Procaps Group S.A. (NASDAQ: PROC) witnessed a notable upswing of 13.71% in its stock value, concluding the trading session at $3.98 on Tuesday. This positive momentum can be attributed to the disclosure of its quarterly financial results.
For the fiscal third quarter ending on September 30, 2023 ("3Q23"), Procaps (PROC) unveiled its financial performance, revealing net revenues amounting to $118 million, marking a 2% increase. The RX and OTC portfolios played a pivotal role in bolstering revenues, although this impact was mitigated by diminished revenues from the CDMO sector.
PROC reported a gross profit of $68 million, accompanied by a 58% gross margin, primarily influenced by elevated costs and the product mix. The Adjusted EBITDA stood at $22 million, with an associated margin of 19%.
Following a challenging first half of the year, the third quarter signaled a positive turnaround for Procaps. The company expressed optimism in its robust operational execution and the strategic refinement undertaken to fortify its organizational resilience against short-term challenges. Procaps continues to adapt its strategies to navigate the dynamic business landscape, safeguarding profitability.
Encouragingly, positive trends are emerging in 4Q23, paving the way for improved results compared to 4Q22. In a strategic move during the quarter, Procaps entered into an agreement with BDR Pharmaceuticals for 27 oncology molecules in Latin America, including 20 TKIs (Tyrosine Kinase Inhibitors). Under this arrangement, PROC assumes responsibility for registration, branding, marketing, and commercialization across Latin America.
This strategic collaboration aims to enhance PROC's oncology portfolio in the region, fostering partnerships and potentially expanding the array of cancer treatment options for both patients and physicians. To meet the heightened demand for its advanced gummy technologies in the global nutraceutical industry, Procaps is diligently proceeding with the expansion of its U.S. operations.
The construction of a new gummy manufacturing facility in Florida is underway, with operations expected to commence in 1Q24, followed by revenue generation later in the quarter. PROC is also exploring the development of new products, particularly high-potency compounds, to leverage the production capacity of approximately 1.8 billion softgel capsules per year in the West Palm Beach facility, catering to its iCDMO business unit.