By The Life Science Report
Source: The Life Sciences Report 06/21/2017
A San Diego-based pharmaceutical company that focuses on over-the-counter medications reported strong Q1/17 results and expects to begin marketing a nasal spray by the end of the year.
Innovus Pharmaceuticals Inc. (INNV:OTCQB), a rapidly growing, San Diego-based pharmaceutical company that focuses on over-the-counter (OTC) medications, reported Q1/17 earnings of $2.2 million, an 865% increase over Q1/16, and a 28.7% increase from Q4/16.
Ajay Tandon, an analyst with SeeThruEquity, noted that “1Q17 growth was driven by the strong performance from the company’s expanded sales distribution, and an increase in the number of commercial products to 18. Innovus continues to benefit from the performance of in-licensed products from Beyond Human and its BTH® sales and marketing platform—with Vesele, Sensum+, UriVarx, Zestra, RecalMax and BHT representing the majority of revenues.”
He also stated that “the results demonstrated continued sales execution and place the company well on its way towards its guidance for $10mn–$15mn for the full year as it expands sales channels for its portfolio of 18 commercial products.” He noted that the company’s gross margins “remained at attractive levels, at 79%, allowing the company to cash burn and target profitability. . .INNV ended the quarter with cash on hand of $2.4mn and total debt of $2.3mn, with its balance sheet benefitting from an equity offering in which INNV raised $3.8mn.”
Tandon expects FlutiCare, a generic reformulation of Flonase nasal spray, to provide growth, calling its launch “a key event to watch for 2018. . .FlutiCare™ is a fluticasone propionate nasal spray for allergic and non-allergic rhinitis (“hay fever”/”stuffy nose”), which Innovus has estimated represents more than a $1 billion market opportunity; it is the leading nasal steroid prescribed in the US, with 40mn units sold since 2014.”
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He reiterated that Innovus expects FlutiCare to “generate $10-15mn in revenue in its first year of commercial operations following full US distribution. Key to this view is the broad distribution plans for Fluticare™. This includes distribution in over 20,000 U.S. retail stores, including Walgreens, CVS, Rite Aid, Kroger, Target, and Safeway. FlutiCare™ will also be sold in the company’s Beyond Human Sales & Marketing Platform, which has access to ~3,000 newspapers and magazines reaching 20–30 million consumers per month, two million current subscribers, access to over 140 of its websites, online retailers and Amazon.”
“If management is able to meet its guidance in 2017 for $10mn to $15mn in revenue, the company could be looking at a breakout year in 2018 with the addition of $10mn–$15mn from FlutiCare™,” stated Tandon.
“Management also indicated that it is targeting cash flow breakeven by the end of the year, which would reduce additional dilution risk from share issuances. We are targeting $14.7mn in revenue for 2017E and $25mn for 2018E, respectively,” noted Tandon.
SeeThruEquity has set a target price of $0.65 per share for Innovus. Shares are currently trading around $0.11.
“We see Innovus as a high-risk / high-reward investment opportunity in the OTC pharmaceuticals space with a differentiated business model focused on men and women’s health and vitality. We see several potential catalysts for the company over the next six to nine months stemming from its outlook for robust growth, and the upcoming launch of Fluticare™, which is now set for 4Q17,” concluded Tandon.
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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own shares of the following companies mentioned in this article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Innovus Pharmaceuticals Inc. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
Ajay Tandon, an analyst with SeeThruEquity, noted that 1Q17 growth was driven by the strong performance from the company's expanded sales distribution, and an increase in the number of commercial products to 18. Innovus continues to benefit from the performance of in-licensed products from Beyond Human and its BTH® sales and marketing platform—with Vesele, Sensum+, UriVarx, Zestra, RecalMax and BHT representing the majority of revenues.
He also stated that the results demonstrated continued sales execution and place the company well on its way towards its guidance for $10mn–$15mn for the full year as it expands sales channels for its portfolio of 18 commercial products. He noted that the company's gross margins remained at attractive levels, at 79%, allowing the company to cash burn and target profitability. . .INNV ended the quarter with cash on hand of $2.4mn and total debt of $2.3mn, with its balance sheet benefitting from an equity offering in which INNV raised $3.8mn.
Tandon expects FlutiCare, a generic reformulation of Flonase nasal spray, to provide growth, calling its launch a key event to watch for 2018. . .FlutiCare™ is a fluticasone propionate nasal spray for allergic and non-allergic rhinitis (hay fever/stuffy nose), which Innovus has estimated represents more than a $1 billion market opportunity; it is the leading nasal steroid prescribed in the US, with 40mn units sold since 2014.
He reiterated that Innovus expects FlutiCare to generate $10-15mn in revenue in its first year of commercial operations following full US distribution. Key to this view is the broad distribution plans for Fluticare™. This includes distribution in over 20,000 U.S. retail stores, including Walgreens, CVS, Rite Aid, Kroger, Target, and Safeway. FlutiCare™ will also be sold in the company's Beyond Human Sales & Marketing Platform, which has access to ~3,000 newspapers and magazines reaching 20–30 million consumers per month, two million current subscribers, access to over 140 of its websites, online retailers and Amazon.
If management is able to meet its guidance in 2017 for $10mn to $15mn in revenue, the company could be looking at a breakout year in 2018 with the addition of $10mn–$15mn from FlutiCare™, stated Tandon.
Management also indicated that it is targeting cash flow breakeven by the end of the year, which would reduce additional dilution risk from share issuances. We are targeting $14.7mn in revenue for 2017E and $25mn for 2018E, respectively, noted Tandon.
SeeThruEquity has set a target price of $0.65 per share for Innovus. Shares are currently trading around $0.11.
We see Innovus as a high-risk / high-reward investment opportunity in the OTC pharmaceuticals space with a differentiated business model focused on men and women's health and vitality. We see several potential catalysts for the company over the next six to nine months stemming from its outlook for robust growth, and the upcoming launch of Fluticare™, which is now set for 4Q17, concluded Tandon.
Read what other experts are saying about:
Innovus Pharmaceuticals Inc.
Want to read more Life Sciences Report articles like this? Sign up for our free e-newsletter, and you'll learn when new interviews and articles have been published. To see recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
Disclosure: 1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She or members of her household own shares of the following companies mentioned in this article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are sponsors of Streetwise Reports: Innovus Pharmaceuticals Inc. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
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Additional Disclosures for this Content
Disclosures from SeeThruEquity, Innovus Pharmaceuticals Inc., Update, May 26, 2017
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