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Tuesday, 30 April 2013
Pivotal Therapeutics narrows losses on first sales of Vascazen as product build-up continues
Pivotal Therapeutics (OTCQX:PVTTF) (CNSX:PVO), a pharmaceutical company focused on Omega-3 therapies for cardiovascular disease, has unveiled its year-end results, narrowing its loss from a year earlier as sales increased and expenses were reduced.
For the 12 months that ended December 31, 2012, the company reported a loss of $3.6 million, or 5 cents per share, compared with a slightly bigger loss of $3.8 million, or 6 cents per share, in 2011.
It told investors on Monday that the decrease in loss resulted from an increase in sales, netted against a reduction in operating expenses.
“The company is pleased to report the realization of revenues in it’s first year of commercialization of VASCAZEN®,” said CEO and CFO, Eugene Bortoluzzi, in the statement.
“As the second prescription only Omega-3 to the market, VASCAZEN® has seen positive growth into the first quarter of 2013. We at Pivotal continue to expand our sales and marketing efforts to increase awareness of our products throughout the medical community.”
The company's product, Vascazen, is an FDA-regulated medical food product developed to lower cardiovascular health risks in Omega-3 deficient cardiac patients, including high triglycerides, or fatty substances in the blood that are associated with coronary disease.
The 90 percent-pure product, which was introduced in the U.S. in November 2011, provides those suffering from heart disease with levels of the most important Omega-3 fatty acids in fish oil – EPA and DHA – that the company says are ideal, and cannot be achieved just through simple changes in diet alone.
Eicosapentaenoic acid (EPA), which has strong anti-inflammatory properties, and docosahexaenoic acid (DHA) are found in cold water fish such as salmon, mackerel, halibut, sardines, tuna, and herring, but without enough fish, supplements are needed to fill the body’s needs.
The dual-listed company says its medical food product has carved out a niche, for the dietary management of patients with cardiovascular disease that are deficient in Omega-3 fatty acids - a much broader market than for Lovaza, the first prescription Omega-3 to market, after which Vascazen followed.
Lovaza, which is owned by GlaxoSmithKline, is indicated exclusively for the reduction of "very high" - 500 mg/DL- triglyceride levels in adults. For 2012, GlaxoSmithKline reported worldwide Lovaza sales of $1.4 billion, up from $876 million in 2011.
Vascazen, which avoided the lengthy FDA pre-approval process that is required with drugs, is available with a prescription in all major pharmacies throughout the U.S.
Currently, the company's sales reps are focused on the eastern seaboard in the U.S., which contains the highest prevalence of cardiovascular disease-related illness in the nation.
With plans to close a financing for some $5 million in proceeds, the company says it can build out its dedicated sales force to more than 35 people. Its sales reps are compensated “heavily on commission”, which Pivotal says drives sales and higher volumes.
At year-end, Pivotal's working capital position came out to $452,914, a drop from $1.9 million at the end of 2011 as the pharmaceutical company builds out its sales and marketing efforts.
In a recent research report, analyst Juan Noble of Taglich Brothers wrote that by 2017, he expects Pivotal's revenue should ramp up to around $61 million, with the company anticipated to be cash flow positive by late this year. Supported by FDA-approved material suppliers and contract manufacturers, as well as selling organizations, the company started U.S. distribution in the second quarter of 2012.
Quick growth is not unprecedented for the company. Pivotal was founded by veteran healthcare execs Dr. George Jackowski, Eugene Bortoluzzi and Rachelle MacSweeney in October 2010, with the team already able to finance the start of its commercialization plan for Vascazen in 2011.
This year, the company said it plans to advance the commercialization of its product even further in the U.S., including the expansion of the sales and marketing team, the initiation of new clinical trials, publication of existing scientific data, and the bolstering of its intellectual property portfolio and product offerings, among other goals.