EMERYVILLE, Calif. - NovaBay Pharmaceuticals, Inc. (NYSE American: NBY), a developer of eyecare and wound care products, has announced the sale of its DERMAdoctor skincare business for approximately $1.0 million in cash. The transaction, which includes all product inventory, is expected to close by the end of the first quarter of 2024, with NovaBay providing transitional services for the subsequent 90 days.
The divestiture is aimed at reducing quarterly operating expenses and increasing cash reserves during a period characterized as challenging for capital markets. Justin Hall, CEO of NovaBay, stated that the sale would streamline the company's operations and enhance its ability to pursue strategic opportunities with higher growth potential, particularly in its core Avenova business.
NovaBay expanded its direct-to-consumer offerings during the COVID-19 pandemic, anticipating sustained growth in eCommerce sales. However, the company's sales and profitability forecasts for DERMAdoctor were not met, prompting the decision to sell the skincare segment. This move is consistent with NovaBay's strategy to focus on more promising avenues, such as the recent co-promotion partnership with Eyenovia (NASDAQ:EYEN).
On Monday, NovaBay announced an agreement to market Eyenovia's FDA-approved clobetasol propionate ophthalmic suspension through its U.S. physician-dispensed channel. In turn, Eyenovia will market NovaBay's prescription Avenova Antimicrobial Lid & Lash Solution.
NovaBay reported net sales of $3.7 million for the fourth quarter of 2023, with DERMAdoctor contributing $0.9 million and the eyecare and wound care segment contributing $2.8 million.
The operating loss for the quarter was approximately $3.2 million, with $2.7 million attributed to the DERMAdoctor segment, including a non-cash impairment of goodwill and assets. For the 2023 fiscal year, net sales were $14.7 million, with DERMAdoctor accounting for $3.6 million and an operating loss of $7.4 million, including a $3.8 million loss from the skincare segment.
As of December 31, 2023, NovaBay had cash reserves of $3.1 million and $1.1 million in outstanding convertible notes. The company plans to report its full-year financial results soon and will hold an investment community conference call, with details to be announced later.
This article is based on a press release statement from NovaBay Pharmaceuticals, Inc.
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