Pernix Therapeutics Holdings, Inc. ("Pernix") (NYSE Amex: PTX), a specialty pharmaceutical company primarily focused on the pediatric market, today announced financial results for the first quarter of 2011.
For the first quarter of 2011, net revenues increased by approximately 14% to $10.1 million compared to $8.9 million for the first quarter of 2010. For the first quarter of 2011, net revenues included a Medicaid rebate provision on prior year sales of approximately $1.1 million. The increase in net revenues of 14% was due primarily to higher sales of the Company's branded products which included the successful launch of the new Cedax formulation, and certain generic products, as well as revenue from collaborations.
Net income for the first quarter of 2011 was approximately $1.0 million, or $0.04 per basic and diluted share, as compared to $5.3 million, or $0.24 per basic and diluted share, for the first quarter of 2010. Net income for the first quarter of 2010 included one-time benefits associated with the termination of Pernix's S corporation election and the recognition of net operating loss carry forwards associated with the March 9, 2010 reverse merger with Golf Trust of America, Inc.; therefore, the net income for the quarters ended March 31, 2011 and 2010 are not directly comparable. The decrease in net income was primarily due to the increase in selling, general and administrative expenses of approximately $1.8 million, or 57%, quarter over quarter, due to the investment in the Company's operating infrastructure through the addition of several key management positions and the doubling of the sales team during 2010. Amortization expense increased to $471,000 for the first quarter of 2011, as compared to $55,000 for the first quarter of 2010. The increase is due to the amortization under certain commercial agreements, including the Company's acquisitions of Cedax and Macoven in 2010. The Company also recognized approximately $330,000 in expenses related to its joint venture with SEEK during the first quarter of 2011. For the first quarter of 2011, the Company recognized an income tax expense of $0.7 million, as compared to an income tax benefit of $1.0 million for the first quarter of 2010.
Earnings before interest, taxes, depreciation and amortization (EBITDA, non-GAAP measure) was approximately $2.2 million for the first quarter of 2011 compared to approximately $4.3 million for the first quarter of 2010. See the reconciliation tables at the end of this press release for a reconciliation of EBITDA to GAAP net income.
Cooper Collins, President and Chief Executive Officer of Pernix, stated, "We are pleased with our solid performance in the first quarter of 2011, which was primarily due to the successful launch of our new 180 mg Cedax oral suspension formulation in January 2011 and growth in our generic business. We continue to evaluate strategic opportunities to acquire and in-license products that will generate future growth, broaden and diversify our product line, mitigate seasonality, and reduce Medicaid rebate sensitivity on our overall product portfolio. We believe the investment in our infrastructure and sales force expansion provides the foundation for exponential sales growth in the future."
Pernix launched the 180 mg oral suspension of Cedax® (ceftibuten) formulation in January 2011, which is being promoted by the Company's sales force of approximately 55 sales representatives. Cedax is a once-a-day, oral, third-generation cephalosporin. Cedax is expected to continue to be an important growth driver in 2011 for the Company.
Natroba™ (spinosad) Topical Suspension, 0.9%
The Company expects to market Natroba™ with its pediatric sales force beginning in the summer of 2011. Natroba™ received U.S. Food and Drug Administration (FDA) approval as a prescription medication and is indicated for the topical treatment of head lice infestations in patients four years of age and older. Under the terms of the exclusive co-promotion agreement with ParaPRO LLC, Pernix expects to receive payments between 35%-42% of the net sales by Pernix.
Theobromine (BC 1036)
On March 24, 2011, Pernix announced the appointment by its joint venture with SEEK, a leading U.K. drug discovery and development group, of JP Morgan Cassenove as financial advisor in connection with an auction of the Theobromine (BC 1036) assets. The auction for the global commercialization rights (excluding Korea) of Theobromine is still in process. Theobromine (BC1036) is an antitussive drug candidate in late-stage development that addresses the significant need for a non-opioid, non-codeine treatment for persistent cough. The Company's decision to sell or otherwise transfer the Theobromine assets in an auction will depend on the terms of any offers the joint venture may receive. Pernix makes no guarantee that it will receive any offers in an auction of these assets, or that such offers will be made on terms acceptable to the joint venture.
As previously announced, a pivotal Phase III trial for Theobromine is expected to begin in the European market in the second half of 2011. The joint venture is also in ongoing discussions with the FDA to determine the clinical trial program and regulatory requirements for Theobromine in the United States.
As of March 31, 2011, the Company had approximately $13.0 million of cash and borrowing availability of approximately $4.0 million under its revolving line of credit.
Pernix Therapeutics Holdings, Inc.