Sonoma Pharmaceuticals explores 'strategic alternatives' for US dermatology division
Sonoma Pharmaceuticals Inc. (Nasdaq: SNOA), a 20-year-old company that focuses on treatments for chronic skin conditions, is exploring “strategic alternatives” for its U.S. dermatology business, including a sale or some other transaction.
The Petaluma-based firm announced Thursday that it has hired New York-based investment bank Maxim Group LLC as financial adviser but offered no timeline for wrapping up the exploration of options or closing any deal.
The company describes its core market as treatments for skin diseases, with secondary markets for eye hygiene and cleansing wounds in acute care settings, according to the annual report. Seven of the company’s 10 products approved for the U.S. market are targeted toward dermatologists, and the remainder are Microcyn and a veterinarian version for wound care, according to the annual regulatory filing.
Skin care for humans made up 85.3% of the $9.10 million in product revenue during the firm's fiscal first half, with the remainder coming from adaptations of products for the veterinary market, ended Sept. 30, per a regulatory filing.
“We’ve developed a portfolio of quality dermatology products that are highly valued by our customers,” Amy Trombly, interim CEO, said in a statement.
Sonoma Pharmaceuticals has been changing up its top leadership in the past 13 months to shore up its finances. Jim Schutz and Robert Miller departed in December 2018 as CEO and chief financial officer, respectively. Trombly, whose law firm has been acting as corporate counsel for a decade, was brought in as interim CEO in September after the exit of Frederick “Bubba” Sandford, who came to the interim roles of CEO and CFO to stabilize the company’s cash flow, according to regulatory filings. In October, John Dal Poggetto was promoted from controller to chief financial officer.
For its second fiscal quarter, the company reported cut its quarterly expenses by 31%, or $1.58 million, from a year before, and reduced its net loss by 57% over that time frame, to $1.2 million. For the first fiscal half, the net loss was trimmed by 92%, to $488,000.
In May, the company inked a deal with Petagon to sell certain European veterinary products, netting $2.47 million. In 2016, the company signed a deal to transfer some of its Central American business.
The company employed 62 fulltime at the Petaluma headquarters production plant and a sales office in the Netherlands as well as 191 contract workers at the Mexico factory, as of the March 2019 annual report.
Started in 1999 as Micromed Laboratories Inc., the company changed its name in 2001 to Oculus Innovative Sciences and went public in January 2007. In December 2016, it became Sonoma Pharmaceuticals.
The price of the company's stock was $5.69 a share at the close of trading Friday, up nearly 10% from Thursday.