05.12.23
Net product revenue for NovaBay Pharmaceuticals in the first quarter of 2023 was $3.1 million, compared with $3.3 million for the prior-year period, the company reported.
This includes $2.2 million of Avenova-branded eyecare product sales, $0.8 million of DERMAdoctor skincare product sales and $0.1 million of PhaseOne wound care product sales.
Gross margin on net product revenue for the Q1 ‘23 improved to 62%, compared with 55% for the first quarter of 2022, with the increase primarily due to channel and product mix that favored sales of higher-margin products and the reduction of product returns when compared to Q1 ‘22.
Total operating expenses for the first quarter of 2023 were $3.7 million, a 13% decrease from $4.2 million for the first quarter of 2022. Sales and marketing expenses for the first quarter of 2023 were $1.7 million, compared with $2.0 million in the prior year, with the decrease reflecting lower Avenova digital advertising costs. General and administrative expenses for the first quarter of 2023 were $2.0 million, compared with $2.2 million for the first quarter of 2022, with the decrease due primarily to lower variable compensation costs.
“Net product revenue from our Avenova-branded eyecare products increased over the prior year driven by higher sales of Avenova Spray sold through our physician-dispensed channel and by increased interest in our Avenova companion products,” said Justin Hall, NovaBay CEO. “On the expense side, we benefitted from our focus on digital marketing optimization, which led to a 17% decline in sales and marketing costs.”
However, pursuant to the brand’s ongoing strategy to capitalize on its brand recognition and diversify revenue sources, the brand introduced the first DERMAdoctor product, Comfort + Joy Psoriasis Therapeutic Moisturizing Cream, formulated to relieve the itching, irritation and redness from psoriasis.
The brand also shipped a $1 million order for NeutroPhase Skin and Wound Cleanser to its partner, China Pioneer, which will be recorded in the second quarter, Hall said.
“Proceeds from our recent financing that closed in the second quarter of 2023 will further support our goal of achieving profitability,” he said.