Navidea Biopharmaceuticals, Inc. (NYSE MKT: NAVB), a biopharmaceutical company focused on precision diagnostic radiopharmaceuticals, today announced business highlights and consolidated results for the second quarter ended June 30, 2013. “The most significant event for Navidea this quarter was the launch of our first product, Lymphoseek ®. Our launch is off to a great start and we are advancing our innovative portfolio with the initiation of the Phase 3 study of NAV4694 in Alzheimer’s disease. During the second half of 2013, we expect to further enhance our long-term growth with additional value enhancing pipeline events,” said Dr. Mark Pykett, Navidea CEO. “We are tracking well in the initial weeks of launch and feel strongly that we have the right strategy to drive adoption. The commercialization plan we are executing with our partner is on target based on key measures of success: repeat and multiple dose ordering, adoption at top-tier medical institutions, formulary placement, excellent product performance, and high customer satisfaction,” added Dr. Pykett. “We are looking forward to the expected pass-through C code to further facilitate reimbursement starting in the fourth quarter.” With the objective of strengthening the existing label and as a result of a recent constructive meeting with the U.S. Food and Drug Administration (FDA), Navidea announced today that it is formally closing its Phase 3 clinical study in subjects with head and neck cancer. The Company plans to submit a supplemental New Drug Application (sNDA) later this year. The Company also continues to make progress related to Lymphoseek outside the U.S.; Navidea received positive Day 120 feedback on its Marketing Authorization Application from the European Medicines Agency and expects a positive opinion by year-end 2013. Second Quarter 2013 Financial Results For the quarter ended June 30, 2013, Navidea reported a net loss attributable to common stockholders of $10.3 million, or $0.09 per share, compared with a net loss attributable to common stockholders of $5.9 million, or $0.06 per share, for the same period in 2012. For the six months ended June 30, 2013, Navidea’s net loss attributable to common stockholders was $17.6 million, or $0.15 per share, compared to a net loss attributable to common stockholders of $12.9 million, or $0.14 per share, for the same period in 2012.
Revenue for the quarter ended June 30, 2013 was $195,000 compared with revenue of $60,000 for the same period in 2012. For the six months ended June 30, 2013, Navidea’s revenue was $195,000, compared to revenue of $72,000 for the same period in 2012. Revenue for the second quarter of 2013 consisted primarily of approximately $128,000 derived from the sale of Lymphoseek, including initial stocking of our partner’s radiopharmacies.Research and development (R&D) expenses were $4.4 million for the quarter ended June 30, 2013, compared to $2.5 million for the same period in 2012. The increase of $1.9 million was primarily a result of increased NAV4694 and NAV5001 product development costs, offset by decreased Lymphoseek and potential pipeline product development costs. R&D expenses were $8.0 million for the six months ended June 30, 2013, compared to $6.4 million for the same period in 2012. The increase of $1.6 million was primarily attributable to increased NAV4694 product development costs, offset by decreased Lymphoseek, NAV5001, RIGScan™, and potential pipeline development costs. Selling, general and administrative (SG&A) expenses were $4.2 million for the quarter ended June 30, 2013, compared to $3.0 million for the same period in 2012. The increase of $1.2 million was primarily a result of increased medical education and investor and public relations costs, offset by decreased out-of-pocket marketing costs, to support the commercial launch of Lymphoseek. SG&A expenses were $7.5 million for the six months ended June 30, 2013, compared to $5.5 million for the same period in 2012. The net SG&A increase of $2.0 million between the two periods was attributable to the same primary factors noted for the second quarter. Other expenses were $1.8 million for the quarter ended June 30, 2013, compared to $448,000 for the same period in 2012. Other expenses were $2.2 million for the six months ended June 30, 2013, compared to $931,000 or the same period in 2012. The net increases in other expenses between the quarter and year-to-date periods were related primarily to accounting charges classified as loss on extinguishment of debt related to the payoff of one note payable and the restructuring of another. The majority of these losses on extinguishment were non-cash in nature.
As of June 30, 2013, Navidea had cash and cash equivalents totaling approximately $25.6 million compared to $9.8 million in cash and cash equivalents as of March 31, 2013.“Meeting our goals for successful commercialization of Lymphoseek and advancing our pipeline remain our primary focus,” said Brent Larson, Navidea CFO. “During this initial quarter of launch, margins on Lymphoseek sales were negatively impacted by two primary factors: the high proportion of revenue derived from inventory-stocking at lower margins and costs related to certain post-production testing required by regulatory authorities. These testing activities are charged to cost of goods sold in the period they are incurred rather than recognized as inventory is sold. Gross margins are expected to increase as these charges diminish as a proportion of revenue in line with previous guidance. Additionally, we believe the recent closing of a $25 million debt financing with GE Capital, Healthcare Financial Services strengthens our financial position. We continue to maintain financial flexibility through access to available funding sources and expense control as we execute our business plan and support our pipeline.” Second Quarter 2013 and Recent Business Highlights Pipeline
- Navidea announced the commercial launch of Lymphoseek (technetium Tc 99m tilmanocept) Injection in May, with U.S. marketing partner, Cardinal Health.
- Researchers highlighted results from Lymphoseek clinical trials in 20 presentations and a sponsored lymphatic mapping symposium at the Joint International Oncology Congress, the Annual Meeting of the American Society of Clinical Oncology and the Annual Meeting of the Society of Nuclear Medicine and Molecular Imaging.
- Positive top-line results from an interim analysis of Lymphoseek Phase 3 clinical trial in head and neck cancer which met its primary endpoint in identification of sentinel lymph nodes against the pathology gold standard were reported.
- Navidea closed enrollment in the NEO3-06 study in head and neck cancers following a constructive FDA meeting and made plans to submit a sNDA based on the current interim data analysis.
- NAV4694 and NAV5001
- Navidea’s global Phase 3 trial of NAV4694 PET imaging agent was initiated with the first patient enrolled at the Southern Illinois University School of Medicine.
- AIBL, a leading Australian-based neurodegenerative disease and imaging research consortium, announced that it is converting to NAV4694 from gold-standard Pittsburgh Compound-B (PiB) for its comprehensive research initiative in Alzheimer’s disease (AD) and Mild Cognitive Impairment.
- Researchers from the McGill Centre for Studies in Aging, Douglas Research Institute, and Montreal Neurological Institute presented results at the annual Alzheimer's Association International Conference showing NAV4694 better differentiated amyloid deposition associated with AD in post-mortem brains than PiB.
- Navidea co-sponsored the 2013 Alzheimer’s Imaging Consortium in July which featured leading international experts including presentations by Drs. Gil Rabinovici, University of California, San Francisco and Christopher Rowe, Austin Health, Melbourne, Australia.
- Christopher Rowe et al published results in the Journal of Nuclear Medicine from a NAV4694 clinical trial demonstrating positive results from a head-to-head comparison of NAV4694 and β-Amyloid imaging gold standard PiB in AD and dementia. The study was conducted by collaborators at Austin Health in Melbourne, Australia.
- A manufacturing and supply agreement with Nordion, Inc. (Canada) was executed to produce and distribute supplies of 123I-labeled NAV5001 for late-phase clinical trials.
- A clinical study commenced to investigate the performance of NAV5001 in a SPECT imaging procedure of the brain in connection with Navidea’s program to evaluate NAV5001 in dementia with Lewy bodies.
- A $25 million debt financing transaction led by GE Capital, Healthcare Financial Services closed in June.
- An underwritten public offering of 2.1 million shares of common stock, resulting in net proceeds to the Company of approximately $4.8 million was completed in April.
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|NAVIDEA BIOPHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|June 30,||December 31,|
|Other current assets||3,089,281||1,498,819|
|Liabilities and stockholders' deficit:|
|Notes payable, net of discount, current||$||80,820||$||2,756,718|
|Other current liabilities||4,638,665||3,433,821|
|Notes payable, net of discount||27,225,620||6,930,112|
|Total liabilities and stockholders' deficit||$||31,118,268||$||11,972,397|
|NAVIDEA BIOPHARMACEUTICALS, INC.|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,||June 30,||June 30,|
|Grant and other revenue||67,456||60,000||67,456||71,931|
|Cost of goods sold||105,438||-||105,438||-|
|Research and development||4,376,833||2,476,113||8,016,590||6,419,827|
|Selling, general and administrative||4,169,437||2,970,837||7,533,927||5,545,467|
|Total operating expenses||8,546,270||5,446,950||15,550,517||11,965,294|
|Loss from operations||(8,456,431||)||(5,386,950||)||(15,460,678||)||(11,893,363||)|
|Loss on extinguishment of debt||(1,372,266||)||-||(1,372,266||)||-|
|Change in derivative liabilities||-||(92,805||)||-||(276,889||)|
|Other income (expense), net||(6,386||)||(33,662||)||19,924||(38,566||)|
|Preferred stock dividends||-||(25,000||)||-||(50,000||)|
|Loss attributable to common stockholders||$||(10,300,351||)||$||(5,859,822||)||$||(17,641,370||)||$||(12,873,894||)|
|Loss per common share (basic and diluted)||$||(0.09||)||$||(0.06||)||$||(0.15||)||$||(0.14||)|
|Weighted average shares outstanding|
|(basic and diluted)||118,260,288||94,664,659||116,024,366||94,368,690|