Cornerstone Therapeutics Inc. (Nasdaq: CRTX) today reported financial results for the second quarter and six months ended June 30, 2010.
Total net revenues were $28.5 million for the second quarter of 2010, representing a 14% increase over the $25.0 million reported for the second quarter last year. Total net revenues for the first six months of 2010 were $64.9 million compared to the $55.7 million for the first six months of 2009.
Net product sales from strategic products were 64% of total net revenues, or $18.1 million, for the second quarter, a substantial increase from the 20% of total net revenues for the second quarter of 2009. For the first six months of 2010, net product sales from strategic products were 55% of total net revenue, or $35.6 million, compared to 25% of net revenues for the same period in prior year.
Cornerstone continues to grow revenues from its strategic specialty products with sustainable growth potential. In order to focus on these efforts, the Company has decided to cease manufacturing and distribution of its marketed unapproved products by the end of 2010. Cornerstone believes that this reinforces its commitment to its strategy and positions the Company well to obtain NDA and ANDA approvals for its pipeline products. Cornerstone also believes it is well positioned to manage this transition as the Company expects to begin to generate revenues from its lead pipeline product in 2011. Following the discontinuance of its marketed unapproved products, the only legacy products that will continue to be manufactured and distributed will be its propoxyphene/acetaminophen products, which are marketed subject to approved NDAs or ANDAs.
"Cornerstone has made significant progress over the last two quarters toward becoming a leading specialty pharma company in respiratory and related markets," said Craig A. Collard, Cornerstone's President and Chief Executive Officer. "We continue to advance our pipeline and to execute our plan of transitioning our business away from unapproved products, which has allowed us to cease the manufacturing and distribution of these products by the end of 2010."
Gross margin was 71% and 77% for the three and six months ended June 30, 2010, respectively, compared to 88% and 89% for the comparable periods of 2009. The lower gross margins compared to the prior periods were due to a relatively higher portion of our net product sales in 2010 being derived from products that have lower gross margins, specifically Curosurf®.
Selling, general and administrative expenses increased $1.2 million, or 10%, in the second quarter of 2010 compared to the second quarter of 2009 and $4.4 million, or 21%, for the six months ended June 30, 2010 compared to the same period in prior year. The increase in selling, general and administrative expenses was primarily due to the addition of our hospital sales force in September of 2009, partially offset by reduced legal and consulting costs in the three and six months ended June 30, 2010, as compared to the three and six months ended June 30, 2009 when we incurred significant expenses related to the acquisition of Curosurf.
Royalty expenses decreased $3.0 million, or 53%, during the second quarter of 2010 compared to the second quarter of 2009 and decreased $4.7 million, or 39%, for the first six months of 2010 compared to the same period in prior year. The reduction in royalty expense was primarily due to the reduction in revenue from one of our legacy products, offset by royalties for Factive® and Zyflo CR®. GAAP net loss was $400,000 for the second quarter of 2010, or net income of $2.5 million on a non-GAAP basis. GAAP net income was $4.6 million for the first six months of 2010, or $9.4 million on a non-GAAP basis.
As of June 30, 2010, the Company had $46.4 million in cash and cash equivalents, an increase of $27.6 million compared to December 31, 2009.
Cornerstone Therapeutics Inc.