Petros Pharmaceuticals(US:PTPI)2021-11-15 22:01Licensing and Agreements - Petros entered into a License Agreement with Vivus for the commercialization of Stendra® for a one-time fee of $70 million, granting rights to sell in the U.S., Canada, South America, and India [149]. - Petros acquired an exclusive global license for H100™, a topical formulation for treating Peyronie's disease, with various payments totaling $1.05 million made to Hybrid Medical LLC for the license [151]. - The company will pay MTPC a royalty of 5% on the first $500 million of net sales of Stendra® and 6% thereafter until patent expiration in April 2025 [161]. Sales and Revenue - Net sales for the three months ended September 30, 2021, were $2,145,169, a decrease of 38% compared to $3,464,695 in the same period in 2020 [186]. - Prescription Medicines net sales were $1,377,291 for the three months ended September 30, 2021, down from $2,590,151 in 2020, primarily due to increased sales allowances [186][191]. - Net sales for the nine months ended September 30, 2021, were $8,678,424, a 31% increase compared to $6,630,180 for the same period in 2020 [213][219]. - Gross billings for the nine months ended September 30, 2021, were $22,202,615, compared to $13,919,650 for the same period in 2020, representing a 59.5% increase [283]. - Net sales for the nine months ended September 30, 2021, were $8,678,424, up from $6,630,180 in 2020, reflecting a 30.8% increase [283]. Expenses and Losses - The Company incurred a loss from operations of $3,596,617 for the three months ended September 30, 2021, compared to a loss of $2,336,421 in the same period in 2020 [185]. - The Company’s total operating expenses for the three months ended September 30, 2021, were $5,422,628, an increase from $4,819,213 in 2020 [185]. - The Company’s net loss for the three months ended September 30, 2021, was $1,696,898, compared to a net loss of $3,300,363 in the same period in 2020 [185]. - The net loss for the nine months ended September 30, 2021, was $800,734, compared to a net loss of $15,197,953 for the same period in 2020 [212]. - The company reported a net loss of $800,734 for the nine months ended September 30, 2021, significantly reduced from a net loss of $15,147,953 in 2020 [265]. Cost Management - Cost of sales decreased by $662,745 or 68% during the three months ended September 30, 2021, compared to the same period in 2020, with cost of sales as a percentage of net sales dropping from 28% to 15% [194]. - Gross profit for the three months ended September 30, 2021, was $1,826,011, representing an increase to 85% of net sales compared to 72% in 2020 [195]. - Gross profit for the nine months ended September 30, 2021, was $7,322,586, representing 84% of net sales, compared to $4,325,011 or 65% for the same period in 2020 [223]. - Cost of sales for the nine months ended September 30, 2021, was $1,355,838, a decrease of $949,331 or 41% compared to $2,305,169 for the same period in 2020 [222]. Research and Development - The Prescription Medications segment primarily consists of Stendra®, with expenses related to the development of H100™, which is in early development stages and has not yet sought FDA approval [159]. - Research and development expenses for the three months ended September 30, 2021, were $280,576, an increase of $243,748 or 662% compared to the same period in 2020 [203]. - Research and development expenses for the nine months ended September 30, 2021, were $799,803, an increase of $492,007 or 160% compared to $307,796 for the same period in 2020 [231]. - The company expects to incur approximately $14 million in research and development expenses related to H100™ over the estimated four to six-year period prior to FDA approval [247]. Operational Adjustments - The company reduced its sales representative headcount in March 2020 due to COVID-19, maintaining a core team that engaged with physicians via telephone and videoconference [154]. - The COVID-19 pandemic may continue to negatively impact the company's sales and operations in fiscal 2021 and beyond [153]. - The decrease in Medical Device sales was attributed to decreased demand in both domestic and international markets [191]. Financial Position and Cash Flow - The company reported a cash balance of $8,135,184 as of September 30, 2021, down from $17,139,694 at December 31, 2020 [240]. - The company experienced net cash used in operating activities of $3,557,732 for the nine months ended September 30, 2021, compared to $10,782,430 in 2020, indicating an improvement [264]. - Net cash used in financing activities for the nine months ended September 30, 2021, was $5,446,778, consisting of payments of senior debt of $4,912,541 and a senior debt end-of-term fee of $534,237 [268]. - Interest expense on senior debt for the nine months ended September 30, 2021, was $356,873, a decrease of $728,474 or 67% from $1,085,347 in 2020, due to a pay down of $6.4 million of senior debt [237]. Strategic Initiatives - The company has engaged in a national non-personal promotion campaign reaching nearly 30,000 healthcare professionals to enhance product awareness [150]. - The company is negotiating with multiple contract manufacturers to replace Vivus for the supply of Stendra® [163]. - The company plans to explore additional ways to raise capital, including public or private equity or debt financings, to support its business strategy [253]. - The company is focused on expanding its service offerings through internal development, collaborations, and strategic acquisitions [254]. - The company issued 3,323,616 shares of common stock in October 2021, receiving approximately $5.5 million in net proceeds for expansion and working capital [249]. - The company repaid the remaining balance of its senior debt on November 3, 2021 [260].