LANGHORNE, PA — NEXGEL, Inc. (NASDAQ: “NXGL”) this week announced its financial results for the third quarter ended September 30, 2023.
Adam Levy, NEXGEL’s Chief Executive Officer, commented, “We are pleased to deliver yet another record revenue quarter of $1.2 million, an increase of 115% year-over-year, driven by growth year-over-year in both contract manufacturing and branded consumer products. Importantly, gross margins during the third quarter improved sequentially to 28.2% as compared to 15.0% in the prior second quarter. Our net loss also continued to trend lower quarter-over-quarter, in line with our goal to become profitable in 2024.”
Mr. Levy continued, “We have a lot to be excited about as we near the close of 2023 and head into the new year. Given our growth into retail with Enigma Health as well as partnerships with AbbVie and others, we have strategically invested in inventory and equipment to increase capacity and automation to meet the significant increase in demand we expect for our proprietary hydrogels. We expect our revenue growth year-over-year, margin expansion and net loss decrease trend to continue in the short term as we optimize our operations and growth opportunities come to fruition.”
Operational Highlights in 2023
- NEXGEL’s subsidiary, CG Converting and Packaging, executed a new supply agreement with AbbVie (NYSE: ABBV), a global biopharmaceutical company to be a supplier of gel pads with AbbVie’s Rapid Acoustic Pulse device being investigated for improvement in the appearance of cellulite.
- Announced a new strategic relationship with Enigma Health, a new joint venture company, for retail distribution and marketing services in North America.
Third Quarter 2023 Financial Highlights
For the third quarter of 2023, revenue totaled $1.2 million, an increase of $653 thousand or 115%, as compared to $568 thousand for the same period the year prior. The quarterly increase in overall revenues was primarily due to sales growth in contract manufacturing and branded products year-over-year, including revenue contribution from the joint venture formed with C.G. Laboratories.
Gross profit for the third quarter of 2023 was $344 thousand, compared to a gross profit of $148 thousand for the same prior year period. Gross profit margin for the third quarter of 2023 was 28.2% as compared to 26.1% for the same period the year prior. Gross profit margin increased sequentially to 28.2% during the third quarter of 2023 as compared to 15.0% during the second quarter of 2022.
Total operating expenses, including R&D and SG&A expenses, decreased to $956 thousand for the three months ended September 30, 2023, compared to $1,185 thousand for the prior year period. The year-over-year decrease was attributable to a decrease in total SG&A and the completion of development efforts of two proof of concept studies for drug delivery candidates utilizing our hydrogel technology.
Net loss for the quarter ended September 30, 2023, improved to $550 thousand or $0.10 per basic and diluted share, compared to net loss of $1.2 million or $0.22 per basic and diluted share for the same period in 2022. Net loss also improved sequentially to $550 thousand during the third quarter of 2023 as compared to $642 thousand during the second quarter of 2023.
As of September 30, 2023, NEXGEL had approximately $3.3 million of cash. The delta between our improved net loss during the quarter and net cash decrease period over period relates to an increase in account receivables, and property, plant and equipment investments.
As of November 13, 2023, NEXGEL had 5,717,629 shares of common stock outstanding.
Additional information is available on NEXGEL’s Investor Relations site: ir.nexgel.com.
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