EMERYVILLE, Calif. - NovaBay Pharmaceuticals, Inc. (NYSE American: NBY) has announced the sale of its Avenova brand to PRN Physician Recommended Nutriceuticals, LLC for a cash transaction valued at $9.5 million. The sale is expected to be finalized in the fourth quarter of 2024, pending customary closing conditions and approval from NovaBay's stockholders.
The CEO of NovaBay, Justin Hall, expressed confidence in the transaction, stating that it allows stockholders to realize the value created by the Avenova brand over the past decade. Hall also noted that PRN's established presence in the eyecare sector would likely aid in the continued growth and reach of Avenova.
NovaBay's board of directors, after a thorough evaluation with independent advisors, has concluded that the asset sale is in the best interests of the company and its stockholders. The sale will require a majority vote from NovaBay stockholders, and a proxy solicitation is planned to seek this approval, including a proposal for the company's dissolution and liquidation.
Avenova Lid & Lash Cleansing Spray, NovaBay's flagship product, is recommended by eyecare professionals for conditions such as blepharitis and dry eye disease. The product, which is manufactured in the U.S., is based on NovaBay's patented form of hypochlorous acid and is sold directly to consumers through online channels.
The company's forward-looking statements indicate plans for pursuing the asset sale and subsequent dissolution and liquidation, subject to stockholder approval. These statements also suggest an optimistic outlook for Avenova under PRN's leadership.
NovaBay plans to file a preliminary proxy statement with the SEC regarding the proposed asset sale and dissolution, followed by a definitive proxy statement to be mailed to stockholders entitled to vote.
The information in this article is based on a press release statement.
In other recent news, NovaBay Pharmaceuticals reported a positive growth in its eyecare business, with sales reaching $4.8 million in the first half of 2024 and a projected target of $10 million by the end of the year. The company also reported an 8% rise in total net sales to $2.4 million, and a significant increase in gross margin on net product revenue to 66%. This growth is primarily attributed to NovaBay's effective digital marketing strategies and a 123% increase in Avenova Subscribe & Save customers on Amazon (NASDAQ:AMZN).
In addition, NovaBay successfully raised $3.9 million in capital, emphasizing its focus on the U.S. dry eye market, projected to surpass $4.8 billion by 2030. The company has clarified that it does not intend to expand internationally independently, but through strategic partnerships.
Recent developments also include a 13% decrease in sales and marketing expenses, a record in Avenova product sales during Amazon Prime Day, and steady eyecare unit margins around 65%. NovaBay remains optimistic about reaching its $10 million sales target for the eyecare business in 2024, with incremental growth expected in Q3 and a strong Q4 forecasted. Further updates on the company's strategic transactions and developments will be provided in the next quarterly call.
InvestingPro Insights
As NovaBay Pharmaceuticals, Inc. (NYSE American: NBY) navigates the sale of its Avenova brand, recent data and analysis from InvestingPro show a complex financial landscape for the company. According to the latest metrics, NovaBay's revenue over the last twelve months as of Q2 2024 stands at $13.88 million, with a significant gross profit margin of 57.2%. Despite this, the company has experienced a quarterly revenue decline of -32.09% in Q2 2024, highlighting potential challenges in maintaining sales growth.
InvestingPro Tips indicate that analysts are not optimistic about the company's profitability in the near term, as they do not anticipate NovaBay will be profitable this year. Additionally, the stock has been flagged for high price volatility, which could be a concern for investors considering the company's plans for dissolution and liquidation following the Avenova sale.
Investors should also note that the company's stock price has seen a significant decline, with a one-year total return of -96.7%. This trend aligns with the InvestingPro Tip that the price has performed poorly over the last decade. However, it's worth mentioning that there are a total of 13 additional InvestingPro Tips available for NovaBay, which can provide a more comprehensive understanding of the company's financial health and stock performance.
For those interested in exploring these insights further, the full list of tips can be found on the InvestingPro platform, which could offer valuable context as NovaBay approaches its next earnings date on November 11, 2024.
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