VANCOUVER, April 23, 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 year ended December 31, 2020 (“Fiscal 2020”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
“We had a very strong end to our fiscal year and set new records for both the fourth quarter and annual revenue,” said Doug Janzen, Chairman and CEO of Aequus. “2020 gross revenues were $2,592,613 for the year, a 59% increase over Fiscal 2019 revenues of $1,632,524 and Q4 revenues were $851,187 a 59% increase over Q4 2019. Our fourth quarter is traditionally our strongest quarter, and we will work to carry this momentum forward into 2020. We significantly improved on our bottom line as well; the net loss for Fiscal 2020 was $1,045,360, a 66% reduction compared to a net loss of $3,106,104 in Fiscal 2019 and the net loss for Q4 2020 dropped to $165,376 compared to $1,037,354 for the same period in 2019.
I am very pleased with our performance in 2020. We have dramatically narrowed our operating losses and continue to close in on our goal of reaching operational break-even. With the recent launch of the EvolveTM and ReviveTM products our focus remains on commercial execution while expanding our existing partnerships to include the acquisition of new products for our growing pipeline. In the next few weeks, we will be submitting the first tranche of information to Health Canada to support the approval of Zimed-PF, a preservative free prescription product for open angle Glaucoma. We are very excited about introducing this product to the Canadian market. We are also encouraged by the pace of negotiations we are having with potential new partners and B2B relationships, despite the challenges associated with the impact of COVID-19 on our partners and customers.”
Key 2020 Financial Highlights
Key 2020 Operational Highlights
Commercial Activities
Corporate Activities
2021 Highlights - Subsequent to December 31, 2020
Commercial Update
“Despite Covid-19 and significant reductions in rep selling time, -41% in field vs full time deployment, Aequus combined revenues were $2.6 Million, +59% increase compared to Fiscal 2019. Vistitan revenue at +15% and Tacrolimus at +49% showed strong consistent growth as we increased clinic and transplant center penetration respectively. Fourth Quarter 2020 revenues from operations were $851,187, the first time in our Company’s history that we exceeded $750,000 in sales for a single quarter. We’ve successfully executed sales force deployment strategies into key professional areas of Ophthalmology and Transplant across Canada. We’ve used Covid as an opportunity to improve our remote selling capabilities and scale out our technology with video conferencing and professional CRM implementation,” says Grant Larsen, Chief Commercial Officer with Aequus. “Our accelerated ability to adapt to market conditions, and implement digital technology with a scalable platform of assets, is expected to attract international partners looking for rapid access to the Canadian marketplace.”
With the addition of business development, medical science liaison and commercial analysis resources in late 2020, our focus is on expanding our product offerings in key strategic areas as well as expanding our established partnerships with Sandoz and Medicom. With a new drug establishment license in Canada, and the demonstrated ability to deliver on promotional partnerships, in-license agreements, we have a flexible business model capable of adapting to many portfolio opportunities.
Operating Expenses
The Company reported an operating loss before other income of $1,064,989 for Fiscal 2020, an improvement of 60% from the loss before other income of $2,636,560 in Fiscal 2019. The lower loss was primarily due to higher sales and a decrease in research and development expenses. The Fiscal 2020 improvement in loss was offset by higher sales and marketing expenses and a higher interest and accretion expenses recognized in general administration expenses which related to the debenture issued during Fiscal 2019.
Sales and marketing costs in Fiscal 2020 were $1,547,773 when compared to $1,857,478 in Fiscal 2019, a reduction of 17% or $309,705. The majority of the reduction related to a decrease in sales activities and reduced work hours due to the COVID-19 pandemic response restrictions which resulted in temporary layoffs, limited travel to customers and reduced in-person meetings. Non-cash expenses for depreciation, amortization and share-based payments in Fiscal 2020 were $91,209 and $150,433 respectively, compared to $189,309 and $82,241 respectively in Fiscal 2019.
Research and development project maintenance expenses in Fiscal 2020 were $54,608 when compared to $210,827 in Fiscal 2019, a decrease of 74% or $156,219. The majority of the decrease was attributable to a reduction in consulting and compensation related expenses as we are now focused on revenue generating third-party commercial products as opposed to internal product development programs.
General and administration expenses in Fiscal 2020 were $2,055,221 when compared to $2,200,779 in Fiscal 2019, a decrease of 7% or $145,558. The Company’s interest and accretion expenses relating to the convertible debenture issued in May 2019 were $246,753 and $232,433 respectively for Fiscal 2020, compared to $147,478 and $223,428 respectively for Fiscal 2019. The Company recognized cost reductions in Management, wages and related, and travel, and legal and professional fees in Fiscal 2020 which were offset by the increased expenses related to the convertible debenture and interest expenses.
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.