On November 17, 2020 Pressure BioSciences, Inc. (OTCQB: PBIO) ("PBI" or the "Company"), a leader in the development and sale of broadly enabling, pressure-based instruments, consumables, services, and platform solutions to the worldwide life sciences and other industries, reported financial results for the third quarter ended September 30, 2020, provided a business update, and offered limited guidance for FY2021 (Press release, Pressure BioSciences, NOV 17, 2020, View Source [SID1234571292]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Mr. Richard T. Schumacher, President and CEO of PBI, commented: "We are delighted with the results of the third quarter 2020, particularly in the measurable progress made in three important areas: (i) key operational and technical projects (see highlight bullets below); (ii) revenue increases in our products and services offerings; and (iii) important restructuring improvements in the reduction of onerous, variable-rate convertible debt. As previously reported, the Company’s first and second quarter 2020 results were substantially impacted by business interruptions and/or distractions for PBI clients and prospects. However, third quarter 2020 results demonstrated a dramatic recovery, with Q3 total revenue exceeding the revenue of Q1 and Q2 2020 combined and topping all previous quarterly revenue results since Q4 2018. Similarly, instrument sales in Q3 2020 exceeded instrument sales in Q1 and Q2 2020 combined, and contracted services revenue for our Ultra Shear Technology ("UST") nanoemulsions and BaroFold biopharmaceutical protein refolding and recovery platforms in Q3 2020 also exceeded revenue for the same services in Q1 and Q2 2020 combined."
Mr. Schumacher continued: "We have been especially proud of our strong progress in the restructuring and reduction of onerous, variable-rate convertible debt and the consequential improvement in our investment grade profile. On December 31, 2019 we carried approximately $5.4 million of very expensive, variable-rate convertible debt on our books. We successfully reduced this onerous debt to approximately $1.7 million by Sept 30, 2020 through a combination of cash and conversion into PBIO common stock at a value of $2.50/share. We also carried about $1.1M in merchant cash advances ("MCAs") on December 31, 2019; MCA balances were reduced to $0 by September 30, 2020, primarily through a combination of cash, conversion of debt into stock at a value of $2.50/share, and warrant awards with a $3.50 exercise price. Cash for the debt paydowns and restructurings above was sourced from friendly, long-term investors who we anticipate, based on past performance, will likely convert their safer, less onerous fixed-rate loans into equity in the near future."
Recent Operational and Technical Highlights
Launch of our Revolutionary UST-Based System to Make High Quality, Stable, Water-Soluble Nanoemulsions
On target to launch our unique BaroShear K45 Nanoemulsification System by mid-2021
Novel, proprietary system designed to revolutionize the processing of immiscible liquids (like oils in water) into water-soluble, long-term stable, highly absorbable, innately bioavailable nanoemulsions
Resulting formulations could potentially have enormous success in many very large and rapidly growing markets, including high-value pharmaceuticals, cosmetics, nutraceuticals (such as CBD-infused products), liquid foods and beverages, as well as industrial products including inks, paints and lubricants
Announced receipt of purchase orders for twelve (12) BaroShear K45 nanoemulsification systems being manufactured for mid-2021 release
Completed build-out of our GMP-compliant manufacturing laboratory, an application development showcase for the BaroShear K45 and our industrial scale, high volume (2 liters/minute) UST-based nanoemulsification systems
Expansion of our Recently Launched BaroFold Contract Services Business
We entered into ongoing service agreements with two biopharma companies seeking to determine if our patented BaroFold platform could significantly impact and improve the quality of their early-stage protein therapeutics
We began discussions with potential CRO and CMO partners for the expansion of our BaroFold services
We continued to expand the PBIO contract services laboratory with additional specialized equipment and new methods/applications
Intellectual Property (Patents)
We were awarded the first U.S. patent for our revolutionary Ultra Shear Technology Platform.
We were awarded a pivotal U.S. patent for our best-selling, pressure-based consumable device, the PCT MicroPestle
Collaborations
We signed a worldwide, co-marketing alliance with Leica Microsystems (a Danaher company), integrating PBI’s Pressure Cycling Technology ("PCT") with their laser microdissection platform, prior to mass spec analyses. Leica and PBI believe that the combination of their proprietary technology platforms provides the potential to accelerate cancer R&D with an innovative and proprietary tumor processing workflow
Earlier this year, PBI and RedShiftBio demonstrated the potential of combining their proprietary technologies to enable a new tool for the development and production of biotherapeutics
Financial Results: Q3 2020 vs. Q3 2019 (rounded to nearest hundred except earnings per share)
Products and services revenues were $534,000 for the 2020 third quarter compared to $501,000 for the same quarter of 2019, a 7% increase. This increase was primarily attributable to increased sales of instruments, which totaled $312,700 in Q3 2020 compared to $185,800 in Q3 2019, an increase of 68%. Revenue from consumable products was $49,000 for the third quarter of 2020 compared to $112,000 for the same period in 2019, a 56% decrease. Contracted scientific services for BaroFold protein refolding applications and UST services provided revenue of $84,200 in Q3 2020, compared to $149,200 in Q3 2019, a decrease of 44%. These decreases in consumable product sales and scientific services were primarily attributable to the negative impact that the COVID-19 pandemic had on the operations of many of our customers.
Operating loss for Q3 2020 was $819,000 compared to $1,069,000 for the same period in 2019, a decrease in operating loss of 23%. This decrease was primarily due to lower investor relations services, stock-based compensation expenses, personnel costs, and marketing expenditures.
Loss per common share – basic and diluted– was $(1.02) for Q3 2020 compared to loss per common share of $(2.20) for the same period in 2019.
PBI’s Chairman of the Board, Mr. Jeffrey N. Peterson, offered an overview perspective: "The excitement of our early vision for PBI was based upon the anticipated broad potential of multiple, patented high-pressure technology platforms, now spanning the PCT platform for sample preparation, the BaroFold platform for protein refolding/recovery of biotherapeutics, and the UST platform for processing a new generation of extremely effective nanoemulsions. These unique and proprietary pressure-based platforms address numerous and diverse large market opportunities worldwide. The Company has successfully developed and poised these technologies for market readiness, rapid revenue growth, and a path to major revenue growth and profitability in 2021. We believe that the restructuring of PBI’s debt, already alleviating much of our onerous variable-rate convertible debt exposure, has dramatically repositioned the Company for new investment to eliminate the remaining onerous variable-rate debt, fund our UST platform inventory build for the twelve pre-orders already received for the new BaroShear K45 nanoemulsification system, and drive our conversion to profitability by late 2021."
Earnings Call
The Company will hold an Earnings Conference Call at 4:30 PM EDT on Tuesday, November 17, 2020. To attend this teleconference via telephone, Dial-in: (877) 407-8033 (North America), (201) 689-8033 (International). Verbal Passcode: PBIO Third Quarter 2020 Financial Results Call. Replay Number (877) 481-4010 (North America), (919) 882-2331 (International); Replay ID Number: 38901. Teleconference Replay Available for 30 days.