Release Date: February 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Acrux Ltd (ASX:ACR, Financial) received another FDA approval for Dapsone 5% gel, an acne treatment, in June last year.
- The company has 15 products in its portfolio, with 6 approved and 2 currently generating revenue.
- Acrux Ltd (ASX:ACR) monetized Lenzetto for EUR 4.1 million in January last year.
- The company is actively reviewing the market for additional products to add to its pipeline.
- Acrux Ltd (ASX:ACR) expects continued revenue growth from products like Prilocaine and Lidocaine cream and new products like Dapsone gel.
Negative Points
- The profit and loss before tax is slightly lower than last year.
- Two products that were previously generating revenue are no longer doing so.
- Supply chain issues and long lead times for components like preprinted tubes have delayed product launches.
- The company had to kill two early-stage projects in December due to economic and competitive factors.
- Market share for Prilocaine and Lidocaine has been inconsistent due to supply chain challenges.
Q & A Highlights
Q: What is the impact of AI on Acrux's business model? Do you consider AI to be an opportunity or a threat?
A: Michael Kotsanis, CEO: AI is seen as an opportunity for the industry. It can significantly improve efficiency in data-heavy processes like dossier preparation and regulatory reviews. AI could potentially speed up review times and approvals by working 24/7. However, some aspects, like stability testing, will still require traditional methods.
Q: What happens between the approval and launch of Dapsone 5% gel?
A: Michael Kotsanis, CEO: Post-approval, supply chain issues, especially lead times for components like preprinted tubes, have been a challenge. These lead times have extended significantly post-COVID. However, the product is now available, and we expect to launch it soon.
Q: Why has the number of products in the portfolio reduced?
A: Michael Kotsanis, CEO: We regularly review our portfolio using IQVIA data and other market insights. If a product's economics or competitive landscape changes unfavorably, we may decide to discontinue it. This is a healthy practice to ensure a robust and viable pipeline.
Q: Can you expand on the expectations for Prilocaine and Lidocaine for the next calendar year?
A: Michael Kotsanis, CEO: The market for Prilocaine and Lidocaine is around 3 million packs per year. We have been working diligently with our partners to capture the increased market share after a competitor exited. We expect consistent supply and increased revenue from this product.
Q: Why has Efinaconazole not been launched yet, and what is the current addressable market?
A: Michael Kotsanis, CEO: Efinaconazole's addressable market is around USD 419 million. The delay in launch is due to patent litigation settlements, which include agreed launch dates that we cannot disclose. The actual market size might be closer to USD 150 million due to gross-to-net discounts.
Q: What is the underlying licensing income from Prilocaine and Lidocaine for the recent period, and what market share has been achieved?
A: Michael Kotsanis, CEO: The profit share for the first half was $481,000, which includes ongoing royalties. Market share has fluctuated due to supply inconsistencies, but we expect it to stabilize and increase with improved supply chain management.
Q: What are the key objectives for Acrux this year?
A: Michael Kotsanis, CEO: Key objectives include launching Dapsone 5% gel, continuing revenue growth from existing products, gaining FDA approval for additional products, and adding new products to our pipeline.
Q: How does Acrux choose new products to add to its pipeline?
A: Michael Kotsanis, CEO: We review market data, FDA guidance, and competitive landscapes. Proposals are put to the board, and we aim to add products that align with our expertise in transdermal and topical drugs.
Q: What are the financial highlights for the half-year?
A: Joanna Johnson, CFO: Revenue growth was driven by Prilocaine and Lidocaine. The profit and loss before tax showed slight improvement, reflecting revenue growth and timing of R&D expenses. We expect continued growth from new product launches and FDA approvals.
Q: What is the status of the products currently under FDA review?
A: Michael Kotsanis, CEO: We have three products under FDA review: Dapsone 7.5% gel, Acyclovir cream, and nitroglycerin ointment. We are addressing FDA questions and are optimistic about their approval in the near future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
