Vancouver, British Columbia and Minneapolis, Minnesota--(Newsfile Corp. - November 10, 2022) - Neovasc Inc. (NASDAQ: NVCN) (TSX: NVCN) ("Neovasc" or the "Company") today reported financial results for the third quarter ended September 30, 2022.
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Recent Highlights
Generated revenues of $923,000, a quarterly record and a year-over-year increase of 31% compared to the third quarter of 2021.
Accelerating acceptance of Reducer in the UK and French markets, with France the largest volume market in the quarter.
Continued enrollment in the COSIRA II pivotal trial, with enrollment expected to be complete in the first half of 2024 and initial data readout in the second half of 2024.
In July 2022, the Company received approval to expand the scope of the COSIRA II trial with a registry to include patients suffering from angina with non-obstructed coronary artery disease, so-called ANOCA patients.
Released preliminary data at the Transcatheter Cardiovascular Therapeutics conference in September, showing the Reducer's benefits to ANOCA patients.
Received US outpatient reimbursement by CMS for the Reducer Therapy, effective January 1, 2023.
"I am pleased to report on the tremendous progress the Neovasc team has made in the third quarter towards advancing our value creation strategies, despite a COVID surge that impacted procedure volumes and currency exchange fluctuations that impacted revenues in the quarter," said Fred Colen, President and Chief Executive Officer. "Despite these headwinds, Neovasc nevertheless achieved another quarter of record revenues as we continue to benefit from the successes in getting the Reducer reimbursed in the UK, France, and in the US as part of the COSIRA II trial. We now have adequate coding, coverage and payment to support full reimbursement for the Reducer, in the CMS population, for both inpatient and outpatient procedures (effective January 1, 2023), both during the COSIRA-II Clinical Trial, and upon potential commercialization in the United States. Additionally, we have developed the new ICD-10 diagnosis code that became effective October 1, that established "refractory angina" as a condition distinct from other, less severe, forms of angina. Furthermore, we continue to provide leading clinical data, this time demonstrating benefits of the Reducer therapy in yet another refractory angina patient population, currently without good treatment options; in September 2022, we announced preliminary data supporting the benefits of the Reducer therapy to patients with angina and non-obstructive coronary artery disease, so-called ANOCA patients. I look forward to sharing further exciting updates in future quarters."
Financial Results for the Third Quarter Ended September 30, 2022
Revenues increased by 31% to $923,000 for the three months ended September 30, 2022, compared to revenues of $703,000 for the same period in 2021. The overall gross margin for the three months ended September 30, 2022 was 76%, compared to 77% gross margin for the same period in 2021.
Total expenses for the three months ended September 30, 2022 were approximately $7.4 million compared to approximately $7.3 million for the third quarter of 2021, representing an increase of approximately $181,000 or 2%, substantially due to an increase in employee expenses as we accrued for a portion of annual bonuses that were previously not accrued, but were incurred, in the prior period and an increase in other operating expenses related to the COSIRA-II study, offset by a decrease in non-cash share-based payments, a decrease in director and officer insurance expenses and a decrease in litigation expenses.
Operating losses and comprehensive losses for the three months ended September 30, 2022 were $6.7 million and $8.2 million respectively, or $3.00 basic and diluted loss per share, as compared with $6.7 million operating losses and $6.9 million comprehensive loss, or $2.79 basic and diluted loss per share, for the same period in 2021. The increase of $16,000 in operating losses can be explained by a $181,000 increase in operating expenses offset by a $165,000 increase in gross profit.
As of September 30, 2022, the company had $31.3 million in cash and cash equivalents.
As of November 8, 2022, subsequent to the effect of the share consolidations, the Company had 2,746,625 common shares ("Common Shares") issued and outstanding.
Conference Call and Webcast Information
Interested parties may access the conference call by dialing (800) 458-4121 or (856) 344-9290 (International) and reference Conference ID 7304031. Participants wishing to join the call via webcast should use the link posted on the investor relations section of the Neovasc website at neovasc.com/investors/. A replay of the webcast will be available approximately 30 minutes after the conclusion of the call using the link on the Neovasc website.
About Neovasc Inc.
Neovasc is a specialty medical device company that develops, manufactures, and markets products for the rapidly growing cardiovascular marketplace. Its products include Neovasc Reducer™, for the treatment of refractory angina, which is under clinical investigation in the United States and has been commercially available in Europe since 2015, and Tiara™, a product under clinical investigation for the transcatheter treatment of mitral valve disease. The Company remains committed to the ongoing follow-up of patients in Tiara clinical trials and has paused all other Tiara activities. For more information, visit: www.neovasc.com.
NEOVASC INC.
Unaudited Condensed Interim Consolidated Statements of Financial Position
(Expressed in U.S. dollars)
| September 30, 2022 | December 31, 2021 | | ||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 31,254,368 | $ | 51,537,367 | ||
| Accounts receivable | 1,689,596 | 1,369,455 | ||||
| Finance lease receivable | - | 43,543 | ||||
| Inventory | 1,285,263 | 1,480,077 | ||||
| Prepaid expenses and other assets | 368,766 | 787,734 | ||||
| Total current assets | 34,597,993 | 55,218,176 | ||||
| Non-current assets | ||||||
| Restricted cash | 436,498 | 469,808 | ||||
| Right-of-use asset | 333,708 | 456,339 | ||||
| Property and equipment | 181,219 | 182,041 | ||||
| Deferred loss on 2020 derivative warrant liabilities | 1,598,357 | 4,300,484 | ||||
| Deferred loss on 2021 derivative warrant liabilities | 7,428,944 | 9,898,475 | ||||
| Total non-current assets | 9,978,726 | 15,307,147 | ||||
| Total assets | $ | 44,576,719 | $ | 70,525,323 | ||
| LIABILITIES AND EQUITY | ||||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 3,739,429 | $ | 4,629,163 | ||
| Lease liabilities | 224,195 | 273,145 | ||||
| 2019 Convertible notes | - | 38,633 | ||||
| 2020 Convertible notes | - | 40,587 | ||||
| 2022 Convertible notes | 135,863 | |||||
| Total current liabilities | 4,099,487 | 4,981,528 | ||||
| Non-Current Liabilities | ||||||
| Lease liabilities | 200,725 | 272,652 | ||||
| 2019 Convertible notes | - | 6,548,796 | ||||
| 2020 Convertible notes, warrants and derivative warrant liabilities | 126,355 | 6,088,728 | ||||
| 2021 Derivative warrant liabilities | 57,609 | 405,508 | ||||
| 2022 Convertible notes | 12,029,305 | - | ||||
| Total non-current liabilities | 12,413,994 | 13,315,684 | ||||
| Total liabilities | $ | 16,513,481 | $ | 18,297,212 | ||
| Equity | ||||||
| Share capital | $ | 441,153,987 | $ | 439,873,457 | ||
| Contributed surplus | 42,491,190 | 40,355,952 | ||||
| Accumulated other comprehensive loss | (6,229,804 | ) | (7,885,024 | ) | ||
| Deficit | (449,352,135 | ) | (420,116,274 | ) | ||
| Total equity | 28,063,238 | 52,228,111 | ||||
| Total liabilities and equity | $ | 44,576,719 | $ | 70,525,323 | ||
NEOVASC INC.
Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the three and nine months ended September 30, 2022 and 2021
(Expressed in U.S. dollars)
| For the Three Months Ended September 30 | For the Nine Months Ended September 30 | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| REVENUE | $ | 923,311 | $ | 703,420 | $ | 2,352,118 | $ | 1,788,282 | ||||
| COST OF GOODS SOLD | 220,030 | 164,843 | 514,249 | 346,342 | | |||||||
| GROSS PROFIT | 703,281 | 538,577 | 1,837,869 | 1,441,940 | ||||||||
| EXPENSES | ||||||||||||
| Selling expenses | 1,062,454 | 786,366 | 3,276,625 | 2,257,157 | ||||||||
| General and administrative expenses | 2,336,874 | 2,999,003 | 8,477,598 | 13,334,376 | ||||||||
| Product development and clinical trials expenses | 4,044,443 | 3,477,884 | 11,655,659 | 11,840,199 | ||||||||
| 7,443,771 | 7,263,253 | 23,409,882 | 27,431,732 | |||||||||
| OPERATING LOSS | (6,740,490 | ) | (6,724,676 | ) | (21,572,013 | ) | (25,989,792 | ) | ||||
| OTHER (EXPENSE)/INCOME | ||||||||||||
| Interest and other income | 105,412 | 507,775 | 175,030 | 557,529 | ||||||||
| Interest and other expense | (427,207 | ) | (33,551 | ) | (1,166,472 | ) | (352,114 | ) | ||||
| Loss on foreign exchange | (106,316 | ) | (8,162 | ) | (116,124 | ) | (28,400 | ) | ||||
| Unrealized (loss)/gain on warrants, derivative liability warrants and convertible notes | (28,624 | ) | 1,738,258 | 433,014 | 16,997,651 | |||||||
| Realized loss on exercise or conversion and extinguishment | ||||||||||||
| of warrants, derivative liability warrants and convertible notes | - | (223,747 | ) | (1,845,822 | ) | (2,119,091 | ) | |||||
| Amortization of deferred loss | (1,029,470 | ) | (2,791,494 | ) | (3,271,316 | ) | (7,817,937 | ) | ||||
| (1,486,205 | ) | (810,921 | ) | (5,791,690 | ) | 7,237,638 | | |||||
| LOSS BEFORE TAX | (8,226,695 | ) | (7,535,597 | ) | (27,363,703 | ) | (18,752,154 | ) | ||||
| Tax recovery | - | - | - | |||||||||
