NBY - Earnings call transcript Q4 2023 | NovaBay Pharmaceuticals, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the NovaBay Pharmaceuticals Fourth Quarter and Full Year 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the call to Jody Cain. Please go ahead.

Jody Cain

This is Jody Cain with LHA. Thank you for participating in today's call.

are Tommy Chief Officer. Law, NovaBay General Officer from and Counsel; Interim me Justin Executive Hall, and Joining Chief Financial

like that forward-looking from that by listeners These materially forward-looking of to different during risks laws. actual I'd call and results involve this be uncertainties federal comments securities results. management cause within any statements made include anticipated statements the could meaning will remind to

the broader particular, and company's information impact is In upon such available based is control could operations, results outlook circumstances uncertainty the NovoBay's best results financial of time This the beyond economy. for change there about impact circumstances any today's that on estimate the and means that at contemplated discussion.

and Novo of please sec.gov. and description the Securities uncertainties, and Bay's Commission with list which available review Exchange risks For are at filings a

this the no except statements only date the circumstances of as the accurate content contains XXXX. events law. to Furthermore, required NovaBay is live XX, of information or that or update as to March revise the conference of reflect call by broadcast, obligation undertakes

now to Justin call I'd the over like And Hall. to turn

Justin?

Justin Hall

a thank our runway extending cash DERMAdoctor operating environment. expenses, our our divestiture to this which capital reduces Thank everyone, Jody. our afternoon, our We of in recent growth opportunities for of higher business business. with priority care pursue step and sale Good of us. joining took The and you, skin better NovaBay major streamlining you continued positioning aligns with the market in challenging

during COVID-XX to product XXXX November the direct-to-consumer DERMAdoctor of height lineup NovaBay acquired pandemic. the our in expand

companies during continue e-commerce sales to were many Unfortunately, post not our projections similar the strategy expectation realized. a like pursued grow Our that that pandemic. pandemic, would was other

today was to reporting decline in our care from skin major we're in that a decision divest segment year-over-year show DERMAdoctor. which a sales results factor financial The our

by platform Spray Avenova care solution, doctor of customers the in to is on and loyal #X our now a our business. is sales evidenced the is core recommended avenova.com, subscription-based loyalty opportunities focus Amazon sales and on channels. most which and antimicrobial in OTC increase us established sales from productive customer Our lash number in This subscription-based X eye lid XX% as of the providing grow. XX% unit online increase year-over-year

expertise. substantial in XXXX, up through from A the were XX% Notably, prescribers XX% and accomplished for marketing by spend online approximately sales in all XX% of while this year from sales we reducing XXXX. marketing digital our that's

as growth business channel our contributed the Our deepen professionals. care physician dispensed in eye to of relationships to eye also XXXX we with work care

revenue, a around just this channel by a our establishing recommended brand. direct-to-consumer Avenova effect halo Beyond as creates sales doctor

Last physicians prescription-only manage help we our also launched symptoms physician eye the chronic year, optic cornea that patients allograft provides the for ocular natural X-step of the allograft only It's protective to placental integrity and the Allograft This aimed Avenova dry with through preserves surface a the X at of conjunctiva state. of their manufactured repair network BioREtain launched we new environment a the recovering who dispensed tissue. our return the further promotional of products. rewarding programs channel. process branded the Last year, Avenova the healthier helping using patented

convenient with discussing postoperative approval sustained free clobetasol ophthalmologists allografts FDA of announced use solution and To optimal and webinar pain. rapid, a CME ocular inflammation our recently steroid executed for by candidate key Eyenovia the selection. prescription-only Eyenovia. strategy a with prescribed more differentiated in unique provides patients growth of we recently, of cataract allografts, ocular sponsored further a surgeons. the agreement co-marketing use for Clobetasol a surgery and compelling, on new surface through support in we conditions optic More featuring leaders opinion

clinical of stellar X on within total based achieved absence was out approval of achieved XX pain complete out postsurgical nearly results and patients XX FDA X inflammation surgery. absence XX showing fact, patients days of of In ocular of

first market more will Under of agreement, with years. leverage XX is the to U.S. enter established market approved thousands our clobetasol in new steroid newly care co-marketing our the to than This the relationships we ophthalmic professionals product. eye

channel a line complementary which accelerate opportunity Our our provides to commercialization, ready-made this Avenova products. to is product's of

our shares opportunity high-quality who addition, sales surgeons. are our market products. excited through Eyenovia will Avenova We're nationwide considerable additional representatives developed ophthalmic This awareness of scientifically to is Avenova. and professional commitment to targeting and cutting-edge with Eyenovia, grow to Spray In which ophthalmic its generate prescription sales a partner

The Our months. our receive co-marketing to how this soon to has in dispensed our channel increasingly agreement with is clobetasol of a business. building product coming co-marketing Avenova as expected name as expected yet physician the trade begin another is summer become initiatives in important example

Now I'd results. Law like to turn our Tommy? the to call to financial over Tommy review

Tommy Law

period, care the product eye wound I'll from afternoon, million, included segment. for full QX and XXXX with by Total from increased $X.X position. XXXX care fourth the and $X.X skin the to everybody. million good then the sales. results which cash review our and you, for increase care and sales X% year million for eye sales wound net higher from the care prior $X.X of quarter Total and with and were Thank XXXX due start $X.X segment the Justin, quarter care million year

R&D million the quarter to expenses the due were prior a period. for primarily and for the the digital a services. of in for with from were Gross for lower professional outside use margin Sales were up and expenses decrease reflecting G&A the XX% $X,XXX headcount XXXX services. the slightly from marketing expenses from year on the quarter year, from million, $X.X decrease for costs fourth decrease of $X.X to reduced of XX%, expenses prior year, product decrease $XX,XXX quarter, the professional XXXX. and outside million a fourth XX% million advertising net for XX% lower was $X.X revenue for prior $X.X

million, XXXX of respectively. goodwill, charges $X.X also of changes quarter we liabilities the to DERMAdoctor and recorded quarter fourth XXXX net to asset The $XX,XXX. other gain issuance the related the impairment in compares in for million included was and gain items, other XXXX of and notes the XXXX quarter fair of for $X.X and of value noncash a to and intangible impairment related of of for with expenses warrant the a the issued costs of changes The Among quarter expenses fourth related noncash included the due $XXX,XXX, Other convertible fourth of fair was of on of XXXX on which This May $XXX,XXX, noncash primarily fourth XXXX $XX,XXX value respectively. and in XXXX. contingent to DERMAdoctor amortization net discount of $XXX,XXX, quarter business business. the of fourth XXXX liability

Net or loss to million attributable million adjustment $X.XX with noncash quarter common a stock common was net to to fourth for preferred $X.XX loss $X.X related compares $X.X or share, the of of the stockholders attributable which a stockholders per of share. This conversion included for quarter of per fourth XXXX million $X.X prices. XXXX

driven wound and Total our $XX.X from sales care channels XX%. segment increase our XXXX of dispensed for and full grew higher and by our our eye care Turning margin Avenova now were million financial versus included to results. and $X.X sales OTC and $XX.X X% XXXX from and skin segment on well contribution care as of XXXX XXXX million X% were the through physician at care branded remained wound an products. sales and net unchanged for product as wound revenue Gross care the care the relatively million, net from year eye segment. Year-over-year

by XXXX, and For with expenses and marketing sales XX%, XX% compared decreased expenses both G&A XXXX. decreased by

$X.X We noncash impairment XXXX the goodwill, charges DERMAdoctor were in the intangible to intangible impaired prior assets and $XXX,XXX and year. to respectively. indefinite-lived long million, assets XXXX Goodwill, year. business XXXX of were for the R&D recorded related DERMAdoctor asset and expense versus million life for $X.X XXXX business fully related the for $XX,XXX other and

modification recorded respectively. on XXXX, of $X.X and noncash $X.X XXXX and million, For common loss stock a warrants million we the of

on in XXXX, fair of and and was noncash gain $X.X liability XXXX For value million changes $X.X respectively. million warrant

$X.X changes value liability XXXX, in noncash was gain on For fair million. contingent of

$X.X was in May million primarily expense issuing to for of Other the for notes discount $X.X amortization net net XXXX issued increase due and million the versus convertible with of expense XXXX. other the costs XXXX to related

$X.X with loss conversion XXXX conversion to or a stockholders adjustment attributable was million. XXXX included per preferred loss $X.X Net stockholders This to for of to net to stock which share, million attributable a share, million. prices for common noncash which included $XX.X adjustment preferred per or $XX.X $XX.XX a compared of prices of $X.XX million common stock noncash

XXXX, XX, of cash we DERMAdoctor the $X.X and the of equivalents cash divestiture. as reported million million $X.X December of upon closing received We

single of sale our more we And the to lastly, as managing will eye back our a DERMAdoctor, segment, go segment. and care with wound profitable business

I'll now call back to the And Justin. turn

Justin Hall

Thanks, Tommy.

growth closed, a sale that is the well-established segment. has DERMAdoctor brand care on With forward look we of once business Avenova to focusing potential. now our eye still again tremendous

programs physician on to capitalizing having further opportunities on this For we're example, build additional channel. channel in success with the various dispensed are and

direct-to-consumer also relationships supports prescription this halo sales recent mentioned, our product. as instrumental marketing channel over-the-counter and effect with our doctor in around for I sales As developing a provides product channel such recommended is agreement Eyenovia. This

we've that allowing benefit over and while side, continue developed managing past is we which sales our to several direct-to-consumer expenses. marketing prudently expertise the promote digital us from On the effectively years, our products to the marketing

ready you With to that your thank now Operator, I overview, attention. we're questions. take for

Operator

Ladenburg from [Operator Jeffrey comes Cohen Today's Thalmann question with Instructions] & first Company.

Jeffrey Cohen

few my a some about couple So months territories past of you a just the Sonoma could firstly, over talk EU or comments I 'XX? regarding the end. of maybe bit and maybe questions guess, anticipatory little some from

Justin Hall

Yes, absolutely. Sure.

on are EU, expanding the working we agreement with So year. announcing Sonoma earlier into this that

over to EU. distributors is The step approach various first the in

Sonoma product. get people So on will Avenova branded Sonoma those their as product, hypochlorous product their interested. working with we The have an be partnerships but to those acid, been

reaching over out gauging And there distributors and to interest. so we are

Jeffrey Cohen

it. Got Okay.

any the to broken revenues So moment? other that skin -- would of than and be break you your at out, and eye tend out

Justin Hall

Yes.

not. probably So

So by we in out past, or sales typically, distribution the not channel by broken channel. have

think future. provide commentary some as around that out to to But the So in I that happy grow. sales don't we're that going break

Jeffrey Cohen

for accounts new of initial about products? the customers And how well. Okay. And talk new -- talk then some as of and you maybe the launches some demographics potential as targeting you're subscription the about could

Justin Hall

right I exciting with Eyenovia. on partnership have think that is our we most thing Well, Sure. going the now

field had So be the Eyenovia, to in sales gain that all we top going we field no representatives. are to operated representatives of just all XX of in sales with force, metropolitan XXXX, are an we sales And inside with going areas.

especially little a personal scaled And so of the remember out talking more around to having about offices. you sales tremendously, sort when Avenova, return of past, didn't sales to representatives just visiting Jeff, in a up that we during driving make sense much think a broader it cars, pandemic to is the years may XX have reach in we I field bit a had reps this to company physicians and doctors' in field touch. back

switch is limiting. So effective, we very inside cost somewhat did which but over model, rep an to it's also

and can that and the accounts doctors' who's your going only a get certain sell are There have you into physically product really you into rep if offices offices.

with partnering we're Eyenovia. So

they to get side, experienced and that on sales CRM full to that's has rep. a their getting They really So existing out an to. that team can of we're sell also field customers and going inside reach sales they're

is major of really more patients. that get So the I and in physician out Avenova channel we're brand XXXX going to think that in to have dispensed leverage push front the

prescription pushing that going So strategy. be Avenova more direct-to-consumer what sales. our really we're we're into XXXX turn And having a as to will that's lot hopefully, in

Jeffrey Cohen

'XX Okay. at for think marketing far changing to strategy, And digital as is from XX? as us, compared then the that I lastly all

Justin Hall

direct-to-consumer Great thank In Jeff, channel. that really a because our you quite in for has and question, XXXX, Yes. sales strategy bit. the changed our really asking was focus

monumental of saw promise we And some we sort shift market. real that made in a so because

nimble. think products directly to our future. of over consumer just our was And be to the sort in the thought quite on said in end consumer selling call, as I to you going I be survive projections have really order so the this to we And products, And over-the-counter world, weren't Internet, realized.

sales And in our so coming of now strategy towards eyeballs brand. pivoting a need end and online, XXXX spend we direct-to-consumer high consumer solely bought be fruition from in to ad really the building away change a depending where did is on platform quite to

that having it. they a told Doctor focusing instructed recommended have it by flywheel of away consumers repurchase, physician So shifting really their once products doctor that from are to then on use recommended and and to about been product. the then able

marketing of is we're XXXX. strategy sales a and to one on that of different we it sort XXXX, now end the in So but in and it tail in shifted all

Operator

The Edward from Capital. next question Ascendiant Woo is with

Edward Woo

guys? My question from expect lot you we just Are should Avenova? is, you new products focused a on less

Justin Hall

Yes.

really a great it as Ed, on Jeff's well. of that's So follows and sort question, question

we spending through will what partners. product you our R&D and So is not development. in on But innovation are developing new see money

agreement. And that so with and then profit lucrative selling so that we both saw in is in recently partnership QX, Allograft more us that's agreement what into our the a Allograft good Avenova BioStem, with Avenova Eyenovia incredible you the to started which agreement of innovation, entered and allows the with

and innovation, and into a lot also to bringing product it that's So rolling that our out differentiated a customers. very portfolio unique, our bringing of

development rollouts, and R&D. but see going be product partnerships will not you own new to So some some through through our and it's all product

Operator

concludes Thank session. to I remarks. question-and-answer would now you. This like turn closing call Hall over Justin our to for back the

Justin Hall

joining established providing eye again, in next day. your refined our about you vision opportunities call face business. We during to for NovaBay. our and We're strategic us excited our have the care today interest we look nice with quarterly a Thanks Thank May. in and forward an update and

Operator

participation. The conference concluded. has you now for Thank your

lines. You now may your disconnect

NovaBay Pharmaceuticals (NBY) 26 Mar 242023 Q4 Earnings call transcript