Aequus Provides Fourth Quarter and Fiscal 2016 Financial Highlights
VANCOUVER, May 1, 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 full year ended December 31, 2016 and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
Key 2016 Highlights
- First recognition of revenues in 2016 with the launch of promotional efforts for two third-party commercial products; FY 2016 revenues of $701,633 vs NIL in FY 2015
- Decrease of 15% in losses, with ($1,187,849) loss before other income in the fourth quarter of 2016 compared to ($1,373,652) in the same quarter of 2015
- Successfully advanced its once-weekly transdermal patch for aripiprazole through Proof of Concept clinical studies
- Advanced two additional development programs, including the technology transfer of its once-daily transdermal patch for the management of pregnancy-induced nausea and vomiting
- Subsequent to the end of the quarter, closed a $5.2M financing underwritten by Canaccord Genuity Corp. and initiated a drug delivery program for medical cannabis
Aequus initiated its promotional activities for Tacrolimus IR in December 2015, and has since been awarded three major hospital tenders in the two largest provinces in Canada. Tacrolimus IR, promoted by Aequus, grew 90% year-over-year in unit volume in 2016 when compared to 2015 based on ex-factory data. Additional growth for this product is expected as patient switch programs are implemented in hospitals where tenders have been awarded.
Promotional efforts for VistitanTM began in May 2016, with an initial focus on gaining provincial listings for reimbursement of this product. Aequus’ market access team has successfully gained formulary listings in five major provinces across Canada, improving access for patients in those areas. We anticipate additional provincial listings in 2017 to contribute to the continued growth of this product.
The two products are within their initial launch period of promotional efforts and are therefore expected to have variable revenues quarter over quarter due to stock-ins and other one-time events such as sample costs. Aequus receives a tiered revenue split on incremental sales of the products from its partner. Fourth quarter 2016 total revenues reported were $166,901, with full year 2016 revenues of $701,633 which includes twelve months of Tacrolimus IR and six months of Vistitan™ revenues to Aequus.
“Our sales team have performed strongly in 2016, gaining access to physicians and other important customers. As each month passes we have a growing number of customers who are prescribing our products and building a stable base of sales,” said Ian Ball, Chief Commercial Officer for Aequus. “2016 has seen us achieve significant market access milestones, particularly in Ontario, our biggest province for sales. We continue to look for additional commercial stage programs to add to our established ophthalmology sales force,with a number of discussions underway.”
The company has also progressed discussions with Health Canada around the acceptability of the FDA clinical package and foreign market experience for its recently in-licensed products, Topiramate Extended-Release and Oxcarbazepine Extended-Release, and expects to file a New Drug Submission (“NDS”) in 2017or early 2018.
Progress of Product Pipeline
The Company continued to invest in its development pipeline in 2016. Aequus advanced AQS1301, a once-weekly transdermal patch which is currently in development for the treatment of certain psychiatric disorders, through a second successful Proof of Concept clinical study completed in March 2017. The two completed studies to date for AQS1301 have suggested that therapeutic levels of aripiprazole, the active agent in AQS1301, is achievable with the current formulation for the target patient populations. The Company plans to engage with the FDA in a pre-IND meeting to define the clinical study requirements for approval in the United States, following a 505(b)(2) pathway.
Investments were also made by Aequus in 2016 for its additional two development programs, primarily associated with the formulation optimization, prototype development and manufacturing of clinical trial material of AQS-1303, as well as continued formulation optimization of AQS-1302. AQS1302, a once-daily transdermal patch for clobazam, is intended for the treatment of certain epilepsies, including a rare and severe form called Lennox Gastaut Syndrome. AQS1303 is being advanced as a once-daily and up to a twice-weekly transdermal doxylamine and pyridoxine combination patch for the treatment of nausea and vomiting in pregnancy (NVP). We anticipate initiating a Proof of Concept clinical study for AQS1303 by mid-2017.
Aequus has been engaging with third parties around partnering discussions for each of its internal programs, with a goal of ensuring the maximum benefit is realized by shareholders.
Research and development expenses in the fourth quarter of 2016 were $295,115, as compared to $454,557 in the same quarter last year, and for the full year 2016, $1,127,780, as compared to $2,144,488 for 2015. The decrease in expenditures were attributable to slower development activities by the Company as it prepared for its next Proof of Concept study for AQS1301, and as it tech transferred AQS1302 and AQS1303 for further optimization and the manufacturing of clinical trial materials.
Selling, general and administrative expenses in the fourth quarter of 2016 were $1,059,635, as compared to $919,095 in the same quarter last year, and for the full year 2016, $4,437,436 as compared to $2,910,662 in 2015. The increase in expenditures were primarily due to work done in anticipation of launching Tacrolimus IR, brand development of Vistitan™, and building out of the sales and marketing team in Canada.
Aequus reported a loss before other income of ($1,187,849) in the fourth quarter of 2016, a decrease of 15% compared to ($1,373,652) in the same quarter last year, and for the full year 2016, ($4,863,583), as compared to ($5,055,150) for 2015. This improvement in loss before other income for both periods is primarily due to the recognition of revenues from its sales and marketing activities in 2016 for its two commercially promoted products, tacrolimus IR and VistitanTM .
“2016 was a productive year for Aequus as we established our commercial infrastructure, launched our first two products and began our transition to being a revenue generating specialty pharma company. In 2017 we hope to add additional revenue generating products into our Canadian sales infrastructure, continue to advance our internal programs, potentially add new drug delivery technologies to complement our current transdermal delivery platform, including the exploration of a number of exciting complementary opportunities in the medical cannabis space,” said Doug Janzen, Chairman and CEO of Aequus. “Subsequent to the end of 2016 we raised $5.2 million in an equity financing and we are well placed to make 2017 a transformative year for Aequus and want to thank shareholders and employees for their support and contributions.”
About Tacrolimus IR
Tacrolimus immediate release is an immunosuppressant used for the treatment and prevention of acute rejection following organ transplantation. Tacrolimus is part of a patient’s immunosuppressive therapy prescribed chronically in their lifelong management to prevent graft rejection. In 2015, the immunosuppressive market in Canada reached $241M in sales, with tacrolimus products accounting for $100M. With the assistance of Aequus’ promotional efforts and commercial team, the tacrolimus IR generic grew 90% year-over-year by unit volume in 2016 when compared to 2015 based on ex-factory data.
Vistitan™(bimatoprost 0.03%, ophthalmic solution), is a branded generic prostaglandin approved by Health Canada for the reduction of elevated IOP in patients with open angle glaucoma or ocular hypertension. The Canadian glaucoma market in 2015 was estimated to be over $182 million, of which prostaglandins remain one of the primary treatment options for lowering IOP in glaucoma. VistitanTM, which was approved by Health Canada in 2014, is currently the only marketed version of 0.03% bimatoprost ophthalmic solution in Canada.
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 visit www.aequuspharma.ca.
VistitanTM: Trademark owned or used under license by Sandoz Canada Inc.
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 timing of the Company’s follow-on, multi-dose bioavailability study 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. 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.
Aequus Investor Relations