Crescita Therapeutics Inc. (TSX: CTX and OTC US:
CRRTF) (“Crescita” or the “Company”), a
growth-oriented, innovation-driven Canadian commercial dermatology
company, today reported its financial results for the third quarter
ended September 30, 2023 (“Q3-2023”). All amounts presented are in
thousands of Canadian dollars (“CAD”) unless otherwise noted.
Highlights
For the three and nine months ended September 30, 2023 and up to
the date of this press release:
Financial - Q3-2023 vs. Q3-2022
- Revenue was $3,033 compared to $6,032, down $2,999;
- Gross profit was $1,499 compared to $2,938, down $1,439;
- Operating expenses were $2,880 compared to $2,805, up $75;
- Adjusted EBITDA1 was $(988) compared to $512, down $1,500;
- Ending cash was $10,021, down $205 for the quarter.
Operational
Termination of Agreement with Taro Pharmaceuticals
Inc.
- On October 25, 2023, Taro Pharmaceuticals Inc. (“Taro”)
delivered a notice to terminate the development and
commercialization license agreement for Pliaglis® in the U.S.
market. Our final entitlement to the annual guaranteed minimum
royalties in the amount of US$1.0 million will be recognized in
Q4-2023, with payment expected in Q2-2024.
Update on Manufacturing Segment
- Recent changes in senior management within our largest CMO
customer have caused uncertainty in our order pipeline. As
previously disclosed, certain manufacturing orders initially
scheduled to be delivered in the second half of fiscal 2023 have
been deferred to 2024. Our customer’s new management team indicates
that they are reassessing commercial options for their products in
key markets, which may negatively impact our business with them in
the future. Manufacturing revenue is expected to be materially
lower in the fourth quarter and for the full 2023 fiscal year,
compared to the same periods of 2022. The impact on future sales to
this customer beyond 2023 is uncertain at this time.
“Our results were significantly impacted by headwinds in our
Manufacturing segment as a result of a major customer’s decision to
defer certain purchase orders into 2024. Our customer is now
reassessing its commercial options for the product in its target
markets,” commented Serge Verreault, President and CEO of
Crescita.
Mr. Verreault added, “The termination of the Taro license
agreement for Pliaglis in the U.S. will have an impact on 2024
financial results; but, it also provides an opportunity to secure a
new partner for the product and explore other distribution
alternatives given that Taro has not generated commercial sales of
Pliaglis since Q3-2020. Our skincare business continues to grow
with a 44% increase over last year, and ART FILLER is gaining
momentum through higher adoption by Canadian physicians, in part
due to the positive impact and influence of KOLs.”
Corporate Developments
Normal Course Issuer Bid
- In Q3-2023, the Toronto Stock Exchange (the “TSX”) approved the
Company’s proposed normal course issuer bid (“NCIB”) to purchase up
to a maximum of 1,821,616 common shares (“Common Shares”) for
cancellation. The NCIB commenced on August 31, 2023 and is expected
to terminate on August 30, 2024 or such earlier date as the Company
completes its purchases pursuant to the NCIB or provides notice of
termination. The Company has also entered into an automatic
securities purchase plan in connection with its NCIB. During the
quarter ended September 30, 2023, 355,110 Common Shares were
repurchased for cancellation for cash consideration of $240.
Re-Launch of Alyria® as a Direct-to-Consumer Brand
- We relaunched Alyria® as a direct-to-consumer medical-grade
dermocosmetic brand in the Canadian skincare market in Q1-2023,
following a complete rebranding and various product reformulations.
In Q2-2023, the brand was launched in retail outlets of Familiprix,
a Québec based chain of independently owned pharmacies. Alyria is
primarily targeted at millennials and marketed and sold online in
Canada through Amazon.ca and alyriaskincare.com. The relaunch of
Alyria strengthens our omnichannel expansion and provides the
opportunity to engage with a new consumer group.
The Launch of ART FILLER®
- In Q1-2023, we launched the ART FILLER injectables (the
“Fillers”) in the Canadian medical aesthetic market through our new
dedicated sales force. ART FILLER is an exclusive collection of
dermal fillers made of hyaluronic acid (“HA”), designed to smooth
and fill in wrinkles, and create or restore the volumes and
contours of the face. We distribute the Fillers under an exclusive
Canadian distribution and promotion agreement with Laboratoires
FILLMED.
Q3-2023 Summary Financial Results
Note: Select financial information is outlined below and
should be read in conjunction with Crescita's Condensed
Consolidated Interim Financial Statements and related Management's
Discussion and Analysis (“MD&A”) for the three and nine months
ended September 30, 2023, which are available on SEDAR+ at
www.sedarplus.ca and on Crescita’s website at
www.crescitatherapeutics.com.
In thousands of CAD, except per share data
and number of shares
Three months ended September
30,
Nine months ended September
30,
2023
2022
2023
2022
$
$
$
$
Commercial Skincare
2,412
1,672
7,589
5,600
Licensing and Royalties
163
92
483
319
Manufacturing and Services
458
4,268
4,725
11,576
Revenues
3,033
6,032
12,797
17,495
Cost of goods sold
1,534
3,094
5,493
8,198
Gross profit
1,499
2,938
7,304
9,297
Gross margin (%)
49.4
%
48.7
%
57.1
%
53.1
%
Research and development
143
161
481
449
Selling, general and administrative
2,360
2,286
7,539
7,797
Depreciation and amortization
377
358
1,127
1,094
Total operating expenses
2,880
2,805
9,147
9,340
Operating profit (loss)
(1,381
)
133
(1,843
)
(43
)
Interest expense
21
25
65
134
Interest income
(113
)
(81
)
(350
)
(168
)
Foreign exchange (gain) loss
2
(7
)
23
182
Share of (profit) loss of an associate
(9
)
1
(26
)
30
Net loss on convertible note measured
at
fair value through profit or loss
-
-
22
95
Income (loss) before income
taxes
Deferred income tax expense
(1,282
-
)
195
-
(1,577
259
)
(316
-
)
Net income (loss)
(1,282
)
195
(1,836
)
(316
)
Adjusted EBITDA1
(988
)
512
(613
)
1,224
Earnings (loss) per share
Basic
$
(0.06
)
$
0.01
$
(0.09
)
$
(0.02
)
Diluted
$
(0.06
)
$
0.01
$
(0.09
)
$
(0.02
)
Weighted average number of common
shares outstanding
Basic
20,367,631
20,627,424
20,345,435
20,791,517
Diluted
20,367,631
20,912,159
20,345,435
20,791,517
Selected Balance Sheet
Information
Cash and cash equivalents, end of
period
10,021
10,738
Selected Cash Flow Information
Cash provided by operating activities
125
456
2,337
1,195
Cash used in investing activities
(28
)
(2
)
(28
)
(216
)
Cash used in financing activities
(324
)
(272
)
(524
)
(1,625
)
Revenue
We have three reportable segments: 1) Commercial Skincare
(“Skincare”), which manufactures and sells our branded
non-prescription skincare products for the Canadian and
international markets, and also commercializes Pliaglis®, NCTF®,
ART FILLER®, and Obagi® Medical in Canada; 2) Licensing and
Royalties (“Licensing”), which primarily generates revenue from
licensing our intellectual property related to Pliaglis or our
transdermal delivery technologies; and 3) Manufacturing and
Services (“Manufacturing”), which generates revenue from contract
manufacturing and product development services.
For the three and nine months ended September 30, 2023, total
revenue was $3,033 and $12,797 compared to $6,032 and $17,495 for
the three and nine months ended September 30, 2022. The net
year-over-year decreases of $2,999 and $4,698 were driven by the
Manufacturing segment, where the revenue decrease for the quarter
was mainly due to the deferral of orders previously scheduled to be
delivered in Q3-2023 into fiscal 2024, while the year-to-date
decrease was also impacted by the difference in the timing and
value of orders, including the fulfillment and completion of a
previously announced purchase order of approximately $7.0 million
in 2022. During the same periods, we experienced continued growth
in Commercial Skincare from branded product sales across all
channels, mainly driven by new product launches and promotions,
including the launch of Alyria in select retail outlets in the
province of Québec, and ART FILLER.
Licensing revenue was $163 and $483 for the three and nine
months ended September 30, 2023, compared to $92 and $319 for the
comparable three and nine months of 2022. Licensing revenue of $163
and $483 for the three and nine months ended September 30, 2023
reflected royalties above the annual contractual minimum under our
licensing agreement with Cantabria Labs Inc. (the “Cantabria
Agreement”), product sales from supplying Pliaglis under our
licensing agreement with Egis Pharmaceuticals PLC. In addition,
year-to-date Licensing revenue included a regulatory milestone
payment under our licensing agreement with Croma Pharma GmbH.
Licensing revenue of $92 and $319 for the comparative periods of
the prior year mainly reflected royalties above the annual
contractual minimum under the Cantabria Agreement.
Gross Profit and Gross Margin
For the three months ended September 30, 2023, gross profit was
$1,499, representing a gross margin of 49.4%, compared to $2,938
and 48.7%, respectively, for the three months ended September 30,
2022. The net decrease in gross profit of $1,439 was mainly due to
lower high margin Manufacturing segment revenue.
For the nine months ended September 30, 2023, gross profit was
$7,304, representing a gross margin of 57.1%, compared to $9,297
and 53.1%, respectively, for the nine months ended September 30,
2022. The net decrease in gross profit of $1,993 resulted primarily
from lower high margin Manufacturing segment revenue, while the
gross margin increase of 4.0% was mainly due to favorable product
and channel mix, and to a lesser extent, the favourable impact of
cost savings in the first half of 2023.
Operating Expenses
For the three and nine months ended September 30, 2023, total
operating expenses were $2,880 and $9,147 compared to $2,805 and
$9,340, respectively for the three and nine months ended September
30, 2022. The year-to-date net decrease of $193 was mainly due to
lower headcount-related expenses, partly offset by higher
advertising and promotion spend.
Cash and Cash Equivalents
Cash and cash equivalents were $10,021 at September 30, 2023,
reflecting a decrease of $205 for the quarter.
Non-IFRS Financial Measures
We report our financial results in accordance with International
Financial Reporting Standards (“IFRS”). However, we use certain
non-IFRS financial measures to assess our Company’s performance. We
believe these to be useful to management, investors, and other
financial stakeholders in assessing Crescita’s performance. The
non-IFRS measures used in this press release do not have any
standardized meaning prescribed by IFRS and are therefore not
comparable to similar measures presented by other issuers. These
measures should be considered as supplemental in nature and not as
a substitute for the related financial information prepared in
accordance with IFRS. The following are the Company’s non-IFRS
measures along with their respective definitions:
- EBITDA is defined as earnings before interest, income taxes,
depreciation of property, plant and equipment, and amortization of
right-of-use asset and intangible assets.
- Adjusted EBITDA is defined as earnings before interest, income
taxes, depreciation of property, plant and equipment and
amortization of right-of-use asset and intangible assets, share of
(profit) loss of associates, fair value (gains) losses, share-based
compensation costs, goodwill and intangible asset impairment, and
foreign exchange (gains) losses, as applicable.
Management believes that Adjusted EBITDA is an important measure
of operating performance and cash flow and provides useful
information to investors as it highlights trends in the underlying
business that may not otherwise be apparent when relying solely on
IFRS measures. Below is a reconciliation of EBITDA and Adjusted
EBITDA to their closest IFRS measures.
In thousands of CAD dollars
Three months ended
September 30,
Nine months ended
September 30,
2023
2022
2023
2022
$
$
$
$
Net income (loss)
(1,282
)
195
(1,836
)
(316
)
Adjust for:
Depreciation and amortization
377
358
1,127
1,094
Interest income, net
(92
)
(56
)
(285
)
(34
)
Deferred income tax expense
-
-
259
-
EBITDA
(997
)
497
(735
)
744
Adjust for:
Share-based compensation
16
21
103
173
Foreign exchange (gain) loss
2
(7
)
23
182
Share of (profit) loss of an associate
(9
)
1
(26
)
30
Net loss on convertible note measured
at
fair value through profit or loss
-
-
22
95
Adjusted EBITDA
(988
)
512
(613
)
1,224
Caution Concerning Limitations of Summary Financial Results
Press Release
This summary earnings press release contains limited information
meant to assist the reader in assessing Crescita’s performance, but
it is not a suitable source of information for readers who are
unfamiliar with Crescita and is not in any way a substitute for the
Company's Consolidated Audited Financial Statements and notes
thereto, MD&A and latest Annual Information Form (“AIF”) which
can be found on the Company’s profile on SEDAR+ at
www.sedarplus.ca.
About Crescita Therapeutics Inc.
Crescita (TSX: CTX and OTC US: CRRTF) is a growth-oriented,
innovation-driven Canadian commercial dermatology company with
in-house R&D and manufacturing capabilities. The Company offers
a portfolio of high-quality, science-based non-prescription
skincare products and early to commercial stage prescription
products. We also own multiple proprietary transdermal delivery
platforms that support the development of patented formulations to
facilitate the delivery of active ingredients into or through the
skin. For more information visit, www.crescitatherapeutics.com.
Forward-looking Information
This press release contains “forward-looking information” within
the meaning of applicable securities laws. All information in this
press release, other than statements of current and historical
fact, represents forward-looking information and is qualified by
this cautionary note. Often, but not always, forward-looking
information can be identified by words such as: “anticipate”,
“intend”, “plan”, “goal”, “seek”, “believe”, “aim”, “project”,
“estimate”, “expect”, “strategy”, “future”, “likely”, “may”,
“should”, “will” and similar references to future periods. Examples
of forward-looking information include, but are not limited to,
statements made in this press release under the heading “Financial
Highlights”, and regarding the Company’s objectives, plans, goals,
strategies, growth, performance, operating results, financial
condition, business prospects, opportunities and industry trends,
and similar statements concerning anticipated future events,
results, circumstances, performance or expectations.
Forward-looking information is neither historical fact nor an
assurance of future performance. Instead, it based only on current
beliefs, expectations, and assumptions regarding the future of the
Company’s business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions.
Because forward-looking information relates to the future, it is
subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict and many of which are
outside of the Company’s control.
Crescita’s actual results and financial condition may differ
materially from those indicated in forward-looking information.
Therefore, you should not unduly rely on any forward-looking
information. Important factors that could cause Crescita’s actual
results and financial condition to differ materially from those
indicated in forward-looking information include, among others:
- economic and market conditions including the uncertainty in the
global economy;
- the impact of inflation and rising interest rates together with
the threats of stagflation and recession;
- the Company’s ability to execute its growth strategies;
- the degree or lack of market acceptance of the Company’s
products;
- reliance on third parties for marketing, distribution and
commercialization, and clinical trials;
- the impact of changing conditions in the regulatory environment
and product development processes;
- manufacturing and supply risks;
- increasing competition in the industries in which the Company
operates;
- the Company’s ability to meet its contractual obligations;
- the impact of product liability matters;
- the impact of litigation involving the Company and/or its
products;
- the impact of changes in relationships with customers and
suppliers;
- the degree of intellectual property protection of the Company’s
products;
- the impact of the COVID-19 pandemic and the response thereto of
governments and consumers;
- developments and changes in applicable laws and regulations;
and
- other risk factors described from time to time in the reports
and disclosure documents filed by Crescita with Canadian securities
regulatory agencies and commissions, including the sections
entitled “Risk Factors” in the Company’s most recent annual
MD&A and AIF.
As a result of the foregoing and other factors, no assurance can
be given that future results, levels of activity or achievements
indicated in any forward-looking information will actually be
achieved. Any forward-looking information in this press release is
based only on information currently available to management and
speaks only as of the date on which it is provided. Except as
required by applicable securities laws, Crescita undertakes no
obligation to publicly update any forward-looking information,
whether written or oral, that may be provided from time to time,
whether as a result of new information, future developments or
otherwise.
1 Please refer to the Non-IFRS Financial Measures section of
this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231108801173/en/
FOR MORE INFORMATION, PLEASE CONTACT: Investor Relations
Linda Kisa, CPA, CA Email: lkisa@crescitatx.com
Crescita Therapeutics (TSX:CTX)
過去 株価チャート
から 10 2024 まで 11 2024
Crescita Therapeutics (TSX:CTX)
過去 株価チャート
から 11 2023 まで 11 2024
