TORONTO, ON--(Marketwired - November 30, 2016) - Delivra Corp. (TSX VENTURE: DVA) ("Delivra" or the "Company") reported its financial results for the three and nine month periods ended September 30, 2016. All figures are reported in CDN dollars ($), unless otherwise indicated. Delivra's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").
Q3 2016 Highlights:
- Solidified the Company's position as having the #1 Selling Natural Pain Cream in Canada and the #1 Selling Nerve Pain Cream in Canada (adapted from Nielson data, April 2016);
- Completed a licensing agreement with Canopy Growth Corporation (TSX: CGC) for the transdermal delivery of medical cannabis;
- Q3-2016 generated revenues of $630,265, a 42% increase over Q3-2015. Pain and nerve sales are seasonal and historically the slowest during the third quarter of each year;
- Filed four permanent patents during the quarter, bringing the total number of patents pending to six and the total number of permanent patent filings to four;
- Secured an additional $495,000 of government funding relating to the U.S. market entry in the form of unsecured, interest-free loans;
- Received proceeds on interest-free government loans in the amount of $280,397, and after quarter end, an additional $653,518. Proceeds received were used for scientific research on certain transdermal products and U.S. market entry expenditures;
- Raised $2,020,900 through the issuance of convertible debentures on a non-brokered private placement;
- R&D development of the transdermal delivery potential of the very popular pain management drug, celecoxib;
- Starting in June and throughout Q3-2016, investment made in building brand awareness in the U.S.; and
- Subsequent to quarter end, the Company announced its successful pre-clinical work with the natural ingredient berberine for the prevention and treatment of cardiovascular disease related to high cholesterol and triglyceride levels.
"Our strategy of improving the safety and efficacy of existing drugs using Delivra's proprietary transdermal delivery technology platform continues to drive a portfolio of robust pharmaceutical and natural products in our pipeline. During the quarter, we successfully grew our LivRelief suite of products in Canada, while leveraging the value of our delivery system platform, including diabetes and innovative cannabis-based products. The completion of a licensing agreement with Canopy Growth Corporation, our second licensing agreement for the transdermal delivery of medical cannabis, addresses the growing demand for topical cannabis as a therapeutic option for a range of conditions. Through this collaboration, Delivra will offer consumers a unique product suite. We are excited at the opportunity of licensing these natural and Rx products globally," said Dr. Joseph Gabriele, CEO of Delivra Corp.
Results of Operations
Revenue for Q3-2016 was $630,265, a 42% increase compared to Q3-2015 of $444,866. Revenues for the first nine months of 2016 were $2,734,768, an increase of 32% compared to the same period in 2015 of $2,071,270. The main drivers of this growth for the first nine months of 2016 were:
- 34% increase in adjusted unit sales over the comparative period of the Company's pain products in Canada, including repeat purchases and new customer acquisitions resulting from the Company's on-going marketing and advertising efforts, and
- 54% increase in unit sales over the comparative period of the Company's Nerve Pain product in Canada.
This increase in nerve product sales is a result of a planned reallocation of marketing and advertising expenditures beginning in Q2-2016. The nerve product advertising represented an investment by the Company in the latent growth potential of the product, which the Company believes is underrepresented in the overall revenue mix by comparison to the flagship Pain product. While this may result in lower revenue in the short-term, versus the same advertising spending allocation to Pain product, it strengthens the brand, solidifies the leadership position of Nerve, diversifies the customer base, and provides a broader platform for continued forward growth.
Gross Profit for Q3-2016 was $406,919, a 45% increase compared to Q3-2015 of $280,032. This is a result of increased revenues and efficiencies in the production process during the year (65% in Q3-2016 versus 63% in Q3-2015). Gross Profit for the first nine months of 2016 was up 36% against the comparable prior period, at $1,864,363 versus $1,374,785 in the first nine months of 2015. Gross margin was 68% in the first nine months of 2016 versus 66% in the first nine months of 2015.
Operating expenses for Q3-2016 were $2,334,223, up from $1,026,681 in Q3-2015. Operating expenses for the first nine months of 2016 were $5,596,783, versus $2,803,483 in the first nine months of 2015. The increase was mainly a result of higher marketing and selling costs associated with successful growth and brand building investments in Canada and initial US test marketing costs. In Canada, in the first nine months of 2016, the Company spent approximately $200,000 more in television advertising, which generated an additional $489,578 in gross margins, compared to the prior period. Sales and marketing salaries increased approximately $110,000 during the year, as a result of diversification and growth initiatives into professional channels (eg. medical and clinical). Lastly, the Company spent approximately $2,125,000 on aggressive US brand building initiatives during the nine-month period. Although the Company will continue with these efforts, it will be on a less aggressive basis in Q4 2016 and 2017, as the Company continues to refine and develop strategies for the US market based on the knowledge gained from these efforts.
The net loss and comprehensive loss for Q3-2016 was $2,246,347 or $0.06 per share versus $772,541 or $0.02 per share for Q3-2015. The net loss and comprehensive loss for the first nine months of 2016 was $4,241,331 or $0.11 per share versus $1,494,435 in the first nine months of 2015 or 0.05. The increased loss occurred from the results of operations discussed above, primarily the investments made in core growth, US expansion, share-based compensation and public company G&A costs. In addition, the loss for the three and nine months includes $266,596 relating to the accretion expense on convertible debentures and fair value change in derivatives related to the convertible debentures.
ABOUT DELIVRA CORP.
Delivra Corp. ("Delivra" or the "Company") is a specialty biotechnology company that has a proprietary transdermal delivery system platform that can shuttle pharmaceutical and natural molecules, through the skin, in a targeted specific manner. Delivra manufactures and sells a growing line of natural topical creams with the proprietary transdermal delivery system platform under the LivRelief™ brand, for conditions such as joint and muscle pain, nerve pain, varicose veins, wound healing, and under the LivSport™ brand for sports performance. LivRelief™ products are available in pharmacies, grocery chains, and independent health food stores across Canada, and on-line at www.livrelief.com. LivRelief™ pain and nerve pain products are also available in the United States on Amazon and at www.livrelief.com/us. In parallel with its consumer products business, Delivra also has a mandate to license its patent-pending proprietary transdermal delivery technology platform to pharmaceutical companies globally, for the transdermal delivery of repurposing Rx molecules to treat a broad range of conditions, along with licensing its over-the-counter products globally. Delivra is headquartered in Burlington, Ontario and has a research and development laboratory in Charlottetown, PEI.
Further information on Delivra can be found at www.delivracorp.com, www.livrelief.com for Canada and www.livrelief.com/us for the United States.
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release. Certain information in this press release may constitute forward-looking information. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Corporation assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Additional information identifying risks and uncertainties is contained in the Corporation's filings with the Canadian securities regulators, which filings are available at www.sedar.com.