Novus Therapeutics reports $8.2M net loss in Q1 2020

May 15, 2020 Off By BusinessWire

The company reported a net loss of $8.2 million, or $0.47 per share, for the three months ended March 31, 2020, compared to a net loss of $4.9 million, or $0.52 per share, for the same period in 2019. The company had $11.8 million in cash and cash equivalents as of March 31, 2020.

IRVINE, Calif.–(BUSINESS WIRE)–$NVUS #otitismedia–Novus Therapeutics, Inc. (NASDAQ: NVUS), a specialty pharmaceutical company focused on developing products for patients with disorders of the ear, nose, and throat, today announced financial results for the quarter ended March 31, 2020.

Operational Highlights

Raised gross proceeds of approximately $5.8 million through the exercise of outstanding warrants in January 2020
Completed enrollment of OP0201 phase 2a clinical trial in acute otitis media (study C-006) in March 2020

Upcoming Milestones

Topline results of OP0201 phase 2a clinical trial in acute otitis media (study C-006) are expected in early June 2020

“During the quarter, we accomplished two key objectives of extending our cash runway and completing enrollment of study C-006, our exploratory phase 2a clinical trial of OP0201 in infants and children with acute otitis media,” said Gregory J. Flesher, CEO of Novus Therapeutics, Inc. “We now have cash through year-end 2020 and all patients have subsequently completed the trial. We look forward to sharing the topline result of study C-006 in the coming weeks,” concluded Flesher.

Financial Results for the Three Months Ended March 31, 2020

Research and development (R&D) expenses were $1.6 million for the three months ended March 31, 2020, compared to $3.0 million for the same period in 2019. The decrease in R&D expenses were primarily attributed to reductions of $806,000 in clinical, $706,000 in CMC, $46,000 in travel and meeting expenses, and $3,000 in miscellaneous operating costs. The decrease was partially offset by increases of $17,000 in personnel costs, $85,000 in consulting costs, and $118,000 in stock-based compensation.

General and administrative (G&A) expenses were $1.7 million for the three months ended March 31, 2020, compared to $1.9 million for the same period in 2019. The decrease in G&A expenses were primarily attributed to reductions of $257,000 in public company costs, $107,000 in litigation costs, $20,000 in general operating costs, and $15,000 in travel and meeting expenses. The decrease was partially offset by increases of $136,000 in personnel costs and $107,000 in stock-based compensation.

During the quarter, the Company recognized a non-operating non-cash warrant inducement expense of $4.8 million.

About Study C-006

Study C-006 is a phase 2a, single center, double-blind, randomized, placebo-controlled, parallel group clinical trial to assess the safety, tolerability, and efficacy of 20 mg per day intranasal OP0201 as an adjunct therapy to oral antibiotic in the treatment of acute otitis media in infants and children aged 6 to 24 months. Subjects were treated twice-daily for 10 days and followed for up to 20 additional days after treatment has been completed (up to 30-days in total). The study was designed to detect a 25% treatment effect over placebo in at least one of the two primary efficacy endpoints. The primary efficacy endpoints include resolution of bulging tympanic membrane 4-6 days after initiation of treatment (visit 2) and resolution of middle ear effusion 12-14 days after initiation of treatment (visit 3). Please see clinicaltrials.gov for additional information (identifier NCT03818815).

NOVUS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

	March 31,			December 31,
	2020			2019
	(Unaudited)
ASSETS
Current assets:
Cash	$	11,785		$	8,791
Prepaid expenses and other current assets		1,088			1,180
Total current assets		12,873			9,971
Property and equipment, net		3			5
Operating lease asset, net		272			316
Other assets		572			639
Total assets	$	13,720		$	10,931
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	741		$	329
Current operating lease liability		184			180
Accrued expenses and other liabilities		953			813
Total current liabilities		1,878			1,322
Non-current operating lease liability		97			144
Total liabilities		1,975			1,466
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized at March 31, 2020 and December 31, 2019; 3,796 and 0 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		—			—
Common stock, $0.001 par value, 200,000,000 shares authorized at March 31, 2020 and December 31, 2019; 16,069,562 and 12,967,338 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		16			13
Additional paid-in capital		77,488			67,034
Accumulated deficit		(65,759	)		(57,582	)
Total stockholders’ equity		11,745			9,465
Total liabilities and stockholders’ equity	$	13,720		$	10,931

NOVUS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)

	For the Three Months
	Ended March 31,
	2020			2019
Operating expenses
Research and development	$	1,648		$	2,989
General and administrative		1,730			1,886
Total operating expenses		3,378			4,875
Loss from operations		(3,378	)		(4,875	)
Other income (expense), net		30			(6	)
Warrant inducement expense		(4,829	)		—
Net loss and comprehensive loss	$	(8,177	)	$	(4,881	)
Net loss per share, basic and diluted	$	(0.47	)	$	(0.52	)
Weighted-average common shares outstanding, basic and diluted		17,267,123			9,427,073