Name: MyMD Pharmaceuticals, Inc. Q3 2018 Earnings Call
Start: 2018-11-15T00:00:00.000Z

Executive Summary

Q3 2018 revenue declined 18% year over year to $0.557M as license fees fell to zero and MPC-related sales turned negative due to the OxiChek withdrawal; however, core PIFA Heparin/PF4 Rapid Assay product revenue rose 16% on improved antigen yields and backorder fulfillment .
Gross margin compressed to 14% from 52% a year ago, primarily driven by a $218,799 OxiChek inventory write-off tied to litigation, while operating expenses surged on legal, accounting and one-time settlement charges, widening the net loss to $3.084M .
Management implemented an 8-for-1 reverse split, raised ~$2.0M (Nov. 2) and initiated a strategic alternatives review to maximize shareholder value, with increased focus on the PIFA platform; CEO Howard Yeaton reiterated operational focus and sales expansion via ISRs .
Near-term stock catalysts stem from the strategic alternatives process and continuing NASDAQ compliance following the reverse split; litigation resolution removes an overhang but materially impacted Q3 profitability via the $930,000 settlement .

What Went Well and What Went Wrong

What Went Well
- PIFA product revenue rose 16% YoY to $567,262, with domestic distributor sales up to $529,860 as antigen yields improved and backorders were filled .
- Management sharpened strategic focus on the PIFA platform and expanded ISR coverage (39 states as of YTD), supporting sales outreach and market education in HIT testing .
- CEO’s commentary underscored improved antigen yields, backorder fulfillment, and a stronger balance sheet to evaluate strategic alternatives: “I am pleased to report growth in revenues of our core PIFA Heparin PF/4 Rapid Assay... An offering... for gross proceeds of $2 million... helps to place the Company in a strong position to evaluate strategic alternatives” .
What Went Wrong
- MPC segment revenue turned negative to $(18,798) due to OxiChek inventory repurchase and contraction in Breath Alcohol product sales, removing revenue and triggering write-offs .
- Gross margin fell to 14% (from 52%) largely because of a $218,799 OxiChek write-off; cost of sales rose to $476,453 vs $323,526 a year ago .
- Operating expenses escalated: G&A jumped 222% YoY (legal, accounting, NetSuite implementation, $930,000 settlement, $100,000 lump sum to each independent director), pressuring operating loss to $(3.124)M .

Metric	Q3 2017	Q2 2018	Q3 2018
Revenue ($USD)	$675,831	$526,601	$557,089
Gross Margin %	52%	42%	14%
Operating Loss ($USD)	$(1,177,576)	$(2,113,197)	$(3,124,300)
Net Loss ($USD)	$(1,177,644)	$(2,067,453)	$(3,083,949)
Diluted EPS ($USD)	$(1.04)	$(0.02)	$(0.26)
Net Income Margin %	(174.3%)	(392.7%)	(553.6%)

Segment/Product Revenue Breakdown

Product Line ($USD)	Q3 2017	Q2 2018	Q3 2018
PIFA (Heparin/PF4)	$490,058	$356,082	$567,262
MPC (Metron/Breath/ OxiChek)	$104,094	$106,680	$(18,798)
REA (Tri-Cholesterol)	$27,500	$45,100	$0
Other	$16,679	$18,739	$8,625
Total Revenue	$638,331	$526,601	$557,089

KPIs and Operating Drivers

KPI	Q3 2017	Q2 2018	Q3 2018
Domestic PIFA sales via distributors ($USD)	$441,676	$327,556	$529,860
OxiChek inventory write-off ($USD)	$0	n/a	$218,799
G&A Expense ($USD)	$819,565	$1,565,602	$2,636,651
Sales & Marketing Expense ($USD)	$377,091	$469,469	$364,641
R&D Expense ($USD)	$290,447	$259,124	$160,867
Cash + Marketable Securities ($USD, period-end)	n/a	$8,253,538	$6,167,451

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4 outlook	None provided	None provided; management emphasized focus on PIFA commercialization and market education	Maintained qualitative focus
Gross Margin %	FY/Q4 outlook	None provided	None numerical; margin impacted by OxiChek write-off in Q3	Maintained qualitative commentary
Operating Expenses	FY/Q4 outlook	None provided	No numeric guidance; noted legal/accounting and NetSuite costs; litigation settlement one-time	Maintained qualitative commentary
Strategic actions	Corporate	n/a	Strategic alternatives review initiated; reverse split; equity raise	New process announced

Topic	Previous Mentions (Q1 2018, Q2 2018)	Current Period (Q3 2018)	Trend
Antigen yields & backorders (PIFA)	Low yields caused backorders; process adjustments underway	Yields improved; all backorders filled, validation/testing ongoing	Improving operational execution
Distribution/ISR coverage	300+ reps via Cardinal/Thermo/Stago; ISR expansion	ISR strategy continues; domestic PIFA distributor sales rose YoY	Strengthening channel
Litigation (Pulse/OxiChek)	Trial scheduled Nov.; ongoing legal expense	Settlement paid $930,000; permanent injunction; OxiChek withdrawn	Resolved with material cost
NASDAQ compliance	Late filings and equity plan issues addressed; extension granted	Reverse split executed; bid-price compliance pursued	De-risking listing status
Strategy focus	Broad platform set (MPC/REA/PIFA)	Focus pivot to PIFA platform commercialization; explore new PIFA deployments	Sharpened focus
Strategic alternatives	n/a	Formal review to maximize shareholder value (including business combinations)	New corporate initiative

“I am pleased to report growth in revenues of our core PIFA Heparin PF/4 Rapid Assay products... enabling us to fill all backorders... working primarily on the commercialization of our Particle Immuno-Filtration Assay (PIFA®) Technology platform... [and] strong position to evaluate strategic alternatives to maximize shareholder value” — Howard R. Yeaton, CEO and interim CFO .

No Q3 2018 earnings call transcript was available; no Q&A themes identified [ListDocuments earnings-call-transcript: none].

Wall Street consensus from S&P Global Capital IQ was unavailable for MYMD (mapping failure); consequently, comparisons vs consensus EPS/revenue could not be retrieved. We attempted to fetch “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for Q3 2018 but received a mapping error (SpgiEstimatesError) indicating missing CIQ mapping for MYMD. Values retrieved from S&P Global were unavailable.

Core PIFA franchise is the growth and strategic focus; domestic distributor sales and improved antigen yields underpin a rebuilding of the revenue base even as ancillary segments (MPC/OxiChek) are curtailed .
The quarter’s margin and loss profile were heavily impacted by OxiChek-related write-offs and a $930,000 settlement—non-recurring items that should abate, though legal/accounting run-rate remains elevated near term .
Strategic alternatives and the reverse split/financing stabilize listing/compliance and liquidity; any corporate action outcome is a potential catalyst, with operational execution on PIFA the fundamental driver .
Near-term thesis: watch gross margin recovery and sustained PIFA sell-through via ISRs/distributors; reduced R&D and S&M suggest tighter cost control, but G&A requires monitoring given prior restatement and control remediation .
Risk factors include customer concentration and supply-chain sensitivity (antigen yields), plus ongoing NASDAQ compliance and litigation exposure (class actions) despite OxiChek settlement .
Without available consensus data, position sizing should emphasize operational leading indicators (PIFA revenue growth, margin normalization, legal cost trajectory) until estimates can be benchmarked.