|By PR Newswire||
|November 26, 2012 07:30 AM EST||
--41% Year-Over-Year Revenue Increase for the Quarter--
--Neovasc Reducer™ and Tiara™ Transcatheter Mitral Valve Data Presented at TCT 2012--
TSX Venture Exchange: NVC
VANCOUVER, Nov. 26, 2012 /PRNewswire/ - Neovasc Inc. (TSXV: NVC) today announced financial results for the three months ended September 30, 2012.
"In the third quarter, we continued to report robust increases in sales, with revenues for the quarter topping two million dollars," commented Alexei Marko, CEO of Neovasc. "The increase in revenues reflected gains in sales of our surgical tissue products, while our contract manufacturing and consulting services businesses also turned in steady performances in the quarter."
Mr. Marko continued, "After the close of the quarter, we announced an agreement to sell certain manufacturing rights to our surgical tissue product line to our distribution partner LeMaitre Vascular for US$4.6 million. The capacity freed up through the sale of the surgical tissue product line will allow us to focus on the production of customized biological tissue and the contract manufacture of tissue-based cardiovascular devices, and we foresee this business continuing to grow strongly into 2014."
During the quarter, positive acute results from preclinical studies of the Tiara™ transcatheter mitral valve were published in the Journal of the American College of Cardiology. In October, the Tiara program was selected as a Best New Device Concept for 2012 at the Transcatheter Cardiovascular Therapeutics (TCT) scientific symposium. Researchers also presented data at TCT showing that refractory angina patients implanted with the Neovasc Reducer™ device demonstrated improved clinical status and had no adverse events six months after implantation.
Mr. Marko concluded, "We expect to finish the year in a strong cash position, and these funds will enable us to continue to advance our two major new product development programs, the Neovasc Reducer and the Tiara mitral valve program, which is on track to achieve its first implantations in humans in 2013."
Results for the three and nine months ended September 30, 2012 and 2011 follow:
Revenues increased 41% year-over-year to $2,005,940 for the three months ended September 30, 2012, compared to revenues of $1,426,047 for the same period in 2011. Revenues increased 54% year-over-year to $5,353,539 for the nine months ended September 30, 2012 compared to revenues of $3,475,372 for the same period in 2011.
Product sales for the three months ended September 30, 2012 were $946,117, compared to $391,197 in the same period of 2011, representing an increase of 142%. Product sales for the nine months ended September 30, 2012 were $2,397,985, compared to $1,120,290 in the same period of 2011, representing an increase of 114%. The increase in product sales primarily reflects higher demand from LeMaitre Vascular, Inc. ("LeMaitre"), who distributes the Company's surgical strips and patches and is achieving higher penetration in both the North American and European markets. On October 31, 2012, Neovasc finalized its agreement with LeMaitre allowing LeMaitre to exercise its option to purchase certain specific rights to Neovasc's biological vascular surgical patch product technology on an accelerated basis, at an agreed price of US$4.6 million. Under the terms of the amended agreement, Neovasc has received US $4.255 million from LeMaitre, with the balance payable one year after closing. Neovasc will continue to supply LeMaitre with surgical patches until LeMaitre is able to receive appropriate regulatory approvals and start manufacture of the surgical patches themselves, anticipated towards the end of 2013. At that time, Neovasc will cease manufacture of all surgical patches.
Contract manufacturing revenues for the three months ended September 30, 2012 were $527,557, compared to $528,467 in the same period in 2011. Contract manufacturing revenues were $1,327,363 for the nine months ended September 30, 2012, compared to $1,053,678 in the same period of 2011, representing an increase of 26%. The increase in contract manufacturing revenues reflects the Company's success in attracting more contract manufacturing customers as well as larger orders from existing customers as they advance their new product development programs.
Revenues from consulting services for the three months ended September 30, 2012 were $532,266, compared to $506,383 in the same period in 2011, representing an increase of 5%. Revenues from consulting services for the nine months ended September 30, 2012 were $1,628,191, compared to $1,301,404 in the same period in 2011, representing an increase of 25%. The Company's consulting service revenues are contract-driven and they can fluctuate from quarter to quarter and year to year as current projects are completed and new projects start. The Company hopes and anticipates that it will be able to convert more of its current consulting services customers, who are currently in product development and clinical trials into contract manufacturing customers as each customer commercializes its own products, but this process is dependent on the success of our existing customers and revenues are therefore difficult to project.
Cost of Goods Sold
The cost of goods sold for the three and nine months ended September 30, 2012 were $1,275,096 and $3,149,177, respectively, as compared to $936,879 and $2,013,612 for the same periods in 2011. The overall gross margin was 36% and 41% for the three and nine months ended respectively, compared to 34% and 42% gross margin for the same periods in 2011. The Company has incurred one-time additional set up costs as it transitions away from surgical patch manufacture into contract manufacture of transcatheter valves and other similar cardiovascular devices with limited current revenues to offset such costs.
Total expenses for the three and nine months ended September 30, 2012 were $1,927,980 and $6,177,748, respectively, as compared to $1,450,773 and $4,374,776 for the same periods in 2011, representing an increase of $477,207 and $1,802,972 or 33% and 41%, respectively. Of these increases, non-cash share-based payments account for an increase of $117,749 and $590,026 for the three and nine months, respectively. In 2011 and 2012, the officers and directors of Neovasc were awarded a fixed number of options under the Company's established remuneration and incentive plans. While the actual number of options granted in each year was equivalent, under the Black Scholes model used to value the options, the higher price of the Company's shares in 2012 produced a higher overall valuation of the options issued, and therefore resulted in a higher non-cash charge to the income statement in 2012. Net of these non-cash share-based payments, total expenses increased $359,458 and $1,212,946 for the three and nine months, respectively, substantially due to an increase of $284,848 and $951,038, respectively, in clinical trial and product development expenses for the Company's two new product development programs and an increase of $73,392 and $253,262, respectively, in general and administrative expenses as corporate and strategic activities accelerate in line with revenue growth and product development advancements.
Selling expenses for the three and nine months ended September 30, 2012 were $40,503 and $132,513, respectively, as compared to $48,154 and $145,242 for the same periods in 2011. The Company is continuing to maintain relatively constant and modest selling and marketing costs while it focuses on growing its business-to-business revenue streams.
General and administrative expenses for the three and nine months ended September 30, 2012 were $937,202 and $3,094,474, respectively, as compared to $774,829 and $2,337,821 for the same periods of 2011, representing an increase of $162,373 and $756,653 or 21% and 32%, respectively. The increase in general and administrative expenses was primarily due to an increase of $78,485 and $477,309 in non-cash share-based payments for the three and nine months, respectively, and an increase of $73,392 and $253,262, respectively, in other expenses as corporate and strategic activities accelerate in line with revenue growth and product development advancements.
Product development and clinical trial expenses for the three and nine months ended September 30, 2012 were $950,275 and $2,950,761, respectively, as compared to $627,790 and $1,891,713 for the same periods in 2011, representing an increase of $322,485 and $1,059,048 or $51% and 56%, respectively. The increase in product development and clinical trial expenses was primarily due to an increase of $37,973 and $107,765 in non-cash share-based payments for the three and nine months, respectively, and an increase of $284,848 and $951,038, respectively, in other expenses as the Company invested in its two major new product initiatives: the COSIRA clinical trial for the Reducer and the preclinical Neovasc Tiara mitral valve development program.
The losses for the three and nine months ended September 30, 2012 were $1,206,914 and $3,988,560, respectively, or $0.03 and $0.09 basic and diluted loss per share, as compared with a loss of $891,507 and $2,880,746 or $0.02 and $0.07 basic and diluted loss per share for the comparable periods in 2011. The Company has successfully increased its gross profit for the three and nine months ended September 30, 2012 in comparison to the same periods in 2011. However, during the same periods the Company increased its expenditures on research and development for its products by more than the increase in gross profit, resulting in an overall increase in losses for the three and nine months ended September 30, 2012, in comparison to the same periods in 2011.
Liquidity and Capital Resources
Neovasc finances its operations and capital expenditures with cash generated from operations, lines of credit, long-term debt and equity financings. At September 30, 2012, the Company had cash and cash equivalents of $2,029,241, as compared to cash and cash equivalents of $2,404,510 at December 31, 2011.
Cash used in operating activities for the three and nine months ended September 30, 2012 was $445,147 and $1,673,554, respectively, as compared to $1,049,561 and $1,980,818 for the same periods in 2011. The decrease in cash used in the three and nine months ended September 30, 2012 compared to the same periods of 2011 is principally due to an increase in operating expenses offset by an increase in cash generated by working capital items. For the three and nine months ended September 30, 2012, operating expenses were $596,118 and $2,034,061, respectively, compared to $415,027 and $1,556,101 for the same periods in 2011, as more expenses were incurred in research and development activities, and working capital items generated cash of $147,605 and $340,724, respectively, compared to working capital items absorbing cash of $631,562 and $415,972, respectively, for the same periods in 2011 as accounts payable provided funding in 2012.
During the three months ended September 30, 2012 a $1,504,258 investment in GICs maturing on October 15, 2012 was re-classified as cash equivalents. Net cash invested in capital assets was $39,872 and $232,313 for the three and nine months ended September 30, 2012, respectively, compared to net cash invested in capital assets of $35,068 and $142,474 for the same periods in 2011. During the first nine months of 2012 and 2011, the Company continued to invest capital to expand its clean room and manufacturing facilities and research and development capabilities.
Net cash used by financing activities was $114,488 for the three months ended September 30, 2012 and net cash provided by financing activities was $26,308 for the nine months ended September 30, 2012, compared to cash provided by financing activities of $4,625,535 and $4,610,937 for the same periods of 2011. During the three months ended September 30, 2012, the Company paid off its bank overdraft and in addition, the liquid security agreement on long-term debt was removed and the restricted cash of US$40,000 was released.
On October 31, 2012, Neovasc finalized its agreement with LeMaitre
allowing LeMaitre to exercise its option to purchase certain specific
rights to Neovasc's biological vascular surgical patch product
technology on an accelerated basis, at an agreed price of US$4.6
million. Under the terms of the amended agreement, Neovasc has received
US $4.255 million from LeMaitre, with the balance payable one year
Interim Consolidated Statements of Financial Position (Unaudited)
(Expressed in Canadian dollars)
|Cash and cash equivalents||$||2,029,241||$||2,404,510|
|Prepaid expenses and other assets||53,173||23,372|
|Total current assets||3,247,309||4,968,625|
|Property, plant and equipment||1,425,497||1,290,651|
|Restricted cash and cash equivalents||-||40,840|
|Total non-current assets||1,425,497||1,331,491|
|LIABILITIES AND EQUITY|
|Accounts payable and accrued liabilities||$||1,090,443||$||591,476|
|Current portion of long-term debt||42,351||41,568|
|Total current liabilities||1,132,794||633,044|
|Total non-current liabilities||251,004||280,642|
|Total liabilities and equity||$||4,672,806||$||
Interim Consolidated Statements of Comprehensive Loss (Unaudited)
For the three and nine months ended September 30,
(Expressed in Canadian dollars)
Three months ended
Nine months ended
|COST OF GOODS SOLD||1,275,096||936,879||3,149,177||2,013,612|
|General and administrative expenses||937,202||774,829||3,094,474||2,337,821|
|Product development and clinical trials expenses||950,275||627,790||2,950,761||1,891,713|
|(Loss)/Gain on foreign exchange||(13,144)||73,070||(34,957)||41,015|
|LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD||$||(1,206,914)||$||(891,507)||$||(3,988,560)||$||(2,880,746)|
|LOSS PER SHARE|
|Basic and diluted loss per share||$||(0.03)||$||(0.02)||$||(0.09)||$||(0.07)|
Interim Consolidated Statements of Cash Flows (Unaudited)
For the three and nine months ended September 30,
(Expressed in Canadian dollars)
Three months ended
Nine months ended
|Loss for the period||$||(1,206,914)||$||(891,507)||$||(3,988,560)||$||(2,880,746)|
|Net change in non-cash working capital items:|
|Prepaid expenses and other assets||496||(8,434)||(29,801)||(21,048)|
|Accounts payable and accrued liabilities||256,131||(325,111)||498,967||(107,198)|
|Interest paid and received:|
|Decrease in investments||1,504,258||-||1,504,290||-|
|Purchase of property, plant and equipment||(39,872)||(35,068)||(232,313)||(142,474)|
|Decrease in bank overdraft||(145,927)||(48,649)||-||(213,280)|
|Decrease/(increase) in restricted cash & cash equivalent||41,040||(2,984)||40,840||8,444|
|Repayment of long-term debt||(9,701)||(9,306)||(28,855)||(27,871)|
|Proceeds from share issue, net of cost of $42,864||-||4,682,393||-||4,682,393|
|Proceeds from exercise of warrants||-||-||-||130,517|
|Proceeds from exercise of options||100||4,081||14,323||30,734|
|NET CHANGE IN CASH AND CASH EQUIVALENTS||904,751||3,540,906||(375,269)||2,487,645|
|CASH AND CASH EQUIVALENTS|
|Beginning of the period||1,124,490||435,766||2,404,510||1,489,027|
|End of the period||$||2,029,241||$||3,976,672||$||2,029,241||$||3,976,672|
About Neovasc Inc.
Neovasc Inc. is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer™ for the treatment of refractory angina, the Tiara™ device in development for the transcatheter treatment of mitral valve disease and a line of advanced biological tissue products that are used as key components in a variety of third-party medical products, such as transcatheter heart valves. For more information, visit: www.neovasc.com.
Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates," "believes," "may," "continues," "estimates," "expects," and "will" and words of similar import, constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; history of losses and lack of and uncertainty of revenues, ability to obtain required financing, receipt of regulatory approval of product candidates, ability to properly integrate newly acquired businesses, technology changes; competition; changes in business strategy or development plans; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; and other factors referenced in the Company's filings with Canadian securities regulators. Although the Company believes that expectations conveyed by the forward-looking statements are reasonable based on the information available to it on the date such statements were made, no assurances can be given as to the future results, approvals or achievements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update any forward-looking statements except as otherwise required by applicable law.
SOURCE Neovasc Inc.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Jan. 28, 2015 07:00 AM EST Reads: 10,178
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
Jan. 28, 2015 05:00 AM EST Reads: 4,165
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, addressed the big issues involving these technologies and, more important, the results they will achieve. Rodney Rogers, chairman and CEO of Virtustream; Brendan O'Brien, co-founder of Aria Systems, Bart Copeland, president and CEO of ActiveState Software; Jim Cowie, chief scientist at Dyn; Dave Wagstaff, VP and chief architect at BSQUARE Corporation; Seth Proctor, CTO of NuoDB, Inc.; and Andris Gailitis, C...
Jan. 28, 2015 04:00 AM EST Reads: 4,085
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
Jan. 28, 2015 02:45 AM EST Reads: 4,669
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Jan. 28, 2015 02:00 AM EST Reads: 4,637
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
Jan. 28, 2015 02:00 AM EST Reads: 4,612
SYS-CON Media announced that Splunk, a provider of the leading software platform for real-time Operational Intelligence, has launched an ad campaign on Big Data Journal. Splunk software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. The ads focus on delivering ROI - how improved uptime delivered $6M in annual ROI, improving customer operations by mining large volumes of unstructured data, and how data tracking delivers uptime when it matters most.
Jan. 28, 2015 01:45 AM EST Reads: 5,564
In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect at GE, and Ibrahim Gokcen, who leads GE's advanced IoT analytics, focused on the Internet of Things / Industrial Internet and how to make it operational for business end-users. Learn about the challenges posed by machine and sensor data and how to marry it with enterprise data. They also discussed the tips and tricks to provide the Industrial Internet as an end-user consumable service using Big Data Analytics and Industrial Cloud.
Jan. 28, 2015 01:00 AM EST Reads: 4,302
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
Jan. 28, 2015 12:30 AM EST Reads: 4,680
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
Jan. 28, 2015 12:00 AM EST Reads: 5,809
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.
Jan. 27, 2015 11:45 PM EST Reads: 4,089
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., showed what is needed to leverage the IoT to transform your business. He discussed opportunities and challenges ahead for the IoT from a market and technical point of vie...
Jan. 27, 2015 06:15 PM EST Reads: 5,360
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...
Jan. 27, 2015 06:15 PM EST Reads: 5,274
Dale Kim is the Director of Industry Solutions at MapR. His background includes a variety of technical and management roles at information technology companies. While his experience includes work with relational databases, much of his career pertains to non-relational data in the areas of search, content management, and NoSQL, and includes senior roles in technical marketing, sales engineering, and support engineering. Dale holds an MBA from Santa Clara University, and a BA in Computer Science from the University of California, Berkeley.
Jan. 27, 2015 06:00 PM EST Reads: 4,978
The Internet of Things (IoT) is rapidly in the process of breaking from its heretofore relatively obscure enterprise applications (such as plant floor control and supply chain management) and going mainstream into the consumer space. More and more creative folks are interconnecting everyday products such as household items, mobile devices, appliances and cars, and unleashing new and imaginative scenarios. We are seeing a lot of excitement around applications in home automation, personal fitness, and in-car entertainment and this excitement will bleed into other areas. On the commercial side, m...
Jan. 27, 2015 06:00 PM EST Reads: 4,710
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 27, 2015 02:30 PM EST Reads: 4,190
Performance is the intersection of power, agility, control, and choice. If you value performance, and more specifically consistent performance, you need to look beyond simple virtualized compute. Many factors need to be considered to create a truly performant environment. In his General Session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, discussed how to take advantage of a multitude of compute options and platform features to make cloud the cornerstone of your online presence.
Jan. 27, 2015 02:15 PM EST Reads: 4,990
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
Jan. 27, 2015 02:15 PM EST Reads: 4,690
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Jan. 27, 2015 01:15 PM EST Reads: 4,023
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Jan. 27, 2015 12:30 PM EST Reads: 4,546