Where Does NovaBay Pharmaceuticals, Inc. (NYSEMKT: NBY) Have Its Focus This Year?


NovaBay Pharmaceuticals, Inc. (NYSEMKT: NBY) has set for itself many targets to hit before the end of 2016. But there is one that the management of the company has been talking about repeatedly: achieving positive cash flow.

Through a combination of sales improvement and expenses reduction, NovaBay Pharmaceuticals, Inc. (NYSEMKT:NBY) wants to achieve adjusted cash flow from operations by the end of this year. At the release of the 2Q2016 and 1H2016 results, the CEO Mark M. Sieczkarek talked about how far they have gone in pursuing that target.

According to Sieczkarek, NovaBay is still on track to achieving positive cash flow in 2016. Improving sales of Avenova and last year’s restructuring of the company are some of reasons the management is confident of attaining positive cash flow position.

The restructuring has helped NovaBay cut its cash burn by almost 50%.

Avenova sales potential

Avenova remains a key revenue driver at NovaBay Pharmaceuticals, Inc. (NYSEMKT: NBY). Sales of the product hit $2.6 million in 2Q2016, indicating an increase of 89% over the previous quarter and making it the largest contributor of product sales. NovaBay added that pharmacy sales of the product rose 201% and more than 1,100 new prescribers of the product were added in 2Q2016. Further, the number of medical professionals prescribing Avenova rose 12% in the latest quarter.

But sales opportunities of the product are still huge. CEO Sieczkarek told investors at the 2Q earnings call that he believes they have barely scratched the surface with regards to market opportunity for Avenova. NovaBay estimates that there are still about 41 million Americans who are eligible to use the product.

2Q2016 highlight for NovaBay Pharmaceuticals, Inc. (NYSEMKT: NBY)

NovaBay Pharmaceuticals, Inc. (NYSEMKT: NBY)’s net sales rose 164% YoY to $2.7 million in 2Q2016, with product revenue rising 185%. Product revenue include sales of NeutroPhase and Avenova.

NovaBay Pharmaceuticals, Inc. (NYSEMKT: NBY) reported that its gross profit improved to 82% from 75% a year earlier thanks largely to higher sales of Avenova. The 80% decrease in R&D costs, 35% decline in G&A expenses and 23% fall in sales and marketing expenses enabled NovaBay to significantly cut its net loss in the latest quarter. The company post EPS loss of $0.36, down from EPS loss of $1.84 a year ago.


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