Assertio Holdings Inc (ASRT, Financial), a specialty pharmaceutical company, released its financial results for the third quarter ended September 30, 2023, on November 8, 2023. The company faced several challenges during the quarter, including the loss of Indocin exclusivity and lower-than-expected results from Rolvedon, which led to substantial charges impacting net income.
Financial Performance Overview
Assertio reported a marginal increase in net product sales, rising from $34.3 million in Q3 2022 to $35.1 million in Q3 2023. However, the company experienced a significant net loss of $279.5 million for the quarter, a stark contrast to the $4.2 million net income reported in the same period last year. This loss was primarily due to non-cash items, including a $238.8 million charge for loss on impairment of intangible assets. Adjusted EBITDA also saw a decrease, falling from $21.4 million in Q3 2022 to $12.9 million in Q3 2023.
Key Financial Metrics and Commentary
The company's gross margin decreased to 80% from 88% in the prior year's quarter, largely due to inventory step-up amortization for Rolvedon and changes in sales mix. Selling, general, and administrative (SG&A) expenses rose to $21.0 million from $11.9 million, reflecting the costs associated with the acquisition of Spectrum and the addition of Rolvedon and Sympazan to the portfolio.
"Our third quarter results were disappointing, with the loss of Indocin exclusivity and Rolvedon results below expectations driving significant charges to our net income," said Dan Peisert, CEO of Assertio. "Despite these headwinds, Assertio’s innovative non-personal platform continues to drive profitable growth on our other assets."
Balance Sheet and Cash Flow Highlights
Assertio ended the quarter with a cash balance of $76.9 million. The company's convertible debt outstanding principal balance was $40 million, with maturity in September 2027. Cash generated from operating activities for the quarter was $2.6 million, contributing to a year-to-date total of $43.9 million.
Management and Strategic Updates
Assertio announced management changes, including the appointment of Paul Schwichtenberg as Senior Vice President and Ajay Patel as Chief Financial Officer. The company remains committed to improving business performance and building a strategic path for Rolvedon's long-term sustainable growth.
"We have taken immediate steps to improve the business and remain committed to building a strategic path for Rolvedon’s long-term sustainable growth," Peisert added.
Investor Relations and Future Outlook
Assertio's management hosted a conference call to discuss the Q3 2023 financial results, and the details of this call, along with other investor materials, are available on the company's investor relations website.
While Assertio Holdings Inc (ASRT, Financial) faces challenges, the company's strategic adjustments and management updates aim to navigate through the current headwinds and leverage its non-personal platform for future growth. Investors and stakeholders will be watching closely to see how these strategies unfold in the coming quarters.
Explore the complete 8-K earnings release (here) from Assertio Holdings Inc for further details.
