Petros Pharmaceuticals(PTPI) - 2022 Q2 - Quarterly Report

Licensing and Product Development - Petros Pharmaceuticals acquired the license for Stendra® for a one-time fee of $70 million, granting exclusive rights to sell in the U.S., Canada, South America, and India[125] - The company is developing H100™, a topical formulation for Peyronie's disease, having paid a total of $250,000 in initial and milestone payments, with additional annual payments due[141] - The company is conducting non-clinical studies for FDA approval of Stendra® for OTC use in treating erectile dysfunction[125] - Petros has entered into a Technology Transfer Service Agreement with Patheon Pharmaceuticals for the commercial production of Stendra® tablets[138] Financial Performance - For the six months ended June 30, 2022, net sales increased to $6,651,685 from $6,533,255 in the same period of 2021, representing a growth of approximately 1.8%[164] - The company recorded a gross profit of $5,530,125 for the six months ended June 30, 2022, compared to $5,496,575 in 2021, indicating a slight increase in profitability[164] - The company reported a loss from operations of $(2,142,618) for the six months ended June 30, 2022, an improvement from a loss of $(6,478,199) in the prior year[164] - The company experienced net losses and negative cash flows from operations since inception, with an accumulated deficit of $73 million as of June 30, 2022[221] - The company reported a net loss of $1,986,016 for the six months ended June 30, 2022, compared to a net income of $896,164 for the same period in 2021[246] Sales and Revenue Breakdown - Prescription Medicines accounted for $4,856,941 of net sales, while Medical Devices contributed $1,794,744 for the six months ended June 30, 2022[165] - Net sales for the six months ended June 30, 2022, were $6,651,685, a 2% increase from $6,533,255 in the same period of 2021, driven by a $6,479 increase in Stendra® sales and a $111,951 increase in Medical Device sales[170] - Gross billings for the six months ended June 30, 2022, were $16,785,478, up from $13,671,607 in the same period of 2021, indicating a growth in total demand for products[258] - The company reported gross billings of $10,273,597 for the three months ended June 30, 2022, compared to $6,135,885 for the same period in 2021, reflecting a strong quarterly performance[258] Operating Expenses and Cash Flow - Operating expenses decreased significantly to $7,672,743 in 2022 from $11,974,774 in 2021, primarily due to a gain on settlement with Vivus of $3,389,941[164] - Selling, general and administrative expenses decreased by $883,548 or 11% during the six months ended June 30, 2022, totaling $7,114,342[179] - Net cash used in operating activities for the six months ended June 30, 2022, was $9,475,509, compared to $2,346,366 for the same period in 2021, reflecting a significant increase in cash outflow[245] - The company utilized $1,076,974 in financing activities for the six months ended June 30, 2022, primarily for prepayments of a promissory note[248] Research and Development - Research and development expenses increased by $307,375 or 59% during the six months ended June 30, 2022, totaling $826,602, primarily due to increased clinical development expenses[184] - The company expects to incur approximately $14 million of research and development expenses relating to H100™ over the estimated four to six-year period prior to FDA approval[227] Debt and Financial Obligations - The principal amount of the promissory note to Vivus is $10,201,758, with a 6% annual interest rate, payable in quarterly installments until January 1, 2027[145] - As of June 30, 2022, the principal balance on the promissory note is $10,024,785, with interest expense recorded at $(303,398) for the period[145] - The company recognized a gain on settlement with Vivus, decreasing total liabilities by $3,389,941 during the six months ended June 30, 2022[180] - The company has a promissory note with a principal amount of $10,201,758 as part of a settlement agreement, indicating ongoing financial obligations[237] Market and Strategic Outlook - The company anticipates continued significant sales growth from newly manufactured products and ongoing investments in research and development related to Stendra®[160] - The company is exploring additional financing options to support product development and operations, indicating a proactive approach to capital raising[235] - The company is focused on expanding its service offerings through internal development, collaborations, and strategic acquisitions, highlighting its growth strategy[236] - The company anticipates needing to raise additional funds or curtail discretionary expenditures after August 16, 2023, to maintain an appropriate level of cash for operations[221] Challenges and Compliance - Petros has faced challenges with the Health Canada approval process for Stendra® due to a Notice of Deficiency issued in April 2020[140] - The company has a compliance period until December 19, 2022, to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share[146] Miscellaneous - The company has retained approximately $7.3 million of API inventory under the Vivus Supply Agreement, which is expected to support future sales[142] - The company has not entered into any off-balance sheet financial guarantees, maintaining a conservative financial position[249] - The company is classified as a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[260] - No specific financial performance metrics or user data were disclosed in the conference call[260] - Future outlook and performance guidance were not provided due to the company's reporting status[260] - There were no mentions of new product or technology developments in the conference call[260] - Market expansion and acquisition strategies were not discussed in the provided content[260] - Other strategic initiatives were not highlighted in the conference call[260] - The company did not disclose any revenue figures or growth percentages[260] - No information regarding user data or customer metrics was available[260] - The company did not provide any insights into competitive positioning or market trends[260] - Overall, the content lacks detailed financial data and strategic insights[260]