Pernix Therapeutics Holdings, Inc. (“Pernix” or the “Company”) (NASDAQ MKT: PTX), a specialty pharmaceutical company, today announced financial results for the quarter and year-to-date period ended September 30, 2013.
During the quarter, the Company completed its previously announced agreement to sell certain generic assets owned by its subsidiary, Cypress Pharmaceuticals, to Breckenridge Pharmaceutical, Inc. for $29.7 million. Under the terms of the agreement, Breckenridge paid Pernix approximately $20 million at closing and $9.7 million which is to be paid in two equal installments over the next two years on the anniversary date of the closing. The Company used a portion of the proceeds to pay the balance outstanding under its term loan with MidCap Financial of $7.7 million
Effective August 30, 2013, Pernix licensed rights to the Dr. Cocoa OTC cough product candidate in the United States and Canada to Infirst Healthcare in exchange for a net sales royalty and an opportunity for its subsidiary, Pernix Manufacturing, to supply specified products to Infirst.
Michael Pearce, Chairman and CEO, said, “Q3 was a transitional quarter for Pernix. We bolstered the balance sheet as a result of the Breckenridge non-core asset sale and simplified our business model. We are excited about the prospects for Dr. Cocoa under the auspices of Infirst CEO Manfred Scheske, formerly the president of consumer health for Glaxo Smith Kline, and backed by investment giant Invesco.” Regarding Pernix financial performance, Pearce added, “We made important progress on expense reduction. Sequentially, SG&A in Q3 decreased significantly from Q2 and there will be more gains to come. Revenue performance was not satisfactory and is being addressed organizationally and from a product perspective.”
For the third quarter 2013, net sales increased by approximately 1% to $18.3 million, compared to $18.1 million for the same period in the prior year. The Company experienced growth in net revenues due to sales revenues of branded and generic products that the Company acquired from Cypress Hawthorn and the Silenor product acquired in the merger with Somaxon. The increase from the acquired products was offset by a decrease in the Company’s legacy portfolio of products which was due in part to the discontinuation of certain brand and generic cough and cold products that had been recalled and of certain generic products as a result of related litigation settlement terms. As it relates to revenue contribution, 50% of our revenue was from generic product sales and 50% was from brand product sales.