Cipher Pharmaceuticals Inc (CPHRF) Q4 2024 Earnings Call Highlights: Record Revenue Surge and ...

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Thu, Mar 20, 2025, 1:02 AM 5 min read

Total Net Revenue (Q4 2024): $11.8 million, up 141% from the prior year.
Product Revenue (Q4 2024): $10.5 million, up 209% from the prior year.
Natroba Revenue (Q4 2024): $6.5 million.
Epuris Revenue (Q4 2024): $3.5 million, up 21% from the prior year.
Licensing Revenue (Q4 2024): $1.4 million, down 7% from the prior year.
Gross Margin (Q4 2024): 77%, up from 72% in the prior year.
Selling, General and Administrative Expenses (Q4 2024): $5.7 million, up $4.4 million from the prior year.
Adjusted EBITDA (Q4 2024): $5 million, up 73% from the prior year.
Cash Generated (Q4 2024): $8.3 million, ending with $17.8 million in cash on hand.
Total Net Revenue (Full Year 2024): $33.4 million, up 58% from 2023.
Product Revenue (Full Year 2024): $26.7 million, up 111% from 2023.
Epuris Revenue (Full Year 2024): $13 million, up 20% from 2023.
Licensing Revenue (Full Year 2024): $6.6 million, down 22% from 2023.
Gross Margin (Full Year 2024): 76%, up from 68% in 2023.
Selling, General and Administrative Expenses (Full Year 2024): $15 million, up $9.3 million from 2023.
Adjusted EBITDA (Full Year 2024): $15.7 million, up 23% from 2023.
Cash Increase (Full Year 2024): $9.9 million post-Natroba acquisition.

Warning! GuruFocus has detected 3 Warning Signs with CPHRF.

Release Date: March 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Cipher Pharmaceuticals Inc (CPHRF) reported a significant increase in total net revenue for Q4 2024, reaching $11.8 million, a 141% increase compared to the same quarter in the prior year.
Product revenue for Q4 2024 was $10.5 million, a 209% increase from the previous year, driven by the acquisition of the Natroba business.
Epuris product revenue in Canada grew by 21% in Q4 2024, contributing to an overall increase in sales volumes and market share.
The acquisition of the Natroba business has provided a strong platform for growth in the US market, with plans to expand into other markets.
Cipher Pharmaceuticals Inc (CPHRF) has a strong cash position, ending Q4 2024 with $17.8 million in cash, supported by strong cash flows from both the base business and the Natroba acquisition.

Negative Points

Licensing revenue decreased by 7% in Q4 2024 compared to the prior year, primarily due to a decline in the Absorica portfolio in the US.
The company experienced a decrease in market share for the Absorica portfolio, dropping to 6% as of December 31, 2024, from 6.9% the previous year.
Selling, general, and administrative expenses increased significantly to $5.7 million in Q4 2024, primarily due to costs associated with the Natroba acquisition and ongoing operations.
The transition from a co-promotion partner for Natroba had a temporary negative impact on sales and earnings towards the end of 2024.
Legal costs related to a contractual arbitration process contributed to increased expenses, impacting the company's financial results.

Q & A Highlights

Q: Now that your Natroba co-promote is done, how many sales reps and MSLs do you currently have? A: After completing the co-promotion transition, we have 30 external reps, 12 inside sales reps, and about five management employees. - Brian Rosenberger, Vice President - Alliance and Strategic Portfolio Management

Q: Based on targeting high permethrin prescribers, how do they view Natroba? A: The reception is very strong because Natroba offers a complete cure in one treatment for scabies, unlike permethrin, which is 40 years old. This makes it appealing to physicians who have had limited options. - Brian Rosenberger, Vice President - Alliance and Strategic Portfolio Management

Q: Can you elaborate on how out-licensing of Natroba is going in terms of timing? A: We are on schedule and in discussions with eight parties in different regions. We have advanced discussions with a potential partner in China and a Middle Eastern company. We are optimistic about securing deals soon. - Craig Mull, Interim Chief Executive Officer

Q: Will the fees related to M&A and fair value adjustment of inventory roll off next quarter? A: Yes, these will roll off, with some impact in Q1 of 2025, but at a far reduced level than in the past two quarters. - Ryan Mailling, Chief Financial Officer

Q: Are you able to quantify the onetime items expected? A: Unfortunately, I can't quantify that number right now, but it will be reduced compared to what we were seeing. - Ryan Mailling, Chief Financial Officer

Q: What was generated for the business organically, and what contributed from the tax loss balance? A: We have $154 million of tax losses remaining, and about $11 million was utilized in the quarter. These can be applied to both Canadian and US businesses. - Ryan Mailling, Chief Financial Officer

Q: What is the target market share for Natroba, given the current 23% share? A: We are seeing steady growth and gaining physician demand. Our script growth targets are in the low to mid-double-digit range. We are focused on gaining share in the scabies segment. - Brian Rosenberger, Vice President - Alliance and Strategic Portfolio Management

Q: Can you quantify the total size of the scabies market? A: The total antiparasitic market is about 1.1 million scripts, with the scabies portion around 500 to 600 TRxs. The market size is approximately $165 million. - Brian Rosenberger, Vice President - Alliance and Strategic Portfolio Management

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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