SINGAPORE (Feb 12): Specialty pharmaceutical and nutraceutical firm iX Biopharma has reported a net loss of $3.6 million in 2Q19, an increase of 11% compared to a net loss of $3.2 million in 2Q18.
This brings its net losses for 1H19 to $6.8 million, 7% higher than a net loss of $6.4 million in 1H18.
During the quarter, revenue fell by 12% to $1.5 million from $1.8 million a year ago.
The drop in revenue was mainly attributed to lower contribution from the group’s chemical analysis division, which saw a 15% y-o-y decrease to $1.4 million due to the preparation for the nationwide launch of the Entity product range in 4Q19.
This required the group to accelerate its product development, especially laboratory testing for the purpose of registering with the TGA and product release to the market. Accordingly, the group prioritised and allocated substantial resources from its chemical analysis division to provide the necessary TGA and GMP compliant laboratory testing services.
The decrease in revenue was partially offset by higher contribution from the group’s specialty pharmaceutical and nutraceuticals divisions.
As cost of sales increased by 12% y-o-y to $1.3 million, gross profit for 2Q19 came in at $0.2 million, 60% lower than $0.6 million in the previous year.
Other income also decreased by 43% to $0.2 million from $0.4 million last year.
Total expenses for the quarter dropped by 3% y-o-y to $4.1 million, mainly due to lower expenses for the group’s research and development segment.
As at end-Dec, the group’s cash and cash equivalents stood at $11.4 million.
Over the next 12 months, the group plans to undertake sales and marketing initiatives in Australia to promote the Entity products and increase the number of retailers across Australia in preparation for an official launch of Entity in 4Q19.
In addition, the group expects its chemical analysis and testing business in Australia to face increasing competition ahead, which will add uncertainty to the industry and resultant pressure on the group’s revenue.
In order to maintain its chemical analysis division’s competitive position and continue to achieve growth, the group will require additional capital investment and human resources. It is also assessing its corporate strategy for the chemical analysis division in light of the anticipated trend.
As at 4.40pm, shares in iX Biopharma are trading 2.22% lower at 22 cents.
