BE-Smart represents a significant advance in diagnosis and management of Esophageal disease that affects an estimated 60 million people in the United States Study shows >95% success rate, validating BE-Smart for use with esophageal brush cytology. UNIONDALE, NY, June 17, 2025 (GLOBE NEWSWIRE) -- ProPhase Labs Inc. (NASDAQ: PRPH), (the “Company” or “ProPhase”) a next generation biotech, genomics and consumer products company, today announced the successful completion of a key validation study evaluating the ...

Core Insights - ProPhase Labs Inc. has established a Clinical Science Advisory Board to facilitate the clinical adoption and commercialization of its BE-Smart molecular test for esophageal disease, aiming to set a new standard in early detection and management of esophageal cancer risk [1][10] - The BE-Smart test is positioned to capture a target market of approximately $7 - $14 billion, based on the 7 million endoscopies performed annually in the U.S. for patients at risk of esophageal cancer, with a reimbursement goal of $1,000 - $2,000 per test [3] Company Overview - ProPhase Labs Inc. is a next-generation biotech, genomics, and consumer products company focused on innovative healthcare solutions, including Whole Genome Sequencing and diagnostic developments [11] - The company aims to revolutionize healthcare through actionable insights and is committed to executional excellence and smart diversification [11] Advisory Board Composition - The advisory board includes Dr. Joe Abdo, the inventor of the BE-Smart test, and Mr. James McCullough, founder and CEO of Renalytix, both of whom bring extensive experience in molecular oncology and diagnostic technologies [2][9] - Additional experts will be added to the advisory board to support the initial commercial launch of BE-Smart [2] Product Features and Advantages - BE-Smart offers a unique approach by measuring real-time protein activity, which captures dynamic biological signals of disease progression, requiring only a single 10 µm FFPE biopsy section [3][4] - The test integrates into existing endoscopy and pathology workflows, providing results in under 7 days without added complexity for healthcare providers [3] Clinical Utility - BE-Smart can stratify risk for patients with GERD and Barrett's Esophagus, addressing limitations of current diagnostic tools [4] - The test's design is scalable and cost-efficient, making it an attractive option for clinicians and healthcare systems [4] Competitive Landscape - Other technologies like TissueCypher and EsoGuard have established momentum in esophageal diagnostics, paving the way for broader adoption of molecular tools [5] - BE-Smart builds on this progress by offering a next-generation approach that combines real-time biological precision with streamlined clinical integration [5] Intellectual Property - ProPhase Labs has secured exclusive patents covering proprietary methods for detecting and analyzing eight key proteins critical for esophageal adenocarcinoma progression, providing a competitive advantage in the molecular diagnostics market [6] Clinical Validation - The latest clinical validation manuscript for BE-Smart is under review at the Journal of Clinical Gastroenterology and Hepatology, with a preprint expected soon [7][8]

Financial Performance - For the three months ended March 31, 2025, net revenue was $1.4 million, a decrease of 41.7% from $2.4 million for the same period in 2024[184]. - Gross margin profit for the three months ended March 31, 2025 was $0.5 million, compared to a gross margin loss of $0.1 million for the same period in 2024, resulting in an overall gross margin of 36.8%[186]. - Net loss from continuing operations for the three months ended March 31, 2025 was $4.7 million, or $(0.13) per share, compared to a net loss of $5.5 million, or $(0.32) per share, for the same period in 2024[190]. - Adjusted EBITDA from continuing operations for the three months ended March 31, 2025, was $(1,614,000), an improvement from $(4,286,000) in the prior year[196]. Revenue Generation - The company did not generate any revenues from diagnostic services for the three months ended March 31, 2025 and 2024, respectively[184]. - The company has not provided any diagnostic services since 2024 due to a significant decrease in demand and reimbursement rates[180]. - The company has not generated any diagnostic services revenue from the HRSA funding program for the three months ended March 31, 2025[213]. Expenses and Costs - General and administration expenses decreased by $3.2 million to $4.1 million for the three months ended March 31, 2025, compared to $7.3 million for the same period in 2024[187]. - Research and development costs decreased to $97,000 for the three months ended March 31, 2025, down from $272,000 for the same period in 2024, reflecting reduced activities related to product research[188]. - Interest expense increased to $539,000 for the three months ended March 31, 2025, compared to $441,000 for the same period in 2024, due to a higher balance of outstanding debt[189]. - The company incurred $4,000,000 in cash used in operating activities during the three months ended March 31, 2025[197]. - The Company anticipates that increased costs for retail operations due to inflation will be passed on to customers, while costs related to diagnostic services will be absorbed by the Company[219]. Cash and Capital - As of March 31, 2025, the company's cash and cash equivalents totaled $88,000, a significant decrease from $678,000 at December 31, 2024[197]. - The company anticipates continuing to incur losses and will require additional capital to fund operations, which may be raised through public or private equity or debt financings[202]. - The company sold 1,033,500 shares of common stock in April 2024, generating cash proceeds of $4,600,000 after offering costs[217]. - The Company closed a public offering selling 4,795,000 shares at $0.72 per share, raising gross proceeds of $3.5 million and net cash proceeds of $3.0 million after offering costs[218]. Obligations and Agreements - The company has a royalty obligation of 5.5% on sales of Equivir products following the first commercial sale[203]. - Under the Linebacker License Agreement, the company is required to pay $900,000 upon achieving a first Phase 3 study and an additional $1,000,000 upon receiving regulatory approval for the first product[204]. - The company has a term note agreement with an implicit interest rate of 15% for cash proceeds of $500,000, requiring monthly interest payments[212]. Market Conditions and Risks - Current economic conditions may lead to a decline in business and consumer spending, adversely affecting the Company's financial performance[225]. - The Company does not expect material losses in its investment portfolio or excessive exposure to market risks associated with interest rates[224]. - The Company has not experienced material changes in market risk exposures since December 31, 2024[226]. - There were no material changes in critical accounting estimates or accounting policies from December 31, 2024[221]. Strategic Initiatives - The company continues to actively pursue acquisition opportunities for other companies, technologies, and products within and outside the consumer products industry[182]. - The company acquired exclusive rights to the BE-Smart Esophageal Pre-Cancer Diagnostic Screening Test and related intellectual property assets in January 2023[175].

Prophase Labs (PRPH) Q1 2025 Earnings Call May 20, 2025 10:00 AM ET Company Participants Noella Alexander-Young - Media Relations Coordinator & Virtual Events ModeratorTed Karkus - Chairman & CEO Noella Alexander-Young Hello, and good morning, everyone. Welcome to today's presentation. My name is Noella Alexander Young, virtual event moderator here at Renmark Financial Communications. On behalf of our team, we want to thank everyone for joining us today for Prophase Labs First Quarter twenty twenty five Res ...

Financial Data and Key Metrics Changes - The company reported a significant increase in shareholders' equity, which roughly doubled from approximately $7 million to over $15 million following the sale of a manufacturing facility [16][34][92] - The company is currently operating at breakeven for its Nebula Genomics division, which is expected to generate substantial cash flow in the future [60][89] Business Line Data and Key Metrics Changes - The b smart esophageal cancer test is anticipated to have a market potential of $7 to $14 billion, with the company expecting to receive reimbursement of $1,000 to $2,000 per test [46][47] - DNA Complete is generating around $5 million in annual revenues, with potential to reach $10 million with increased marketing efforts [93] Market Data and Key Metrics Changes - The company is exploring strategic alternatives for Nebula Genomics and DNA Complete, aiming to clean up its capital structure and reduce pressure on the stock price [54] - The company has a large genomic dataset of 16 petabytes, which is one of the largest in the world, enhancing its market position [58] Company Strategy and Development Direction - The company plans to focus on debt financing rather than issuing shares, aiming to maintain shareholder value while preparing for upcoming liquidity events [22][102] - The management is committed to a methodical approach to commercialization of the b smart esophageal cancer test, leveraging existing sales networks rather than building a new sales force [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in collecting approximately $20 million in uncollected accounts receivable, with expectations that actual collections could exceed this amount [106] - The company anticipates significant cash inflows in the second half of the year, driven by collections and the potential sale of Nebula Genomics [99][104] Other Important Information - The company has deferred a significant portion of executive compensation until liquidity events occur, demonstrating alignment with shareholder interests [25] - The company is actively working on legal matters with Crown Medical to recover underpaid reimbursements from insurance companies, which could lead to additional cash inflows [70][73] Q&A Session Summary Question: What is a realistic timeline for the commercialization of BSmart? - The first patient testing is expected to occur later this year, but commercialization will likely be a multiyear process [81] Question: What vaccines or illnesses are being worked on? - The company is not currently working on any vaccines and is focusing on the b smart esophageal cancer test and dietary supplements [88] Question: What steps are being taken to meet Nasdaq compliance? - The company has filed for an extension and is confident it will receive it, as it meets all other qualifications [90][91] Question: Has the DNA Complete division started generating revenues? - DNA Complete is generating around $5 million annually, with potential for growth through increased marketing [93] Question: Are we still looking at June/July for COVID testing payments? - The company is optimistic about receiving payments in June, with significant capital expected to flow in the second half of the year [96][99] Question: Have you accessed the line of credit from the global private equity group? - A small amount of capital has been taken in, and the company is exploring additional debt financing options [102] Question: What milestone items should shareholders be aware of for the balance of 2025? - Key milestones include the development of the esophageal cancer test and the rollout of Equivira, with a focus on maintaining cash reserves [104]

Financial Performance - For Q1 2025, net revenue was $1.4 million, down from $2.4 million in Q1 2024, primarily due to a $1.0 million decrease in consumer products revenue[18]. - Revenues for the three months ended March 31, 2025, were $1,431 million, down 39.2% from $2,356 million for the same period in 2024[32]. - The company reported a net income of $3,966 million for the three months ended March 31, 2025, compared to a net loss of $6,265 million in the same period of 2024[32]. - Net loss from continuing operations for Q1 2025 was $4.7 million, or $(0.13) per share, compared to a net loss of $5.5 million, or $(0.32) per share, in Q1 2024[23]. - Adjusted EBITDA from continuing operations improved to a loss of $1,614 million for Q1 2025, compared to a loss of $4,286 million in Q1 2024[40]. Cost Management - General and administration expenses decreased to $4.1 million in Q1 2025 from $7.3 million in Q1 2024, reflecting a reduction of $3.2 million[21]. - Research and development costs were $97,000 in Q1 2025, down from $272,000 in Q1 2024, a decrease of $175,000[22]. - The company has significantly reduced its workforce from 96 employees in December 2024 to 25 full-time employees currently, aiming to streamline operations and reduce overhead costs[4]. Asset and Equity Changes - Total stockholders' equity increased to $15.1 million as of March 31, 2025, up from $7.4 million at December 31, 2024[24]. - Total assets decreased from $63,200 million as of December 31, 2024, to $50,111 million as of March 31, 2025, representing a decline of approximately 20.7%[30]. - Total current liabilities decreased from $32,134 million as of December 31, 2024, to $24,052 million as of March 31, 2025, a reduction of about 25.3%[30]. Cash Flow and Debt - Cash and cash equivalents decreased from $1,175 million at the end of Q1 2024 to $88 million at the end of Q1 2025, a decline of approximately 92.5%[34]. - The company incurred a debt extinguishment loss of $431 million in Q1 2025, which was not present in Q1 2024[32]. - The company reported cash paid for income taxes of $256 million in Q1 2025, compared to $318 million in Q1 2024, indicating a decrease of approximately 19.5%[35]. Future Prospects - The company anticipates a potential recovery of approximately $50 million in insurance payments through Crown Medical Collections, which could provide significant cash flow in the second half of 2025[9][10]. - ProPhase is pursuing the sale of its subsidiary Nebula Genomics, with expectations of receiving letters of intent in the coming weeks and a potential sale within 3-4 months[7]. - The BE-Smart Esophageal Cancer Test is nearing commercialization, with a recent submission for peer review highlighting its potential to improve clinical testing for esophageal disease[11][13]. Profitability Metrics - Gross margin profit for Q1 2025 was $0.5 million, compared to a gross margin loss of $0.1 million in Q1 2024, resulting in an overall gross margin of 36.8% versus (2.5)%[20]. - Gross profit for the first quarter of 2025 was $526 million, compared to a gross loss of $60 million in the same quarter of 2024, indicating a significant improvement[32]. - Weighted average common shares outstanding increased from 17,207 million in Q1 2024 to 35,233 million in Q1 2025, reflecting a significant increase in share issuance[32].

Core Insights - ProPhase Labs is undergoing significant operational transformations aimed at reducing overhead and aligning resources with high-value opportunities, particularly in the biotech and genomics sectors [5][17] - The company anticipates multiple liquidity events in the coming months, including the potential sale of its subsidiary Nebula Genomics and recovery of insurance payments through Crown Medical Collections [7][10][11] Financial Performance - For Q1 2025, ProPhase reported net revenue of $1.4 million, a decrease from $2.4 million in Q1 2024, primarily due to a $1.0 million drop in consumer products revenue [20] - The cost of revenues for Q1 2025 was $0.9 million, leading to a gross margin profit of $0.5 million, compared to a gross margin loss of $0.1 million in Q1 2024 [21][22] - General and administrative expenses decreased to $4.1 million in Q1 2025 from $7.3 million in Q1 2024, reflecting cost-cutting measures [23] - The net loss from continuing operations for Q1 2025 was $4.7 million, or $(0.13) per share, an improvement from a loss of $5.5 million, or $(0.32) per share, in Q1 2024 [25] Strategic Developments - The company completed the divestiture of its Pharmaloz manufacturing operations for approximately $23 million, saving over $2 million annually [4] - ProPhase is pursuing strategic alternatives for Nebula Genomics, which has a unique 16-petabyte DNA dataset, and expects to receive letters of intent from potential acquirers soon [7][8] - The BE-Smart Esophageal Cancer Test has been submitted for peer review, with commercialization expected later this year, following a favorable ruling on laboratory-developed tests [12][14][16] Cash Flow and Liquidity - As of March 31, 2025, ProPhase had cash and cash equivalents of $88,000, down from $678,000 at the end of 2024, primarily due to cash used in operating activities [26] - The company is optimistic about generating significant cash flow from Crown Medical Collections, which estimates a recovery of approximately $50 million in insurance payments [10][11] Market Position and Future Outlook - ProPhase Labs aims to position itself as a leader in precision diagnostics, particularly in gastroenterology, with its proprietary BE-Smart platform [16] - The company is focused on unlocking value through strategic asset development and disciplined execution, with several major milestones anticipated in the near future [17]

Financial Data and Key Metrics Changes - The company has approximately $20 million in accounts receivable from COVID testing, with expectations to collect around $50 million through a collection agency [34][36] - The company sold the Cold-Eeze brand for $50 million and formalized manufacturing for $23 million, which helped clean up the balance sheet [20][21] - The management believes the current market cap is significantly lower than the potential value of the accounts receivable and other assets [37] Business Line Data and Key Metrics Changes - The company transitioned from Cold-Eeze to COVID testing, generating hundreds of millions in revenue during the pandemic [13][14] - The esophageal cancer test, B Smart, is highlighted as a key asset with potential for commercialization without significant upfront costs [58][60] - Nebula Genomics has been restructured, and the company is exploring its sale as a potential liquidity event [45][46] Market Data and Key Metrics Changes - The company has built a significant database with over 60,000 whole genome sequencing tests, which is considered a hidden value [127][128] - The management is optimistic about the potential for partnerships with larger diagnostic companies for the B Smart test, which could enhance market presence [67][105] Company Strategy and Development Direction - The company aims to streamline operations and focus on profitability after significant restructuring, including cutting overhead and headcount [56][54] - Future strategies include exploring partnerships for the B Smart test and potentially selling Nebula Genomics to improve cash flow [45][126] - The management emphasizes a cautious approach to spending on new initiatives to avoid diluting shareholder value [64][66] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenges faced in the past year but expresses confidence in the company's ability to execute and generate revenue moving forward [14][56] - There is a focus on building revenues and achieving profitability, with expectations for significant liquidity events in the near future [49][134] - The management believes the current stock price does not reflect the company's underlying value and is optimistic about future performance [37][133] Other Important Information - The company has shut down its Nebula Genomics laboratory due to high overhead costs and is now focusing on a direct-to-consumer model [90][51] - The management is exploring the acquisition of telehealth companies to leverage marketing expertise and expand business reach [97][95] Q&A Session Questions and Answers Question: What is the projected timeline for securing CPT coding approval for the B Smart test? - The timeline can vary, but the company plans to explore multiple avenues for approval without significant spending [101][102] Question: Do you expect the cash pay diagnostic model for the B Smart test to generate significant revenue in the interim period before CPT approval? - It is viewed more as a trial period to get the product into GI offices and raise awareness [115][116] Question: You purchased Nebula and the rights to B Smart for just a few million dollars each. What is the potential you see in these assets that the sellers/marketplace do not? - The company invested significantly more than initially paid and believes both assets have substantial intrinsic value [120][122] Question: What is the possibility of a reverse split? - The management is optimistic about avoiding a reverse split and believes liquidity events will help the stock price recover [132][134]

Financial Data and Key Metrics Changes - The company has approximately $20 million in accounts receivable from COVID testing, with expectations to collect around $50 million through a collection agency [34][36] - The company sold the Cold-Eeze brand for $50 million and formalized manufacturing for $23 million, which helped clean up the balance sheet [21][22] - The company has undergone significant restructuring, reducing overhead and employee count, leading to a more efficient operation [54][56] Business Line Data and Key Metrics Changes - The company transitioned from COVID testing to focusing on its esophageal cancer test and other consumer products, indicating a shift in business strategy [12][58] - The esophageal cancer test is positioned as a breakthrough diagnostic tool, with plans for commercialization without incurring significant costs [60][64] - The company has shut down its Nebula Genomics laboratory due to high overhead and is now focusing on a direct-to-consumer model [51][89] Market Data and Key Metrics Changes - The company is exploring the sale of Nebula Genomics, which could provide significant liquidity and improve cash flow [45][126] - The market for esophageal cancer diagnostics is highlighted, with the company aiming to capture a share by offering a more accurate test compared to existing options [67][111] Company Strategy and Development Direction - The company aims to develop its assets methodically without incurring excessive costs or diluting shareholder value [64][86] - There is a focus on potential liquidity events, including the collection of accounts receivable and the sale of assets, to improve financial stability [23][48] - The company is exploring partnerships with larger diagnostic companies to enhance the commercialization of its esophageal cancer test [67][105] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about upcoming liquidity events that could significantly impact the stock price positively [37][134] - The company is committed to maintaining a lean operation while focusing on revenue growth and profitability [56][86] - Management emphasized the importance of not overspending on new initiatives, particularly in the current low stock price environment [64][86] Other Important Information - The company has a significant database from whole genome sequencing tests, which adds intrinsic value to its assets [127][128] - Management is considering acquiring a telehealth company to leverage marketing expertise and expand its service offerings [97] Q&A Session Summary Question: What is the projected timeline for securing CPT coding approval for the B Smart test? - The timeline can vary, but the company plans to explore multiple avenues for approval without significant expenditure [101][102] Question: Do you expect the cash pay diagnostic model for the B Smart test to generate significant revenue in the interim period before CPT approval? - It is viewed more as a trial period to get the product into GI offices and raise awareness [116] Question: You purchased Nebula and the rights to B Smart for just a few million dollars each. What is the potential you see in these assets that the sellers/marketplace does not? - The company invested significantly more than initially paid, enhancing the value of these assets through development and improved market strategies [120][122] Question: What is the possibility of a reverse split? - The company is optimistic about avoiding a reverse split by achieving significant liquidity events within the next nine months [134]

Financial Performance - As of December 31, 2024, the company incurred net losses of approximately $53.4 million and anticipates continued significant operating and capital expenditures [133]. - Year-to-date cash used by operating activities was approximately $17.5 million, with cash and cash equivalents at approximately $0.7 million as of December 31, 2024 [136]. - The net revenue from diagnostic services for the year ended December 31, 2024, was zero, compared to $24.8 million in 2023, representing a decline from 54.9% to 0% of total net revenue [189]. - The company faces significant risks related to collection from uninsured patients and complexities in billing, which could adversely affect revenue [192]. - The company may require additional capital to support its growing personal genomics business, but funding may not be available on acceptable terms [166]. Cash Flow and Capital Needs - The company expects limited cash flow for the foreseeable future due to a significant reduction in diagnostic services and reliance on genomics business revenues [135]. - The company may need to incur indebtedness or issue common stock to finance operations if unable to raise sufficient capital [140]. - Adverse credit market conditions could significantly affect the company's access to capital and liquidity needs, potentially increasing interest expenses [168]. - The company has approximately $14.9 million in outstanding indebtedness and $0.7 million in cash and cash equivalents as of December 31, 2024 [187]. Business Strategy and Development - The company has plans to continue its current research programs and expand its clinical development of product candidates, which will require substantial funding [137]. - The company has actively pursued new product technologies and business opportunities since the sale of the Cold-EEZE™ business in March 2017 [147]. - The company plans to continue identifying and acquiring complementary products and technologies, including diagnostic tests and product candidates [174]. - The company announced intentions to develop business units in the MENA region, which may strain resources and require effective management coordination [182]. Market and Competitive Environment - The company faces significant competitive pressures in the personal genomics market, with many competitors having greater resources and established market positions [151]. - The growth of the genomics business will strain management and operational resources, requiring effective management of multiple relationships [197]. - The company’s estimates of the total addressable market for personal genomic services may prove to be inaccurate, negatively impacting financial performance [198]. Regulatory and Compliance Risks - The regulatory approval process is expensive, time-consuming, and uncertain, which may impair the company's ability to generate revenues from product candidates [238]. - The company may face delays in obtaining marketing approval for product candidates, which could result in lost competitive lead time [238]. - The company is subject to product liability claims, which could adversely affect its reputation and financial condition if claims exceed insurance coverage [165]. - Dietary supplement businesses are subject to extensive governmental regulations, which can be time-consuming and expensive to comply with [209]. Operational Risks - System failures could adversely affect the company's operations and financial condition, highlighting the importance of IT infrastructure [169]. - The company may face supply chain disruptions impacting access to essential materials and equipment, which could materially affect operations [156]. - Increased costs for testing supplies and raw materials could adversely impact the company's financial condition if these costs cannot be passed on to customers [160]. Legal and Governance Issues - Nasdaq notified the company of non-compliance with audit committee requirements due to a vacancy, with a cure period until September 20, 2025 [288]. - The company received a notice indicating that its common stock bid price fell below the minimum $1.00 per share required for continued listing, with a grace period until June 24, 2025 [290]. - Non-compliance with Nasdaq listing standards could lead to delisting, adversely affecting the company's ability to raise financing and investor confidence [287]. - The company is subject to various laws and regulations regarding direct selling, which may require changes to its business model in certain markets [271]. Intellectual Property and Market Position - The patent position of the company is uncertain, and failure to maintain effective patents could hinder competitive ability in the market [259]. - The potential for third-party claims of intellectual property infringement poses a risk to the company's development and commercialization efforts [264]. - The effectiveness of sales and marketing efforts is crucial for the success of product candidates, as competition in the market is intense [1]. Consumer and Market Trends - The personal genomics business experiences seasonal fluctuations, with greater revenues expected in the first quarter due to holiday demand [205]. - The successful commercialization of dietary supplements, such as Equivir, is subject to consumer trends, regulatory factors, and overall market conditions [212].