WHITEFISH, MT / ACCESSWIRE / June 15, 2015 / At the end of May, shares of Oculus Innovative Sciences (NASDAQ: OCLS) broke above their 50 day moving average, a technical resistance at 90 cents and another at $1.05. The move continued to fill a previously open gap at $1.08 and take shares above their 200 day moving average, a sign of bullishness in technical analysis, as the stock printed as high as $1.97 on Tuesday. From the May low of 65 cents, the stock made a bottom-to-top move of 203%. All of this upward movement is important, as the company has received a delisting notice from NASDAQ for deficient bid price. The stock needs to close above $1 for 10 consecutive days in order to satisfy NASDAQ requirements for continued listing. Through June 12, the closing price was above $1 for eight consecutive days.
The driver of the upward march seemed to be traders placing bets that Oculus is successfully implementing its turnaround strategy of launching a new dermatology division and new animal healthcare division while continuing strong international growth, as well as shuffling management to seat Jim Schutz as CEO, expanding distribution and commercializing many new products.
Add in Oculus saying on Monday that it has received a new 510(k) clearance from the U.S. Food and Drug Administration for the company's new Alevicyn SG Antipruritic Spray Gel with both prescription and over-the-counter indications. Produced using Oculus’ patented Microcyn® Technology, the Alevicyn SG prescription product, under the supervision of a healthcare professional, is indicated to manage and relieve the burning, itching and pain experienced with various types of dermatoses, including radiation dermatitis and atopic dermatitis. It may also be used to relieve the pain of first- and second-degree burns and helps to relieve dry waxy skin by maintaining a moist wound and skin environment, which is beneficial to the healing process.
Oculus is launching the product in the U.S. next month and working with its international distributors to initiate global sales.
Alevicyn SG will be looking to carve its way into an atopic dermatitis market that in 2009 GlobalData forecast to reach $810 million by 2016, with the U.S. being the largest contributor at $582 million of those sales. Despite a laundry list of side effects, topical steroids are the standard of care today. Further, due to possible side effects and issues with drug resistance, use of these topical steroid creams is limited, meaning that patients typically have to go on and off therapy for many years in a bid to try and simply control the condition. The novel Alevicyn SG, which is backed by clinical data showing efficacy without side effects, could become a treatment of choice for physicians worldwide and significantly add to the top and bottom line for Oculus.
That’s looking ahead, for now traders were focused on numbers from the fourth quarter of fiscal ended March 31, looking for evidence of momentum building for the company. As discussed in a recent article laying out the turnaround model and attractive potential for Oculus, analysts at Dawson James Securities and Stonegate had a consensus estimate of sales of $3.09 million for the quarter.
Oculus smoked passed those expectations, reporting revenue of $4.0 million, which represents a 37% improvement to $2.9 million in Q4 fiscal 2014 and 25% increase from the third quarter.
The increase in product revenue was widespread. Product revenue in Mexico, the region that generates that largest percentage of revenue for Oculus, soared 96% to $1.7 million from $837,000 in the year prior quarter. The increase is largely attributable to Oculus’ old partner, More Pharma, being bought by Laboratorios Sanfer, a company 10-times bigger than More Pharma with a far deeper distribution channel. U.S. sales rose to $623,000, compared to $287,000 in last year’s quarter. Revenue in Europe and the rest of the world increased $329,000 to $932,000.
Gross profit was $1.9 million, or 52% or product sales, versus $1.4 million, or 52% of sales, in the year prior quarter.
Net loss for the quarter was $1.5 million, compared to a net profit of $7.5 million in Q4 fiscal 2014, although the year earlier quarter benefited from an $11.1 million gain related to Oculus’ investment in its former subsidiary Ruthigen (NASDAQ: RTGN). According to Seeking Alpha, the net loss of 11 cents per share in the latest quarter was far smaller than expected, beating estimates by 14 cents.
Oculus ended the quarter with cash and cash equivalents of $6.14 million. In addition, the Securities and Exchange Commission has approved the merger of Ruthigen and Pulmatrix, which will trigger another payment of $4.5 million to Oculus for selling its remaining stake in Ruthigen as part of the terms of the merger agreement. With nearly $11 million in corporate coffers and no debt, Oculus is on solid ground to continue its growth efforts.
Volume has exploded lately for shares of OCLS, but even though the market capitalization has doubled in the last week or so, it still only stands at $26 million, making Oculus worthy of consideration for value and growth investors.
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