EMERYVILLE, Calif.—NovaBay Pharmaceuticals (NYSE MKT: NBY) reported that sales nearly tripled to a record $3.4 million for the third quarter ending September 30, 2016. Product revenue, which includes sales of Avenova lid and lash cleaner and NeutroPhase wound healer, was $3.3 million, up 187 percent from $1.1 million for the third quarter of 2015 and up 23 percent from $2.7 million for the second quarter of 2016.

Total gross profit margin was 84 percent for the third quarter of 2016, compared with 78 percent for the prior-year period and 82 percent for the preceding quarter, with the increase mainly due to higher sales of Avenova and the recognition of revenue upon the termination of a collaborative agreement. The gross profit margin on Avenova sales increased to 88 percent, up from 85 percent in the preceding quarter, NovaBay said.

“This is an exceptional time at NovaBay as we achieved yet another quarter of record Avenova sales, growing 176 percent over the third quarter of 2015 and up 20 percent from the second quarter of 2016, and putting us on an estimated annualized run rate of $12 million,” said Mark M. Sieczkarek, NovaBay’s President and CEO. “Importantly, 68 percent of Avenova sales came from the higher-margin prescription ophthalmology channel. This is a 25 percent increase in prescription sales from the second quarter as we continue to execute on our channel strategy.”

NovaBay posted a $2.0 million operating loss for the third quarter, up 62 percent from $5.3 million for the third quarter of 2015 and 9 percent from $2.2 million for the second quarter of 2016. The company reported a net loss of $3.7 million compared with a net loss for the third quarter of 2015 of $5.2 million.

Net sales for the nine months ended September 30, 2016 were $7.8 million, up 185 percent from $2.7 million for the nine months ended September 30, 2015, with the increase primarily attributable to significantly higher sales of Avenova. Product revenue for the first nine months of 2016 increased 196 percent to $7.6 million. Gross profit margin was 79 percent for the first nine months of 2016, compared with 76 percent for the first nine months of 2015. Gross profit margin on Avenova sales was 85 percent for the nine months ended September 30, 2016.

Operating loss for the first nine months of 2016 narrowed by 41 percent to $8.8 million from $14.9 million for the comparable period in 2015. R&D expenses for the first nine months of 2016 declined 73 percent to $1.2 million from the prior-year period, and G&A expenses were relatively unchanged. Sales and marketing expenses for the nine months ended September 30, 2016 were $8.7 million, an increase of 19 percent from the prior-year period.

The net loss for the nine months ended September 30, 2016 was $11.5 million, compared with a net loss of $14.8 million for the nine months ended September 30, 2015.
NovaBay reported cash of $9.4 million as of September 30, 2016, compared with $2.4 million as of December 31, 2015.