On November 7, 2017 Navidea Biopharmaceuticals, Inc. (NYSE MKT: NAVB) ("Navidea" or the "Company"), a company focused on the development of precision immunodiagnostic agents and immunotherapeutics, reported its financial results for the third quarter of 2017 (Press release, Navidea Biopharmaceuticals, NOV 7, 2017, View Source [SID1234521683]). Navidea reported total revenues for the quarter of $224,000. Net loss attributable to common stockholders was $1.5 million. Net revenues do not include the guaranteed payments from Cardinal Health 414, LLC ("Cardinal Health 414") because those are represented on the balance sheet in accounts receivable and were already included in the gain on sale of the line of business sold to Cardinal Health 414 for the nine months ended September 30, 2017.
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"We’ve made significant advancements in our pipeline, both on the diagnostic and therapeutics side so far this year. Efforts undertaken since the closing of the Cardinal Health 414 transaction to implement the new strategy have enabled the more rapid development of our proprietary technology. We have demonstrated significant market expansion potential with our imaging agent. We are actively pursuing an approval to utilize our activated macrophage technology as a biomarker. We have formally contacted the U.S. Food and Drug Administration ("FDA") and have scheduled our first meeting with them. In parallel, we are also pursuing an additional approval for our agent so we can administer it intravenously ("IV"). The FDA and many major pharmaceutical companies have indicated their significant interest in developing biomarkers that can assist in developing new therapeutics and in enabling objective monitoring of performance of existing therapies. With our best-in-class activated macrophage targeting system, we have been able to generate significant human imaging data and promising animal data with our therapeutic agents, reinforcing our optimism that this platform holds potential for the diagnosis and treatment of diseases in which macrophages play an important role," said Michael Goldberg, M.D., Navidea’s President and Chief Executive Officer.
Dr. Goldberg continued, "On the diagnostic side, we have generated data with both IV and subcutaneous formulations of Tc99m tilmanocept in rheumatoid arthritis ("RA"). We have completed all but a few of the control dosings in the Phase 1/2 dose escalation registrational study and expect to finalize the report on this study in the fourth quarter of this year. In nonalcoholic steatohepatitis ("NASH") and cardiovascular ("CV") disease, we will also be initiating dosing of an IV formulation shortly. For CV, we are working with the same team at Massachusetts General Hospital in Boston, who designed, managed and published the subcutaneous CV study that has attracted so much interest. In the IV study, we will also explore the ability to image central nervous system inflammation. With Kettering Medical Center in Ohio, we will shortly be dosing in NASH patients. On the therapeutic side, we have synthesized and tested delivery backbones that are one-tenth the size of the existing agents. As we explore formulation opportunities with our therapeutics, smaller agents provide better opportunities for creating therapeutics than can be delivered orally and topically. The newer agents retain the same very high binding we have achieved with our larger constructs. Finally, we have dosed in cancer models our MT1000 class of therapeutics, much more frequently (twice per day as opposed to twice per week) with the same total dose and as expected this resulted in much improved activity. "
Third Quarter 2017 Highlights and Subsequent Events
Executed a letter of intent for a sublicensing contract for worldwide research and development results with Cerveau Technologies, Inc. ("Cerveau") for using NAV4694, a beta-amyloid imaging agent being evaluated as an aid in the differential diagnosis of early-onset Alzheimer’s disease
Executed a letter of intent for an exclusive license with Cerveau for the development and commercialization of NAV4694 in Australia, Canada, China, and Singapore
Presented a late-breaking poster presented at the American College of Rheumatology Annual Meeting detailing the results of an IV-administered study in RA patients
Initiated series of regular investor-focused Q&A conference calls to improve Investor Relations strategy
IV-administration RA trial to complete enrollment in fourth quarter 2017
Launched NASH imaging study launch this quarter at Kettering Medical Center in Ohio
Initiate dosing in Phase 1/2 clinical imaging study in Kaposi’s Sarcoma
Financial Results
Our consolidated balance sheets and statements of operations have been reclassified, as required by current accounting standards, for all periods presented to reflect the line of business sold to Cardinal Health 414 as a discontinued operation. Accordingly, this discussion focuses on describing results of our operations as if we had not operated the discontinued operation during the periods being disclosed.
We recorded a $86.7 million net gain on the line of business sold to Cardinal Health 414 for the nine months ended September 30, 2017, including $16.5 million in guaranteed consideration, which was discounted to the present value of future cash flows. The proceeds were offset by $3.3 million in estimated fair value of warrants issued to Cardinal Health 414, $2.0 million in legal and other fees related to the sale, $800,000 in net balance sheet dispositions and write-offs, and $6.5 million in estimated taxes.
Total revenues for the third quarter of 2017 were $224,000, compared to $1.8 million in the third quarter of 2016. These revenues are grant-related and do not include the $1.7 million of payments received from Cardinal Health 414.
Research and development expenses for the third quarter of 2017 were $875,000, compared to $919,000 in the third quarter of 2016. The net decrease was primarily a result of decreases in net compensation costs coupled with decreased NAV4694 and NAV5001 development costs, offset by increases in Manocept development costs.
Selling, general and administrative expenses for the third quarter of 2017 were $1.7 million, compared to $1.8 million in the third quarter of 2016. The net decrease was primarily due to decreases in general support costs such as rent and depreciation, coupled with decreased net compensation costs, offset by net increased legal and professional services.
Navidea’s net loss attributable to common stockholders for the quarter ended September 30, 2017 was $1.5 million, or a $0.01 loss per share (basic), compared to a net loss of $59,000, or a $0.00 loss per share, for the same period in 2016.
Navidea ended the quarter with $6.6 million in cash and investments, not including the quarterly guaranteed earnout payment of $1.7 million from Cardinal Health 414 which was received after the quarter ended.
Conference Call Details
Investors and the public are invited to access the live audio webcast through the link below. Participants who would like to ask questions during the question and answer session must participate by telephone. Participants are encouraged to log-in and/or dial-in fifteen minutes before the conference call begins.
Event: Q3 2017 Earnings and Business Update Conference Call
Date: Wednesday, November 8, 2017
Time: 8:30 am (Eastern Time)
U.S. & Canada Dial-in: 1-866-548-4713 (toll free)
Conference ID: 6714834
Webcast
http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=5121
A live audio webcast of the conference call will also be available on the investor relations page of Navidea’s corporate website at www.navidea.com. In addition, the recorded conference call can be replayed and will be available for 90 days following the call on Navidea’s website.