NovaBay Pharmaceuticals, Inc. (NYSE MKT:NBY) Q1 2019 Earnings Conference Call Transcript
May 09, 2019 • 04:30 pm ET
Welcome to the NovaBay 2019 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we'll hold a Q&A session. (Operator Instructions) As a reminder, this conference is being recorded, Thursday May 9, 2019.
I would now like to turn the conference over to Bruce Voss with LHA. Please go ahead sir.
Thank you. This is Bruce Voss. And thank you all for participating in today's call. Joining me from NovaBay Pharmaceuticals are Justin Hall, Interim President and Chief Executive Officer and Jason Raleigh, the Company's Interim Chief Financial Officer. I would like to remind listeners that comments made during this call by management will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from any anticipated results. For a list and description of those risks and uncertainties, please review NovaBay's filings with the Securities and Exchange Commission.
Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast, May 9, 2019. NovaBay Pharmaceuticals undertakes no obligation to revise or update any statements to reflect events or circumstances, except as ***Part 5***
required by law. And now, I'd like to turn the call over to Justin Hall. Justin?
Thank you, Bruce. Good afternoon everybody and thank you for joining us. At NovaBay, we firmly believe that Avenova is the best product available to treat chronic bacterial infections that affect approximately 85% of patients suffering from dry eye. As such, we are fully committed to increasing our portion of this immense market. In recent months, there has been a significant acceleration in some trends within the reimbursement environment that have negatively impacted the sales of branded pharmaceuticals nationwide and Avenova is no exception.
Most notably, the trend is towards higher deductible healthcare plans that we discussed on last quarter's call. Since then, we have worked aggressively to make Avenova affordable to patients through a rebate and coupon strategy that aligns a patient's out-of-pocket costs with an insurance copay for a branded pharmaceutical. As health plans reset each year, NovaBay has used rebates to cover a portion of the patient's out-of-pocket costs for Avenova.
The results of the reset of health plans with even higher deductibles compounded by an unexpected loss of insurance coverage from some large national pharmacy chains had an even greater impact on both Avenova unit sales and gross-to-net pricing in the first quarter of this year than in previous quarters. Beginning with my tenure as interim CEO in mid-March, we are now adapting to this new environment by taking actions to increase sales of Avenova under a cost structure that makes sense for NovaBay. Among our initiatives is the expansion of our partner pharmacy program, which makes Avenova accessible through partner pharmacies' in all 50 states. We've expanded this program to 16 partner pharmacies including eight partner pharmacies added during the past