- Focused on developing and commercializing high-quality products
- Pipeline includes several commercial products in ophthalmology and transplant
- Also has a development stage pipeline in neurology
What Aequus Pharmaceuticals does:
Aequus Pharmaceuticals Inc (CVE:AQS) (OTCQB:AQSZF) is a specialty pharmaceutical company focused on developing and commercializing high quality, differentiated products.
The Vancouver-based company takes medications that are already available in the US or elsewhere and licenses or acquires the Canadian rights, then takes the clinical data that supported that approval and works with Health Canada, Canada’s national health system, to get them approved and commercialized in Canada.
Aequus intends to commercialize its internal programs in Canada alongside its current portfolio of marketed established medicines and looks to form strategic partnerships that would maximize the reach of its product candidates worldwide.
The company has expanded its pipeline to include several commercial products in Opthalmology and transplant and also has a development stage pipeline in neurology with the goal of addressing a need for improved medication adherence through enhanced delivery systems.
In Ophthamology, the company has launched Vistitan, which reduces the pressure inside the eyes of patients with glaucoma and was first marketed by Swiss-owned pharmaceutical giant Sandoz, as well as Evolve preservative-free, dry-eye products, developed with partner Medicom
Aequus has also launched transplant therapy Tacrolimus - also licensed from Sandoz - which aims to treat and prevent acute rejection following an organ transplant.
In its development pipeline, the company has a transdermal cannabis product, AQS1304 for neurological disorders; a transdermal anti-nausea drug, AQS1303; and an epilepsy treatment, Topiramate XR licensed from Supernus Pharmaceuticals.
How is it doing:
Aequus Pharmaceuticals has made a solid start to 2021.
On March 1, Aequus Pharmaceuticals announced the commercial availability of the Evolve preservative-free lubricating eye drops for dry eye care. The company said the premium formulations - ‘Intensive Daily’ drops, with the gold standard 0.2% sodium hyaluronate, and the unique, triple-action ‘Intensive Gel’ drops, containing hyaluronate, carbomer 980 and glycerol - will provide soothing hydration and symptom relief for patients with dry eye disease.
It said the products will be available exclusively for sale by eye care clinics in Canada, where patients can receive the full benefit of dry eye treatment plans when they are diagnosed, prescribed, and monitored by eye care professionals.
Launched in 2015 in Europe, the Evolve brand has grown to 5 products across 35 countries. With an array of products, the brand can address the various symptoms involved with dry eye disease and blepharitis including discomfort, stinging, burning, and dryness. Currently in Canada, the dry eye market is estimated at over $90 million, which includes both prescription and over-the-counter products.
On other products front, in October last year, Aequus revealed that it had agreed to an extension of terms for its promotional service agreement on the Sandoz drug Tacrolimus immediate-release (Tacrolimus IR), which is used to prevent patient rejection after organ transplants. Also with Sandoz, Aequus has a commercial relationship pertaining to the Vistitan glaucoma drug.
Aequus began promoting Sandoz’s generic Tacrolimus In December 2015. Tacrolimus has since achieved “over 10x growth” in Canada through increased brand awareness and new patient adoption programs, according to the company, the group said.
In July, the company extended its commercial agreement on Tacrolimus and Vistitan with Sandoz Canada Inc beyond February 2022. The partnership also could expand to include additional products.
In the boardroom, in November last year, the company announced that co-founder Anne Stevens was stepping down as its chief operating officer. Aequus said Stevens will remain a director of the company and continue to serve on its board. Earlier in the year, Aequus revealed that entrepreneur Grant Larsen had been hired as the company's chief commercial officer, effective August 17 2020, noting that he had almost 20 years of senior management positions in North American eye care.
And on February 12, 2021, Aequus announced that Marc Lustig had agreed to join its board of directors concurrent with making a $1 million direct equity investment in the company. Lustig currently serves as a director at cannabis companies Cresco Labs and Pharmacielo Ltd, he is also chairman of both cannabis investment firm Trichome Financial Corp and medical cannabis group IMC Cannabis.
Looking at financials, on May 31, Aequus reported its first-quarter 2021 results showing an operating loss before other income of $623,636 for the first quarter of 2021, a 53% change from the loss before other income of $408,706 in the three months ended March 31, 2020. The company said the higher loss was primarily due to lower revenue and an increase in product development and regulatory costs related to Zimed-PF as it progresses through the Health Canada review process as well as higher non-cash expenses triggered by the conversion of convertible debt to equity.
The company posted first-quarter 2021 revenues of $491,821, a 15% decrease over the $579,450 revenue during the same period in 2020, primarily driven by timing differences resulting from consumer buying patterns and not believed to be attributable to any specific cause or variable controllable by the company. It noted that COVID-19 restrictions continue to be an access barrier in Ontario and Quebec, but said the impact of the restrictions is not measurable.
Inflection points:
- Boost from commercial availability of Evolve eye drops
- Growth in Tacrolimus sales after agreement extension
- Further revenue growth and loss reductions
What the boss says:
In a statement accompanying the firm's Q1 2021 results, Aequus chairman and CEO Doug Janzen commented: “We had a productive start to 2021. Despite the many COVID-19 related restrictions that impacted all of Canada, our sales force continued to find creative ways to manage the business.
"We were excited to launch our new E-commerce platform www.aequuseyecare.ca. This new tool strengthens our established sales infrastructure and will allow us to more readily take on new products and scale up commercial operations, as needed when sales opportunities are expected to change after current COVID restrictions are lifted.”
Janzen added: “Sales were down slightly in Q1 compared to the same period last year and lower than our record quarter in fourth quarter 2020, which from a timing perspective, appeared to cannibalize some January sales. We were pleased to see sales meet internal forecasts since February and we expect to continue our revenue growth trajectory going forward.”
Contact the author: patrick@proactiveinvestors.com
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