Executive Summary

Q1 2022 net sales were $2.47M, down 40% year over year on lower STENDRA® volumes from couponing and short‑dated returns, but up sequentially vs Q3 2021; gross margin remained high at 81% .
Net loss was $(0.17)M (EPS $(0.01)), versus net income of $3.01M (EPS $0.31) in Q1 2021; results included a $3.39M non‑recurring gain from the Vivus settlement and $0.15M interest on the new promissory note .
Strategic supply actions progressed: Vivus released ~50% of bulk tablets on an open PO, and Petros initiated a technology transfer to Patheon/Thermo Fisher to onshore STENDRA® production (potential medium‑term margin/supply benefits) .
OTC pathway and men’s health awareness initiatives continued; management reiterated confidence and highlighted cash of $17.7M at quarter‑end, sufficient to fund operations through at least May 2023 per 10‑Q liquidity disclosure .
Wall Street consensus estimates from S&P Global were unavailable at time of this analysis due to data access limits; no earnings call transcript was found for Q1 2022 [GetEstimates error noted] [ListDocuments earnings-call-transcript=0].

What Went Well and What Went Wrong

What Went Well
- Vivus settlement reduced current liabilities and recognized a $3.39M gain, while securing near‑term inventory release and clarifying a payment schedule (6% interest) on a $10.20M note .
- Segment resilience: Medical Devices net sales rose year‑over‑year to $0.94M (from $0.87M), and international sales increased to $0.42M (from $0.37M) .
- Management continued OTC/self‑selection studies and external awareness programs, emphasizing addressable market expansion and operational optimization; “We believe that attaining OTC status may dramatically expand our addressable STENDRA® market” .
What Went Wrong
- Net sales fell 40% YoY to $2.47M, driven by increased coupon redemptions to sustain wholesale demand during supply resolution and higher returns from short‑dated product; Prescription Medicines net sales declined by $1.68M YoY .
- Cash used in operations was $(5.28)M; interest expense on the Vivus promissory note was $0.15M; derivative fair‑value change impacted results (non‑cash) .
- Continued lower margin mix with telehealth/online channels and elevated sales deductions, reflected in gross billings dynamics and Adjusted EBITDA deterioration to $(2.31)M .

Financial Results

Metric	Q1 2021	Q3 2021	Q1 2022
Net Sales ($USD)	$4,075,606	$2,145,169	$2,465,169
Cost of Sales ($USD)	$643,386	$319,158	$472,340
Gross Profit ($USD)	$3,432,220	$1,826,011	$1,992,829
Gross Margin (%)	84%	85%	81%
Net Income (Loss) ($USD)	$3,009,081	$(1,696,898)	$(174,224)
Basic & Diluted EPS ($USD)	$0.31	$(0.17)	$(0.01)

Segment breakdown (Q1 2022):

Segment	Net Sales ($USD)	Cost of Goods Sold ($USD)	Gross Profit ($USD)
Prescription Medications	$1,524,768	$138,181	$1,386,587
Medical Devices	$940,401	$334,159	$606,242
Total	$2,465,169	$472,340	$1,992,829

KPIs and non‑GAAP:

KPI	Q1 2021	Q1 2022
Adjusted EBITDA ($USD)	$(468,678)	$(2,310,269)
Gross Billings ($USD)	$7,535,723	$6,511,881
Coupon Redemptions ($USD)	$946,378	$2,351,285

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2 onward	Not provided	Not provided	Maintained: No formal guidance disclosed in Q1 2022 materials
Gross Margin	FY/Q2 onward	Not provided	Not provided	Maintained: No formal guidance disclosed
OpEx	FY/Q2 onward	Not provided	Not provided	Maintained: No formal guidance disclosed
Manufacturing Transfer Milestones	2022	—	Tech transfer initiated with Patheon; bulk tablet release 50% under Vivus settlement conditions	Operational update (not numeric guidance)

Earnings Call Themes & Trends

(No Q1 2022 earnings call transcript found; themes synthesized from filings.)

Topic	Previous Mentions (Q2 2021)	Previous Mentions (Q3 2021)	Current Period (Q1 2022)	Trend
Supply chain / STENDRA® availability	Recovery from 2019 FDA letter; strong wholesaler demand; DSAs and returns management	Manufacturing delay on 100mg led to allowances; expectation to resolve in Q4 2021	Vivus settlement released ~50% bulk tablets; promissory note; Patheon tech transfer to U.S. manufacturing	Improving supply continuity medium‑term
OTC / Technology initiatives	OTC strategy investment and label comprehension/self‑selection planning	Continued OTC strategy spend; consulting fees rising	Two self‑selection studies launched; OTC pathway emphasized by management	Progressing
Customer concentration / channel mix	High concentration with major distributors; shift to online channels with lower margins	4 main customers ~98% RX gross sales; allowances elevated	Online/telehealth mix continues; sales deductions high (coupon redemptions)	Persistent headwind
Returns / sales deductions	Reserves high; product returns significant	Returns and price protection elevated	Short‑dated returns affected Q1 net sales; returns reserve $3.76M	Normalizing post‑settlement
COVID / macro	Ongoing uncertainty; office closure; remote operations	Ongoing uncertainty	Continued caution; online sales impact gross margins	Stabilizing operations

Management Commentary

“We are also working diligently with the U.S. Food and Drug Administration (FDA) to achieve over‑the‑counter status for our lead erectile dysfunction drug, STENDRA®. We believe that attaining OTC status may dramatically expand our addressable STENDRA® market…” .
“We ended the year with a strong cash position of approximately $24 million, providing us with flexibility as we execute on our business plan” (context for entering Q1) .
Q1 2022 operational detail: Patheon technology transfer initiated to establish and validate commercial production in Cincinnati, Ohio, and Vivus settlement terms unlocking near‑term inventory and setting secured promissory note obligations .

Q&A Highlights

No Q1 2022 earnings call transcript was found; therefore, no analyst Q&A highlights or guidance clarifications are available in source documents [ListDocuments earnings-call-transcript=0].

Estimates Context

S&P Global/Capital IQ consensus estimates for Q1 2022 EPS and revenue were unavailable at the time of analysis due to data access limits. As a result, comparisons to Wall Street consensus cannot be provided for this quarter [GetEstimates error noted].

Key Takeaways for Investors

The Vivus settlement and Patheon tech transfer reduce near‑term supply risk and create a path to onshored manufacturing—potential medium‑term margin and reliability benefits; monitor execution milestones and Note payments (6% interest) .
Top‑line pressure is driven by couponing and short‑dated returns; however, sequential improvement vs Q3 2021 and resilient device/international sales suggest stabilization while supply normalizes .
Non‑GAAP metrics weakened (Adjusted EBITDA $(2.31)M) as sales deductions (coupon redemptions $2.35M) remained elevated; watch mix shift back to in‑person channels to support margins .
Liquidity remains adequate (cash $17.7M; working capital $16.5M), but operating cash burn was significant in Q1; continued discipline around SG&A and R&D pacing is important while pursuing OTC ambitions .
OTC pathway progress (self‑selection studies, label work) is a potential medium‑term catalyst; any FDA engagement milestones (pre‑IND/OTC discussions) will be key narrative drivers .
Customer and channel concentration persist; ongoing diversification of distribution and return reserve normalization should reduce volatility in net sales .
No formal guidance or consensus benchmarking this quarter; reliance on filings emphasizes operational execution and milestone tracking rather than near‑term guide‑driven catalysts .

Petros Pharmaceuticals, Inc. (PTPI)·Q1 2022 Earnings Summary