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Petros Pharmaceuticals, Inc. (PTPI)·Q3 2022 Earnings Summary

Executive Summary

  • Q3 2022 was exceptionally weak due to expired STENDRA returns and a $7.46M intangible asset impairment, driving net sales to $(1.46)M and a net loss of $(13.83)M; diluted EPS was $(0.67) .
  • Management expects lower returns over the next two quarters and a significant drop-off thereafter as refreshed STENDRA inventory with a four-year shelf life replaces older stock; focus shifts to pursuing OTC access for STENDRA while rationalizing costs .
  • Segment mix: Prescription Medicines net sales were $(2.1)M (returns-related), while Medical Devices were $0.7M; gross profit was $(2.2)M and $0.4M, respectively .
  • Strategic positives include FDA label expansion for STENDRA to include post‑radical prostatectomy data and a highlighted third‑party study showing rapid onset (~15 minutes), but monetization was overwhelmed by the return cycle and impairment charge .
  • No Q3 earnings call transcript or numeric guidance found; consensus estimates from S&P Global unavailable today, so beat/miss cannot be assessed .

What Went Well and What Went Wrong

What Went Well

  • FDA approval expanded the STENDRA label to include positive clinical trial data in men post‑radical prostatectomy, supporting broader clinical positioning .
  • Management reiterated a clear strategy to pursue OTC status for STENDRA to expand addressable market and access, with plans to rationalize costs and manage cash prudently .
  • Q2 2022 demonstrated that when supply issues ease, demand can rebound (net sales $4.19M; first quarter of positive Adjusted EBITDA at ~$0.20M), showing potential operating leverage under normalized conditions .

What Went Wrong

  • Q3 net sales fell to $(1.46)M due to “excessive returns” as a large batch expired; segment net sales for Prescription Medicines were $(2.1)M versus $3.3M in Q2 .
  • A $7.46M intangible asset impairment drove operating expenses to $11.93M and loss from operations to $(13.67)M; net loss widened to $(13.83)M .
  • Gross profit swung to $(1.74)M (from $3.54M in Q2), reflecting the returns and impairment dynamics; Medical Devices could not offset Prescription Medicines headwinds .

Financial Results

MetricQ3 2021Q1 2022Q2 2022Q3 2022
Revenue (Net sales, $USD Millions)$2.145 $2.465 $4.187 $(1.458)
Gross Profit ($USD Millions)$1.826 $1.993 $3.537 $(1.744)
SG&A ($USD Millions)$3.413 $3.898 $3.217 $2.171
R&D ($USD Millions)$0.281 $0.405 $0.421 $0.736
Depreciation & Amortization ($USD Millions)$1.729 $1.561 $1.729 $1.561
Intangible Asset Impairment ($USD Millions)— — — $7.460
Net Income (Loss) ($USD Millions)$(1.697) $(0.174) $(1.812) $(13.830)
Diluted EPS ($USD)$(0.17) $(0.01) $(0.22) $(0.67)

Segment net sales

Segment Net Sales ($USD Millions)Q1 2022Q2 2022Q3 2022
Prescription Medicines$1.525 $3.300 $(2.100)
Medical Devices$0.940 $0.900 $0.700

Segment gross profit

Segment Gross Profit ($USD Millions)Q1 2022Q2 2022Q3 2022
Prescription Medicines$1.387 $3.000 $(2.200)
Medical Devices$0.606 $0.500 $0.400

KPIs and liquidity

KPIQ1 2022Q2 2022Q3 2022
Adjusted EBITDA ($USD Millions)$(2.310) $0.202 $(4.343)
Cash And Equivalents ($USD Millions)$17.672 $13.295 $11.182

Notes:

  • Q3 YoY revenue declined from $2.145M to $(1.458)M due to expired‑product returns and impairment impact .
  • Q/Q revenue fell sharply from $4.187M in Q2 to $(1.458)M in Q3 on returns and batch expiration .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
STENDRA returns trajectoryNext 2 quartersNot providedLower returns expected over next two quarters, then significant drop-off as inventory fully refreshed to 4-year shelf-life Directional improvement
STENDRA strategyOngoingNot providedPrimary focus on achieving OTC access to expand market; continue marketing and sales, with cost rationalization and prudent cash management Strategic shift/prioritization
Formal financial guidanceQ3/FY 2022Not providedNone provided in documents reviewed Maintained (no formal guidance)

Earnings Call Themes & Trends

No Q3 2022 earnings call transcript was found in the document catalog; themes below reflect press releases and filings.

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Supply/returns & shelf lifeQ1: higher coupons/returns amid supply challenges; working to resolve with new supply . Q2: replenishment to wholesalers; shelf life extended to four years .Excessive returns drove negative net sales; expectation of lower returns over next two quarters and significant drop-off thereafter as refreshed inventory takes hold .Improving over next 1–2 quarters (directional)
STENDRA OTC pathwayQ2: positive OTC label comprehension study; continue FDA work .OTC pursuit is the “primary objective” to expand access and market size .Intensifying focus
Regulatory/labelQ2: OTC study positive; H-100 505(b)(2) pathway announced .FDA label expansion to include post‑radical prostatectomy data .Positive development
R&D execution (H-100)Q2: pursuing 505(b)(2) pathway; milestones detailed .Continued emphasis on men’s health pipeline; R&D spend increased YoY .Ongoing investment
Macro/COVID channel mixQ1: shift to telehealth channels with lower margins impacting net revenues .Not specifically updated in Q3 PR; returns and impairment dominate narrative .Neutral/less prominent in Q3 commentary

Management Commentary

  • “Our third quarter sales of STENDRA were negatively impacted by excessive returns, driven by removing expired product from our distributers… by early next year we expect to have completely replaced our older STENDRA inventory with recently manufactured product, which has a longer shelf life thus reducing the impact of returns in the future.” — Fady Boctor, President and CCO .
  • “Our primary objective will be achieving OTC access for this drug, significantly expanding the market and providing access to the general population of men suffering from erectile dysfunction… we are rationalizing costs to optimize the efficiency of our operations and will manage cash prudently to achieve that goal.” — Fady Boctor .
  • Q2 perspective for context: “Our ability to achieve positive adjusted EBITDA… is a testament to the organizational improvements we have made to operate as a lean and efficient company.” — Fady Boctor .

Q&A Highlights

  • No Q3 2022 earnings call transcript found; no Q&A to report from primary-source documents .

Estimates Context

  • S&P Global (Capital IQ) consensus EPS and revenue for Q3 2022 were unavailable today; accordingly, we cannot assess beat/miss versus Street estimates from primary sources. Any future estimate comparison will anchor to S&P Global consensus when accessible.

Key Takeaways for Investors

  • Returns cycle and impairment dominated Q3: expect a normalization path as refreshed 4‑year shelf‑life inventory replaces expired batches over the next two quarters; monitor Rx net sales recovery trajectory .
  • Strategic pivot: OTC pathway for STENDRA is now the primary focus—if successful, it could materially expand the addressable market; track FDA interactions and study milestones .
  • Label expansion is a clinical/marketing asset: inclusion of post‑prostatectomy data strengthens physician messaging and payer positioning .
  • Cost discipline: SG&A cut YoY/Q/Q amid restructuring; watch whether reduced OpEx sustains without impairing commercialization or R&D .
  • Liquidity trend: cash declined from $13.30M in Q2 to $11.18M in Q3; balance funding needs for OTC pursuit and pipeline against cash burn .
  • Segment lens: Medical Devices contributed positive net sales and gross profit, but the near‑term equity story hinges on normalizing STENDRA returns and reigniting Rx revenue .
  • Tactical trading: catalysts include tangible updates on OTC pathway progress and evidence of return rate normalization in Q4–Q1; risk remains around execution on regulatory timelines and inventory/returns resolution .