VANCOUVER, April 29, 2020 – 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 year ended December 31, 2019 (“Fiscal 2019”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
“We had a strong end to 2019 and set new records for both quarterly and annual revenue,” said Doug Janzen, Chairman and CEO of Aequus. “Q4 2019 revenues of $535,466 were 44% higher than the same period last year and we continue to drive this momentum forward into 2020, with preliminary revenue numbers in Q1 looking positive. This, in combination with efforts to streamline operations in response to the changing world around us, we are aiming to reach operational breakeven in 2020.
This past year, we were very pleased to add several new ophthalmology products to the commercial pipeline through our partnership with Medicom, and expect additional product announcements between Aequus and Medicom in the near term. We are working diligently on the preparations for a successful launch of Evolve® (the dry eye products from Medicom) in the coming months. With our focus turned to the launch of Evolve® and the continued growth of our glaucoma prescription product, we have made the decision to permanently discontinue the Zepto program. We previously announced having halted sales of Zepto in Q3 of 2019 while Mynosis worked through modifications of the product.
Finally, we would like to thank Damien King for his contributions and guidance while being a director and wish him well as he resigned from our board to focus on a new business venture.”
Key 2019 Financial Highlights
Key 2019 Operational Highlights
2020 HIGHLIGHTS - Subsequent to December 31, 2019
Revenues in Fourth Quarter 2019 were $535,466, an increase of 44% compared to the quarter ended September 30, 2019 and a $298,239 increase over the same period last year. Revenue for the year ended December 31, 2019 was $1,632,524 (2018 - $1,410,240), a 16% increase over the year ended December 31, 2018. The increases seen can be attributed to a strong Q4 2019 and increased product acceptance in certain provinces toward the end of the year.
“Over the past three years, our national sales coverage and strategies have matured significantly. The sales force were able to increase sales volumes in 2019 to achieve revenue growth despite the decrease in the profit share split last year,” said Anne Stevens, Chief Operating Officer and Director of Aequus. “With the anticipated launch of the Evolve® and continued expansion efforts for our ophthalmology franchise, Aequus has positioned itself as a key partner for international companies looking to access the Canadian marketplace.”
The Company expects to continue to grow product sales for both Tacrolimus and Vistitan and expects promotional marketing services revenue to increase over the duration of the contract.
The Company looks to continue leveraging its existing core capabilities and commercial infrastructure to expand its presence and product offerings within ophthalmology. The Company will continue its strategy of adding to its existing product portfolio through promotional partnership agreements, asset acquisitions, in-licenses, and internal development programs.
The Company reported an operating loss before other income (loss) of $2,636,560 for Fiscal 2019, a decrease of 6% from the loss before other income (loss) of $2,808,029 in Fiscal 2018. The lower loss was primarily due higher sales and a decrease in research and development expenses. The improvement in loss was offset by higher sales and marketing expenses and new interest and accretion expenses recognized in general administration expenses which related to the debenture issued during Fiscal 2019.
Sales and marketing costs in Fiscal 2019 were $1,857,478 when compared to $1,646,076 in Fiscal 2018, an increase of 13% or $211,402. The majority of the increase related to an increase in the number of outside-sales representatives and the costs related to their activities. Non-cash expenses for depreciation and amortization and share-based payments in Fiscal 2019 were $189,309 and $82,241 respectively, compared to $187,793 and $108,046 respectively in Fiscal 2018.
Research and development project maintenance expenses in Fiscal 2019 were $210,827 when compared to $526,935 in Fiscal 2018, a decrease of 60% or $316,108. The majority of the decrease was attributable to the decrease in consulting costs and patent and intellectual property protection costs and is a result of our focus on revenue generating third-party commercial products as opposed to development programs.
General administration expenses in Fiscal 2019 were $2,200,779 when compared to $2,045,258 in Fiscal 2018, an increase of 8% or $155,521. In May 2019, the Company issued a convertible debenture resulting in interest and accretion expenses relating to the debenture of $195,241 and $223,428 respectively, whereas no similar debt was existed in Fiscal 2018. The Company recognized cost reductions in consulting, travel, and share-based payments in Fiscal 2019 which were offset by the increased expenses related to the convertible debenture.
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.