Nuvectra has announced the company’s financial results for the first quarter of 2016.
According to a press release, total revenue in the first quarter of 2016 was US$2.1 million, a 76% increase from US$1.2 million in the first quarter of 2015. The release states that this is due to a higher volume of component sales from the company’s NeuroNexus subsidiary and revenue related to the company’s partnership with Aleva Neurotherapeutics, which is focused on developing the company’s Algovita platform into a complete system for use in deep brain stimulation for the treatment of parkinson’s disease. The company initiated the US commercial launch of Algovita for the treatment of chronic pain of the trunk and/or limbs during the first quarter of 2016, and the first patient implants occurred in April 2016.
Gross profit in the first quarter of 2016 was US$1 million, or 49% gross margin, an increase from US$0.2 million, or 14% gross margin, in the first quarter of 2015. According to the release, this increase reflects a shift in mix toward higher margin products and services, as well as pricing improvements under the company’s supply agreement with Greatbatch for Algovita.
Scott Drees, chief executive officer for Nuvectra, says, “We completed several important milestones in the first quarter, highlighted by the commercial launch of Algovita in the United States.”
Drees adds, “During the quarter we completed our spin-off from Greatbatch with initial funding of US$75 million and an expansive intellectual property portfolio, we became a publicly traded company and we enhanced our balance sheet with a new credit facility.”
Operating expenses in the first quarter of 2016 were US$8.1 million, a 42% increase from US$5.7 million in the first quarter of 2015. The increase reflects investments in the company’s sales and marketing and research and development teams, along with higher headcount related to becoming a public company and the commercial launch of Algovita.
Net loss for the first quarter of 2016 was US$7.1 million, compared with net loss of US$5.5 million, for the first quarter of 2015. Total cash and cash equivalents were US$90.3 million as of April 1, 2016, compared to US$0.2 million as of January 1, 2016.
On March 14, 2016, the company completed a spin-off from Greatbatch, which included a cash capital contribution of US$75 million from Greatbatch. On March 18, 2016, the company entered into a loan agreement with Oxford Finance and Silicon Valley Bank consisting of a US$40 million term loan credit facility, from which US$15 million was funded at the closing of the agreement, and a US$5 million revolving line commitment.