|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.
SYS-CON Events announced today that iDevices®, the preeminent brand in the connected home industry, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. iDevices, the preeminent brand in the connected home industry, has a growing line of HomeKit-enabled products available at the largest retailers worldwide. Through the “Designed with iDevices” co-development program and its custom-built IoT Cloud Infrastruc...
Feb. 12, 2016 10:00 AM EST Reads: 121
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
Feb. 12, 2016 09:51 AM EST
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
Feb. 12, 2016 09:30 AM EST Reads: 209
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
Feb. 12, 2016 09:00 AM EST
WebSocket is effectively a persistent and fat pipe that is compatible with a standard web infrastructure; a "TCP for the Web." If you think of WebSocket in this light, there are other more hugely interesting applications of WebSocket than just simply sending data to a browser. In his session at 18th Cloud Expo, Frank Greco, Director of Technology for Kaazing Corporation, will compare other modern web connectivity methods such as HTTP/2, HTTP Streaming, Server-Sent Events and new W3C event APIs ...
Feb. 12, 2016 09:00 AM EST
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
Feb. 12, 2016 06:00 AM EST Reads: 248
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
Feb. 12, 2016 05:45 AM EST Reads: 457
Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
Feb. 12, 2016 05:00 AM EST
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Feb. 12, 2016 02:30 AM EST Reads: 226
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
Feb. 12, 2016 12:45 AM EST Reads: 408
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Feb. 12, 2016 12:00 AM EST Reads: 283
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
Feb. 11, 2016 10:00 PM EST Reads: 124
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Feb. 11, 2016 03:45 PM EST Reads: 419
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
Feb. 11, 2016 02:45 PM EST Reads: 445
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
Feb. 11, 2016 01:45 PM EST
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
Feb. 11, 2016 01:30 PM EST Reads: 445
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
Feb. 11, 2016 12:00 PM EST Reads: 220
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
Feb. 11, 2016 11:30 AM EST Reads: 102
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
Feb. 11, 2016 11:30 AM EST Reads: 256
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
Feb. 11, 2016 11:00 AM EST Reads: 137