INVO Bioscience (IVOB) Reports Q4 & Year End Financial Progress
INVO Bioscience, Inc. (IVOB), is a medical device company, headquartered in Medford, Massachusetts, focused on creating simplified, lower cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that enables egg fertilization and early embryo development in the woman’s vaginal cavity which has been granted FDA clearance as the first Intravaginal Culture System.
INVO Bioscience recently announced its fourth quarter and year-end financial results for the periods ended December 31, 2018, as well as the following recent highlights:
- Revenue for Q4 2018 increased 90.5% at $154,990, compared to $81,355 for the same period a year ago;
- Revenue for 2018 increased 75.2% at $494,375, compared to $282,145 for YE 2017;
- Closed exclusive U.S. licensing agreement with Ferring International Center S.A. the parent Company of Ferring Pharmaceuticals U.S. to commercialize the novel INVOcell™ system for use in the treatment of infertility. Agreement closed on January 14, 2019;
- Company received a $5 million one-time milestone payment subsequent to the end of the quarter and year end, with the ability to receive another $3 million upon obtaining label enhancement;
- In January 2019, the Company appointed Michael J. Campbell as COO & VP of Business Development, joining the Company from most recently as VP of IVF Americas for Cooper Surgical Inc. (CSI), a wholly owned subsidiary of The Cooper Companies (COO) – Campbell will head up the INVO’s planned commercialization efforts internationally, as well as oversee the launch of the INVO clinic strategy in the United States;
- In March 2019, INVO announced the launch its first Company-owned embryology center in the Bay Area of California.
Katie Karloff, Chair and Chief Executive Officer of INVO Bioscience, commented, “I am extremely pleased with the progress made over the last year to accelerate the adoption of the revolutionary INVOcell device and procedure. We started the year by rapidly increasing adoption rates of the device, which culminated in 91% sales growth in the fourth quarter, and concluded it by entering into an exclusive U.S. licensing agreement with one of the world’s leading fertility companies, Ferring Pharmaceuticals, which we believe will only accelerate our revenue growth into the future. With the licensing agreement in place and U.S. commercialization well taken care of, it has allowed us to focus our efforts on other value-creating opportunities: expanding our commercialization efforts internationally and building out our clinic model in the United States.
Karloff also added “To head up international efforts, in February 2019, we announced the appointment of Michael Campbell as our COO and Vice President of Business Development. Mike was most recently the Vice President of IVF Americas Business Unit for Cooper Surgical. Mike has a strong background in the fertility market and has significant knowledge of and relationships with companies and distributors that operate internationally. Over the last couple of months, we are actively speaking with potential commercialization partners in Europe, the Middle East and Africa, India, China, and the Latin American markets. I look forward to advancing these discussions as we look to develop a commercial model that will successfully drive the adoption of INVOcell outside the U.S. Additionally, we are actively deploying our clinic model in the U.S. In March, we announced our first Company-owned embryology center to be opening in the Bay Area of California. This first center is one we will look to replicate in other parts of the country allowing us to capture a larger share of the overall procedure opportunity, which substantially increases our addressable market opportunity. Having received $5 million in upfront milestone payments, we now have the balance sheet and resources to pursue two key opportunities that we believe will build substantial long-term value in INVO Bioscience. I believe 2019 will be an exciting year for our company and thank our shareholders for their commitment over the last number of years.”
Under the terms of the license and supply agreement, INVO Bioscience received an upfront cash payment, is eligible to receive a second additional milestone payment based upon the successful completion of the INVOcell product label enhancement and will receive payment for the supply of each INVOcell device. Additionally, Ferring is obligated, subject to certain conditions, to achieve defined minimum revenue targets over the next seven years. INVO Bioscience will be responsible for manufacturing and supplying INVOcell to Ferring for commercial sales and to obtain a five (5) day label enhancement from the FDA for the current incubation period for the product. INVO Bioscience also retains certain limited rights to establish INVO clinics that exclusively commercialize INVO cycles and will retain commercialization rights outside the U.S.
Further terms of the agreement can be found in an 8-K filed by INVO Bioscience on January 17, 2019 with the SEC and in our 10-K. Please click here to access the report.
2018 Financial Results
- Net sales and revenues for year ended December 31, 2018 were $494,375 compared to $282,145 for the same year ended December 31, 2017; an increase of 75.2%.
- Cost of goods sold for the year ended December 31, 2018 were $90,367 or approximately 18% of revenues compared to $51,954 or approximately 18% of revenues for the year ended December 31, 2017.
- Selling, general and administrative (SG&A) expenses for the year ended December 31, 2018 were $3,038,068 as compared to $870,612 for the year ended December 31, 2017. Included in SG&A during 2018 was $1.5 million of non-cash common stock compensation in consideration for services performed both pre and post FDA clearance for clinical guidance and support by our Medical Director.
- Adjusted EBITDA, which is a non-GAAP measure of operating performance, was $(424,723) during the year ended December 31, 2018, compared to $(408,382) for year ended December 31, 2017. Net loss for the year ended December 31, 2018 was $(3,062,195), or $(0.02) per share, compared with $(702,163), or $(0.00) per share for year ended December 31, 2017.
- The Company ended the quarter with $212,243 in cash and equivalents. As disclosed, in connection with the signing of the U.S. distribution agreement in January 2019, the company received a $5 million one-time milestone payment to execute its business plan.
- Additional details pertaining to the annual financials can be found in our 10-K filed today with the SEC.
- Use of Non-GAAP Measure Adjusted EBITDA is presented herein and is a non-GAAP measure. However, this measure is not intended to be a substitute for those financial measures reported in accordance with GAAP. Adjusted EBITDA has been included because management believes that, when considered together with the GAAP figures, it provides meaningful information related to our operating performance and liquidity and can enhance an overall understanding of financial results and trends. See our attached financials for a reconciliation of this non-GAAP measure to the most comparable GAAP measure.