via NewMediaWire -- Neovasc, Inc. ("Neovasc" or the "Company")
(NASDAQ, TSX: NVCN), today reported financial results for the
fourth quarter and fiscal year ended December 31, 2020.
Fourth Quarter Highlights
-
Generated revenue of $514,000 in the quarter and $1.96 million for
the full year as Reducer implants rebounded after declining due to
the COVID-19 pandemic.
-
In December, announced the completion of the first Neovasc Reducer™
(“Reducer”) implants in France.
-
Completed a registered direct share offering in December, which
raised $6.1 million gross proceeds.
-
Announced the publication of a peer-reviewed article in
EuroIntervention, which presented data from the ongoing Reducer-I
trial that supported the safety and efficacy of Reducer.
Subsequent to the Fourth quarter
-
Regained compliance with the minimum bid price requirement and the
minimum market value requirement under Nasdaq Listing Rules
-
Completed a registered direct offering in February 2021 which
raised approximately $72 million gross proceeds.
“Neovasc continued to advance
its efforts to commercialize the Reducer and further develop the
Tiara devices in the fourth quarter,” said Fred Colen, President
and Chief Executive Officer of Neovasc. “We are encouraged by the
results of the quarter despite the impact from COVID-19. We believe
there is clearly strong underlying demand for Reducer.”
Colen continued, “We continue to advance the CE
mark submission for Tiara TA in Europe, with the goal of securing a
regulatory decision in the first half of the year. We also continue
to make meaningful progress on our Tiara TF development program and
we are targeting a first-in-human implant in the second half of
2021. Finally, subsequent to the quarter, in February 2021, we took
an important step, raising $72 million gross proceeds to secure
Neovasc’s ability to execute on our strategies for the medium term.
We look forward to continuing our progress in 2021.”
Financial results for the fourth quarter
ended December 31, 2020Revenues decreased by 6% to
$1,957,362 for the year ended December 31, 2020, compared to
revenues of $2,092,032 for the same period in 2019 as elective
procedures, including the implantation of Reducer, were temporarily
suspended at many hospitals due to the impact of COVID-19.
The gross margin for the year ended December 31,
2020 was 77%, compared to 78% gross margin for the same period in
2019 as we continue to focus on the development of territories
where we sell the Reducer with a direct sales force.
Total expenses for the year ended December 31,
2020 were $36,679,551 compared to $31,680,676 for the same period
in 2019, representing an increase of $4,998,875 or 16%, principally
because of a $2,528,240 increase in legal costs related to
financings, as we completed five financings during 2020, a
$1,716,004 increase in share-based payments and a $1,130,794
increase in cash-based employee expenses as we hired a new COO and
other higher paid staff, while still reducing head count
overall.
Operating losses and comprehensive losses for
the year ended December 31, 2020 were $35,168,428 and $30,170,251,
respectively, or $1.72 basic and diluted loss per share, as
compared with $30,047,080 operating losses and $33,618,494
comprehensive losses, or $5.40 basic and diluted loss per share,
for the same period in 2019.
Conference Call and Webcast
informationNeovasc will be hosting a conference call and
audio webcast today at 4:30 pm ET to discuss these results.
Domestic:
1-877-407-9208International:
1-201-493-6784
Parties wishing to access the call via webcast
should use the link in the Investors section of the Neovasc website
at https://www.neovasc.com/investors/. A replay of the
webcast will be available approximately 30 minutes after the
conclusion of the call.
About Neovasc Inc.Neovasc is a
specialty medical device company that develops, manufactures and
markets products for the rapidly growing cardiovascular
marketplace. The Company is a leader in the development of
minimally invasive transcatheter mitral valve replacement
technologies, and minimally invasive devices for the treatment of
refractory angina. Its products include the Neovasc Reducer™, for
the treatment of refractory angina, which is not currently
commercially available in the United States (2 U.S. patients have
been treated under Compassionate Use) and has been commercially
available in Europe since 2015, and Tiara™, for the transcatheter
treatment of mitral valve disease, which is currently under
clinical investigation in the United States, Canada, Israel and
Europe. For more information, visit: www.neovasc.com.
NEOVASC INC.
Consolidated Statements of Financial Position
As at December 31,(Expressed in U.S.
dollars)
|
2020 |
2019 |
2018 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$
12,935,860 |
$ 5,292,833 |
$ 9,242,809 |
Accounts receivable |
|
987,057 |
715,696 |
647,143 |
Finance lease receivable |
|
95,849 |
86,764 |
- |
Inventory |
|
839,472 |
618,650 |
318,135 |
Research and development supplies |
|
167,378 |
671,845 |
1,274,653 |
Prepaid expenses and other assets |
|
705,471 |
630,042 |
591,236 |
Total current assets |
|
15,731,087 |
8,015,830 |
12,073,976 |
|
|
|
|
|
Non-current assets |
|
|
|
|
Restricted cash |
|
470,460 |
462,874 |
439,736 |
Right-of-use asset |
|
830,551 |
720,473 |
- |
Finance lease receivable |
|
42,841 |
138,690 |
- |
Property and equipment |
|
803,280 |
767,973 |
813,628 |
Total non-current assets |
|
2,147,132 |
2,090,010 |
1,253,364 |
|
|
|
|
|
Total
assets |
|
$
17,878,219 |
$ 10,105,840 |
$ 13,327,340 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
$
7,243,500 |
$ 7,794,456 |
$ 4,610,560 |
Lease liabilities |
|
342,910 |
436,352 |
- |
2017 Convertible notes |
|
- |
5,400,189 |
1,423,224 |
2019 Convertible notes |
|
38,633 |
1,090,561 |
- |
2020 Convertible notes |
|
37,525 |
- |
- |
Total current liabilities |
|
7,662,568 |
14,721,558 |
6,033,784 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
- |
1,186,601 |
2,241,979 |
Lease liabilities |
|
596,881 |
468,527 |
- |
2017 Convertible notes |
|
- |
- |
13,194,112 |
2017 Derivative warrant liability |
|
- |
- |
190,303 |
2019 Convertible notes |
|
6,156,724 |
8,174,919 |
- |
2020 Convertible notes and warrants and derivative warrant
liabilities |
|
1,484,529 |
- |
- |
Total
non-current liabilities |
|
8,238,134 |
9,830,047 |
15,626,394 |
|
|
|
|
|
Total
liabilities |
|
$
15,900,702 |
$ 24,551,605 |
$ 21,660,178 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
|
$ 369,775,383 |
$ 328,460,681 |
$ 304,460,533 |
Contributed surplus |
|
35,045,056 |
29,766,225 |
26,260,806 |
Accumulated other comprehensive loss |
|
(7,615,717) |
(6,140,507) |
(7,653,028) |
Deficit |
|
(395,227,205) |
(366,532,164) |
(331,401,149) |
Total equity |
|
1,977,517 |
(14,445,765) |
(8,332,838) |
|
|
|
|
|
Total
liabilities and equity |
|
$
17,878,219 |
$ 10,105,840 |
$ 13,327,340 |
NEOVASC INC.
Consolidated Statements of Loss and Comprehensive
Loss
For the years ended December 31,
(Expressed in U.S.
dollars)
|
|
2020 |
2019 |
2018 |
|
|
|
|
|
REVENUE |
|
$
1,957,362 |
$ 2,092,032 |
$ 1,749,133 |
COST OF GOODS SOLD |
|
446,239 |
458,436 |
366,258 |
GROSS PROFIT |
|
1,511,123 |
1,633,596 |
1,382,875 |
|
|
|
|
|
EXPENSES |
|
|
|
|
Selling expenses |
|
2,196,803 |
1,645,985 |
1,353,165 |
General and administrative expenses |
|
14,081,153 |
10,013,732 |
16,438,936 |
Product development and clinical trials expenses |
|
20,401,595 |
20,020,959 |
16,001,464 |
TOTAL EXPENSES |
|
36,679,551 |
31,680,676 |
33,793,565 |
|
|
|
|
|
OPERATING LOSS |
|
(35,168,428) |
(30,047,080) |
(32,410,690) |
|
|
|
|
|
OTHER (EXPENSE)/ INCOME |
|
|
|
|
Interest and other income |
|
1,394,035 |
184,912 |
183,065 |
Interest and prepayment penalty expense |
|
(1,035,957) |
(133,082) |
- |
Impairment on right-of-use asset |
|
- |
(104,544) |
- |
Gain on sale of asset |
|
- |
- |
238,907 |
Loss on foreign exchange |
|
(256,585) |
(74,209) |
(175,054) |
Unrealized gain/(loss) on warrants, derivative liability |
|
|
|
|
warrants and convertible notes |
|
8,528,255 |
(3,235,591) |
(814,827) |
Realized gain/(loss) on exercise or conversion of warrants, |
|
|
|
|
derivative liability warrants and convertible notes |
|
814,083 |
(1,692,628) |
(28,003,594) |
Amortization of deferred loss |
|
(3,494,501) |
- |
(46,894,189) |
TOTAL OTHER (EXPENSE)/ INCOME |
|
5,949,330 |
(5,055,142) |
(75,465,692) |
LOSS BEFORE TAX |
|
(29,219,098) |
(35,102,222) |
(107,876,382) |
|
|
|
|
|
Tax recovery/(expense) |
|
524,057 |
(28,793) |
(107,093) |
LOSS FOR THE YEAR |
|
$ (28,695,041) |
$ (35,131,015) |
$ (107,983,475) |
|
|
|
|
|
OTHER
COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR |
|
|
|
|
Fair market
value changes in convertible notes due to changes in own credit
risk |
|
(1,475,210) |
1,512,521 |
(1,009,592) |
|
|
(1,475,210) |
1,512,521 |
(1,009,592) |
LOSS AND OTHER COMPREHENSIVE LOSS FOR THE
YEAR |
|
$ (30,170,251) |
$ (33,618,494) |
$ (108,993,067) |
|
|
|
|
|
LOSS PER SHARE |
|
|
|
|
Basic and diluted loss per share |
|
$
(1.72) |
$
(5.40) |
$
(76.26) |
|
|
|
|
|
InvestorsMike CavanaughWestwicke/ICR Phone:
+1.646.877.9641Mike.Cavanaugh@westwicke.com
MediaSean LeousWestwicke/ICR Phone:
+1.646.677.1839Sean.Leous@icrinc.com
Forward-Looking Statement DisclaimerCertain
statements in this news release contain forward-looking statements
within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995 and applicable Canadian securities laws that may not be
based on historical fact. When used herein, the words
"expect", "anticipate", "estimate", "may", "will", "should",
"intend," "believe", and similar expressions, are intended to
identify forward-looking statements. Forward-looking
statements may involve, but are not limited to, expectations as to
the future growth of the Company, the expansion of its product
range and the growing cardiovascular marketplace. Forward-looking
statements are based on estimates and assumptions made by the
Company in light of its experience and its perception of historical
trends, current conditions and expected future developments, as
well as other factors that the Company believes are appropriate in
the circumstances. Many factors could cause the Company's
actual results, performance or achievements to differ materially
from those expressed or implied by the forward-looking statements,
including those described in the "Risk Factors" section of the
Company's Annual Report on Form 20-F and in the Management's
Discussion and Analysis for the three and six months ended June 30,
2019 (copies of which may be obtained at www.sedar.com or
www.sec.gov). These factors should be considered carefully,
and readers should not place undue reliance on the Company's
forward-looking statements. The Company has no intention and
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
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