VANCOUVER, May 28, 2021 – 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 March 31, 2021 (“First Quarter 2021”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
“We had a productive start to 2021,” said Doug Janzen, Chairman and CEO. “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.”
“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 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 this year.
The Company reported an operating loss before other income of $623,636 for First Quarter 2021, a 53% change from the loss before other income of $408,706 in the three months ended March 31, 2020 (“First Quarter 2020”) . The higher loss in First Quarter 2021 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 First Quarter 2021 had revenues of $491,821, which is a 15% decrease over the $579,450 revenue during the First Quarter 2020. The fluctuations in revenue were 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. COVID restrictions continue to be an access barrier in Ontario and Quebec, but the impact of the COVID restrictions is not measurable.
Sales and marketing costs in First Quarter 2021 were $477,830 when compared to $451,146 in First Quarter 2020, an increase of 6% or $26,684. The majority of the increase related to the launch of the Evolve products and related salesforce and marketing expenses.
Research and development costs in First Quarter 2021 were $87,898 when compared to $14,317 in First Quarter 2020, an increase of 514% or $73,518. The increase related to market access consultants and Health Canada approvals required for the launch of the Evolve products.
General and administration costs in First Quarter 2021 were $547,116 when compared to $522,693 in First Quarter 2020, an increase of 5% or $24,423. The majority of the increase related to a $42,015 increase in new consulting work required to support strategic business development; a $44,541 non-cash increases in share-based payments expenses; and, a $36,934 increase in management fees. These higher costs were offset by decreases in legal, travel costs and accretion expenses.
General Corporate Update
During the First Quarter 2021 there were two notable corporate activities:
Planned Shelf Prospectus Filing to Replace Soon to Expire Existing Shelf Prospectus
The Company’s financing strategy includes maintaining an active Shelf Prospectus to give the Company the ability and flexibility to efficiently raise money by way of a public offering when market conditions are favourable or to provide resale registration rights for investors. The current Shelf Prospectus expires on October 16, 2021. The Company is planning to update 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.
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