Hydrogel Manufacturing and Capacity - The company's hydrogel manufacturing facility operates at approximately 10% capacity, with the potential to produce 1.4 billion square inches of product annually at full capacity[16] - The company's facilities are FDA-compliant and create a high barrier to entry for competitors in the hydrogel and consumer product business[16] - Hydrogel products manufactured by the company are generally classified as Class I exempt devices, exempt from FDA regulatory submissions[36] - The company maintains sufficient inventory of components and raw materials to prevent significant production disruptions[31] Consumer Products and Brands - The company launched its direct-to-consumer website, Medagel.com, in 2022 and added the Kenkoderm skincare brand in December 2023[17] - The company's consumer products include the MedaGel and LumaGel Beauty brands, targeting OTC remedies and beauty/cosmetic solutions, respectively[17] - The company launched its direct-to-consumer website, Medagel.com, in 2022 and expanded its consumer product brands to include MedaGel, LumaGel Beauty, and Kenkoderm[17] Medical Device Development and Strategy - The company's NEXDrape medical device is designed for patients with impaired skin and has undergone proof-of-concept studies, with plans to file a 510(k) submission with the FDA[21][22] - The company is developing NEXDerm, an adhesive tape for securing medical devices, which aims to offer advantages over Tegaderm™, including pain-free removal and increased infection prevention[23] - The company's medical device strategy focuses on licensing and partnering arrangements rather than commercialization due to high expenses[24] - The company's NEXDrape medical device is designed for patients with impaired skin, targeting a significant and growing incise surgical drape market currently led by 3M Healthcare[21] - NEXDrape has undergone one animal and two human cadaver proof-of-concept studies, with plans to file a 510(k) premarket submission with the FDA[22] - The company is developing NEXDerm, an adhesive tape designed to secure central lines and intravenous tubes, as a gentler alternative to 3M Healthcare's Tegaderm™[23] Custom and White Label Business - The company's custom and white label business allows customers to create their own hydrogel products, with customers paying a development fee to eliminate financial risk for the company[19] - The company's custom and white label business allows customers to create their own hydrogel products, eliminating financial risk for the company[19] Competition and Market Challenges - The company faces competition from larger players like Johnson & Johnson, Pfizer, and Procter & Gamble in the consumer products and medical device markets[28] Revenue and Customer Concentration - One major customer accounted for approximately 20% of revenue in 2023, down from 29% in 2022[34] - The company's contract manufacturing business relies on a major customer that accounted for 20% of revenue in 2023 and 29% in 2022[34] Research and Development - Research and development costs were 367 thousand in 2022[44] - Research and development costs for 2023 were 367 thousand in 2022[44] Employees and Facilities - The company has 19 full-time employees as of December 31, 2023, with 14 involved in manufacturing and regulatory matters[45] - The company leases approximately 16,500 square feet of office and manufacturing space in Langhorne, Pennsylvania, expiring in January 2031[46] - The company subleases approximately 6,200 square feet of a 12,000 square foot facility in Granbury, Texas, expiring in March 2028[46] - The company leases approximately 16,500 square feet of office and manufacturing space in Langhorne, Pennsylvania, expiring January 31, 2031[46] - The company subleases approximately 6,200 square feet of a 12,000 square foot facility in Granbury, Texas, expiring March 2028[46] Intellectual Property and Patents - The company filed for a patent on NEXDrape under the Patent Cooperation Treaty, providing protection in member nations[35] - The company holds an exclusive license to two patents covering a transdermal patch containing transcutol, effective for delivering lidocaine, expiring in April 2032[35] - The company filed for a patent on NEXDrape under the Patent Cooperation Treaty, providing protection in member nations[35] Regulatory Compliance and Risks - The company's facilities are subject to FDA compliance and cGMP regulations, with potential regulatory actions for non-compliance[37][38] - The company is compliant with cGMP requirements and registered as a device manufacturer and distributor with the FDA[39] - The company is subject to environmental regulations and has made significant investments to comply, but future costs remain uncertain[40] - Potential environmental liabilities could materially impact net income, financial condition, liquidity, or cash flow[41] - The company is compliant with federal and state anti-kickback, self-referral, and false claims laws, but violations could adversely affect stock price and operations[42] - The company is not currently aware of any material legal proceedings or claims[48] Financial and Reporting Status - The company is a smaller reporting company and is not required to disclose certain contractual obligations[50]
NexGel(NXGL) - 2023 Q4 - Annual Report