q1 2016. The increase in research and development expenses by $229,180 was attributable to the successful completion of the second Proof of Concept clinical study for AQS 1301 (a once-weekly transdermal formulation of aripiprazole), FDA Pre-IND meeting preparations for AQS1302 (a long-acting transdermal formulation of clobazam) and ASQ1303 (a long-acting formulation of pyridoxine/doxylamine) and manufacturing of Clinical Trial Materials for AQS1303 in preparation of a Proof of Concept clinical study expected in mid-2017.
On March 2, 2017, Aequus acquired a license from Transdermal Pharma Research Laboratories LLC to a transdermal patch containing cannabinoids for the use in epilepsy, Multiple Sclerosis (“MS”), and certain other neurological disorders, broadening the Company’s pipeline and a complement to its growing neurology franchise. Aequus recently published a survey involving over 400 physicians in Canada and the United States which validated the medical need for improved clinical trial data supporting safety and efficacy of medical cannabis, reliability of dose delivery systems, high quality data collection tracking real world clinical outcomes, physician education, and quality controlled ingredients.
“Our entrance into the medical cannabis space is based on our ability to leverage our internal expertise in drug delivery to address the concerns identified by physicians,” said Doug Janzen, Chairman and CEO of Aequus. “We are confident that we can bring new revenue generating prescription products to Canada, advance novel cannabinoid formulations, add partnerships in the neurology and ophthalmology areas, and bring new drug delivery platforms to market in 2017.”
Additionally, the Company issued Camargo Pharmaceutical Services, LLC 158,437 common shares on May 29, 2017 in connection with a service agreement to provide regulatory consulting services for the Company’s product development programs in the United States.
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’ development stage pipeline includes several products in neurology and psychiatry with a goal of addressing the need for improved medication adherence through enhanced delivery systems. With a focus in neurology and other specialty areas, our most recent addition to the development pipeline was a long-acting form of medical cannabis, where there is a high need for a consistent, predictable and pharmaceutical-grade delivery of products for patients. Aequus intends to commercialize its internal programs in Canada alongside its current portfolio of marketed established medicines and will look to form strategic partnerships that would maximize the reach of its product candidates worldwide. 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 visitwww.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; the Company’s expected revenues; the timing of public listings; the advancement of the Company’s transdermal pyridoxine/doxylamine program into a Proof of Concept clinical study; the Company’s potential regional partnerships for its internal programs; the timing of public reimbursement decisions for VistitanTM; the regulatory requirements for the its transdermal aripiprazole program; and the Company’s expectations regarding the tech transfer to its development partner with respect to the Company’s transdermal patch for clobazam and doxylamine/pyridoxine transdermal patch. 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 positive results of clinical trials; obtaining regulatory approvals; general business and economic conditions; the Company’s ability to successfully outlicense or sell its current products and in-license and develop new products; the assumption that the Company’s current good relationships with its manufacturer and other 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; 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 29, 2016, 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.