Petros Pharmaceuticals, Inc., a leading provider of therapeutics for men’s health, today announced financial results for the first quarter ended March 31, 2021.
First Quarter Highlights:
“Petros’s performance during the first quarter of 2021 significantly outpaced the same period from 2020, a pre-COVID comparator that provides us reason for optimism going into the rest of 2021 after a significant sector-wide downturn during the majority of 2020. The Company enjoyed a 300% increase in STENDRA net sales year-over-year and prescriptions increased both year-over-year and over Q4 2020 – an all-time high since Petros began marketing STENDRA. We believe this, in part, results from our streamlining of internal processes and cost-cutting measures, combined with implementing improved sales and marketing initiatives. In addition, the Company enjoyed an emerging post-COVID optimism from prescribers, consumers and distribution channels, which created a favorable environment for increased prescriptions,” stated Fady Boctor, Petros Pharmaceuticals’ President and Chief Commercial Officer.
“The Company continues to follow multiple tracks to achieve success, including the pursuit of a possible approval for over-the-counter usage for STENDRA®, as well as new and expanded labeling, which will provide increased flexibility in patient access. We are also exploring several new opportunities from a sales and marketing perspective that we believe will result in improving awareness and demand for the product. In the meantime, we continue to explore additional opportunities to expand our product offering, focusing on the overall men’s health market.”
Q1 2021 Financial Results
Net sales for the first quarter ended March 31, 2021 were $4.1 million, composed of $3.2 million of net sales from Prescription Medicines and net sales of $0.9 million from Medical Devices. This compares to net sales for the quarter ended March 31, 2020, which were $1.8 million composed of $0.8 million of net sales from Prescription Medicines and net sales of $1.0 million from Medical Devices. Prescription Medicines consists primarily of STENDRA®, which is indicated for male erectile dysfunction and Medical Devices includes Vacuum Erection Devices (“VEDs”) and associated accessories and products. The Prescription Medicines segment net sales increased 301% year-over-year in the first quarter, driven by higher wholesaler and prescription demand coupled with sales allowance efficiencies and reductions as described below. The Medical Device segment declined 12% year-over-year due to a strategic shift in Direct to Consumer promotion, opening international markets and Business to Business distributor partnerships.
Net sales improved significantly to 55.4% of gross sales in the first quarter of 2021, up from 32.9% in the year-ago period. This increase was driven primarily by an improvement in product returns and lower contract rebates as well as lower distribution service fees and coupon redemptions, slightly offset by higher chargebacks and cash discounts.
Gross profit for the first quarter of 2021 was $3.4 million, composed of $2.8 million of gross profit from Prescription Medicines and $0.6 million from Medical Devices. Gross profit for the first quarter of 2020 was $1 million, composed of $0.3 million of gross profit from Prescription Medicines and $0.7 million from Medical Devices. Overall gross margins increased to 84.2%, up from 56.2% in the prior-year period, an increase of 2800 basis points. This increase was driven by gross margins from prescription medicines increasing to 87.8%, up from 37.2% in the prior-year period. Gross margins from the medical devices segment was flat from the prior year at approximately 71%. Gross margins also benefited from the mix shift of a higher portion of revenues coming from its higher margin medical device segment, which increased from 44.5% in the first quarter of 2020 to 78.5% in the first quarter of 2021.
Selling, general and administrative expenses for the first quarter of 2021 were $3.9 million, composed of $1.7 million of selling, general and administrative expenses of the Prescription Medicines segment, $0.6 million of selling, general and administrative expenses of the Medical Devices segment and $1.6 million of general corporate expenses.
In contrast, selling, general and administrative expenses for the first quarter of 2020 were $4.8 million, composed of $3.1 million of selling, general and administrative expenses of the Prescription Medicines segment, $0.7 million of selling, general and administrative expenses of the Medical Devices segment and $0.9 million of general corporate expenses.
The 19% decrease in selling, general and administrative expenses in the first quarter of 2021 compared to the year-ago period were primarily driven by lower payroll expenses and direct marketing expenses as management sought to optimize spend and reduce expenses due to an evolving COVID-19 marketplace; partially offset by increased accounting and legal fees associated with the Metuchen acquisition.
Research and development expenses for the first quarter of 2021 were $19,000 versus $139,000 in the prior-year period.
Operating loss for the first quarter of 2021 was $2.2 million versus $5.6 million in the year-ago period. The improvement in operating loss was driven by higher gross profit and lower operating expenses, primarily selling, general and administrative expenses.
The Company generated net income for the current fiscal quarter versus a net loss for the comparable year ago period. Net Income for the first quarter of 2021 was $3.0 million, up from a net loss of $6.1 million in the first quarter of 2020. The improvement in net income was primarily due to increased net sales and margins, lower operating expenses and a change in the fair value of derivative liability of positive $5.4 million, which represents the earnout related to the Metuchen acquisition.
Adjusted EBITDA was a loss of $0.5 million in the first quarter of 2021 versus a loss of $4.0 million in the first quarter of 2020. The improvement in the first quarter of 2021 adjusted EBITDA loss resulted from net sales improvements and operating efficiencies as noted above.
Cash totaled $14.6 million at March 31, 2021, compared to $17.1 million at December 31, 2020.
About Petros Pharmaceuticals
Petros Pharmaceuticals is committed to the goal of becoming a world-leading specialized men’s health company by identifying, developing, acquiring, and commercializing innovative therapeutics for men’s health issues including, but not limited to erectile dysfunction, endothelial dysfunction, psychosexual and psychosocial ailments, Peyronie’s disease, hormone health and substance use disorders.