The developmental pharmacological world is a game of paying forward. Pay now and reap later. There is very little option until approvals of the US FDA are gained. If, however, the US FDA gives approval, exceedingly large profits can be had.
NovaBay Pharmaceuticals Inc., a middle-stage developmental pharmaceuticals company, works to manufacture and market anti-infection products directed primarily (although not exclusively) at preventing infections within a hospital environment. The company works at the molecular level and has solid ties to larger operations that can offer financing and other marketing services.
Perhaps the most beneficial aspect that the company brings to the table is the variety of its base research. Its NVC-422 research offers modification for a variety of infectious issues. Among those currently being studied are sinus infections, eye infections and ear infections. Possibly the leading profit generator in regard is its adaptability for use as a contact lens fluid. With these applications, and products directed at acne care, one can easily understand why companies such as Alcon Manufacturing Co. and Galderma S.A. have been eager to develop licensing agreements for particular products within their product lines. In this area, the company has recently received a $3.7 million payment in agreement with Galderma as progress is made for a topical use product.
To assess the company’s balance sheet, one needs to understand the nature of a development stage pharmaceutical company. Quarterly financial numbers do not entirely reflect real world conditions. Up-front costs in the development and clinical trials, of these types of products, are high, which are reflected in reporting. As far as Nova is concerned, this is entirely the case. Quarterly numbers have been up and down as its latest product works through Phase II trials. With this in mind, quarterly number should be taken in stride as the company does have agreements in place to support development and longer-term profit.
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