NEW YORK, NY / ACCESSWIRE / November 28, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has issued an update note on Innovus Pharmaceuticals, Inc. (OTCQB: INNV) with a Target Price of $0.80.
The report is available here: November 2018 Update Note.
Innovus Pharmaceuticals, Inc. (OTCQB: INNV, "Innovus") is an emerging OTC consumer goods and specialty pharmaceutical company engaged in the commercialization, licensing, and development of over-the-counter (OTC) medicine and consumer care products to improve men's and women's health, respiratory disease and vitality. Led by CEO Dr. Bassam Damaj, Innovus is based in San Diego, CA and has demonstrated robust growth in its product offerings and annual revenues since we initiated coverage on the company in September 2014. Innovus revenues have grown from approximately $1.0mn in 2014 to $8.8mn in 2017 and guidance of $24mn in revenues in 2018. The company currently markets and sells 32 products in the U.S. and 12 in multiple countries around the world through 16 international commercial partners.
Investment Highlights
Innovus reported strong quarterly results for 3Q18 on November 14, 2018, with record revenues in the period. 3Q18 marked the fifth consecutive quarter of YoY growth, with highlights as follows.
- Record revenues of $7.4mn. Innovus reported record revenues in 3Q18, marking the fifth consecutive quarter of annual growth. Revenues were $7.4mn in 3Q18, which represented 232.3% annual growth versus $2.2mn in 3Q17.
- For the first nine months of 2018, INNV reported revenues of $19.2mn, up 198.9% as compared to $6.4mn in the comparable 2017 period.
- INNV guides to $24mn in annual sales. INNV guided to 2018 revenues of $24mn for 2018, above our prior estimate of $23mn, and representing annual growth - if achieved - of 172.2% versus 2017 revenues of $8.8mn.
- INNV gross margins were 79.2% in 3Q18, slightly above 78.4% in 3Q17. Operating margins narrowed to a loss of (20.45%) versus (54.7%) in 3Q17. EPS was a loss of ($0.01), consistent with 3Q17.
- INNV targeting profitability by end of year. On its results call with stakeholders, INNV articulated a goal of reaching adjusted profitability by the end of the year. Management stated that it would reach the goal by rationalizing sales and marketing spending. We would view sustainable profitability as a noteworthy milestone.
- Top Products. CEO Bassam Damaj noted that six products had eclipsed $1mn in sales thus far in 2018, with units shipped rising to 478,615 versus 94,140 in the nine months ended 2017. As noted in October, INNV also plans its first CBD product, MZS Sleeping Aid with melatonin and CBD oil, to launch in legal CBD markets in 4Q18.
- Update on FlutiCare®. INNV provided an update on FlutiCare sales, which the company noted was its third highest selling product in terms of units sold. While product revenue is likely to fall short of INNV's initial goals for the year, sales are growing, and management notes that it is having success marketing FlutiCare® online, positioning it as a promising growth driver in future periods.
Price target of $0.80 for Innovus
Our price target remains $0.80 for Innovus following 3Q18 results. We increase 2018 revenue estimates to $24mn, in line with guidance, from our prior estimate of $23mn. FY19E revenues moves in slightly to $34.8mn as the company is expected to focus on reaching profitability. INNV is a speculative growth company with multiple catalysts ahead as it strives for profitability and increases products while expanding its sales channels and geographic presence.
Please review important disclosures in the report and on our website at www.seethruequity.com.
About Innovus Pharmaceuticals, Inc.
Headquartered in San Diego, Innovus Pharma is an emerging OTC consumer goods and specialty pharmaceutical company engaged in the commercialization, licensing and development of safe and effective non-prescription medicine and consumer care products to improve men's and women's health and vitality and respiratory diseases. Innovus Pharma delivers innovative and uniquely presented and packaged health solutions through its (a) OTC medicines and consumer and health products, which we market directly; (b) commercial partners to primary care physicians, urologists, gynecologists and therapists; and (c) directly to consumers through our on-line channels, retailers and wholesalers. The Company is dedicated to being a leader in developing and marketing new OTC and branded Abbreviated New Drug Application ("ANDA") products. The Company is actively pursuing opportunities where existing prescription drugs have recently, or are expected to, change from prescription (or Rx) to OTC. Innovuspharma.com
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative approach to deliver equity research of microcap and smallcap companies. SeeThruEquity has also been the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion since 2012.
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