Mr. Douglas Janzen reports

AEQUUS REPORTS THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS AND GENERAL UPDATE

Aequus Pharmaceuticals Inc. has released its financial results for the quarter ended Sept. 30, 2023, and is providing an update on associated company developments. Unless otherwise noted, all figures are in Canadian currency.

On Aug. 24, 2023, the company announced the launch of Zimed PF, the first preservative-free multidose bimatoprost for glaucoma patients in Canada. "The positive reception of Zimed among physicians, pharmacists and patients is a testament to the products unique ability to address health care challenges in this category. Our optimism surrounding this launch with our investments in digital resources, retail and managerial expertise set a promising tone for 2024," says Grant Larsen, chief commercial officer for Aequus Pharmaceuticals, Canada.

Subsequent to Sept. 30, 2023, the company entered into a demand loan agreement with the chairman and chief executive officer of the company for an additional unsecured demand loan of $1-million. The demand loan bears interest at an annual rate of 5 per cent, to be accrued monthly, and is repayable on demand.

Financial report highlights

Aequus reported $13,359 in revenue during the third quarter of 2023, compared with revenue of $347,923 generated during the same period in 2022. During the nine months ended Sept. 30, 2023 (YTD (year to date) 2023), Aequus achieved $204,019 in revenues, compared with $996,697 generated during the nine months ended Sept. 30, 2022 (YTD 2022), a decrease of $792,678 or 80 per cent.

Net losses increased by 61 per cent in the third quarter of 2023, compared with the same period last year, with the third quarter 2023 net loss of $803,653 versus a $500,471 loss in the three months ended Sept. 30, 2022 (the third quarter of 2022). The loss for YTD 2023 was $2,248,852, which is 2.7 per cent higher than the $2,189,466 loss YTD 2022, primarily due to a decrease of $844,598 or 26 per cent in expenses, offset by the reduction of $792,678 in gross income due to the end of the promotional services agreement with Sandoz at the end of 2022 and the pause of sales in Canada for Evolve branded eyedrops in the summer of 2023. General administration costs were 21 per cent lower in the third quarter of 2023 and 32 per cent lower in YTD 2023 when compared with the same periods last year.

Highlights from the quarter are as follows:

• Sales and marketing costs for the third quarter of 2023 were $458,101, compared with $506,230 in the third quarter of 2022, a decrease of $48,129 or 10 per cent. This reduction was mainly driven by a decrease in sales forces activities and lower products that require marketing initiatives. Sales and marketing expenses are expected to increase with activities transitioning from awareness building of new product Zimed to share and revenue acquisition.
• The company incurred research and development (R&D) expenses of $74,095 in the third quarter of 2023, compared with $6,041 in the third quarter of 2022. The company incurred R&D expenses of $301,280 in YTD 2023, compared with $260,093 in YTD 2022. The $41,187 increase in YTD 2023 was mainly to higher expenses related to the launch process for preservative-free bimatoprost 0.03 per cent eye drops termed Zimed PF.
• General and administration (G&A) expenses were $278,412 in the third quarter of 2023, compared with $353,571 in the third quarter of 2022, a decrease of $75,159. G&A expenses were $877,238 in YTD 2023, compared with $1,286,576 in YTD 2022, a decrease of $409,338. The decrease was mainly driven by general cost-cutting measures and lower loan-related expenses.

About Aequus Pharmaceuticals Inc.

Aequus is a growing specialty pharmaceutical company focused on developing and commercializing high-quality, differentiated products. Aequus has grown its sales and marketing efforts to include several commercial products in ophthalmology and transplant. Aequus plans to build on its Canadian commercial platform through the launch of additional products that are either created internally or brought in through an acquisition or licence, remaining focused on highly specialized therapeutic areas.

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