Emmaus Life Sciences Reports Mixed Q3 Results, Net Loss, and Doubts About Future as a Going Concern

Emmaus Life Sciences, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a mixed performance in revenue and profitability. The company generated revenues of $5.5 million for the third quarter, a 9% increase from $5.0 million in the same period of 2023. However, for the nine months ended September 30, 2024, total revenues decreased significantly to $13.4 million, down 41% from $22.5 million in the prior year. This decline is attributed to reduced sales of its primary product, Endari®, in the U.S. market, following the expiration of orphan drug exclusivity and the entry of a generic competitor.

Gross profit for the third quarter increased to $5.1 million, compared to $4.8 million in the prior year, while gross profit for the nine-month period fell to $12.5 million from $21.4 million. Operating expenses decreased to $4.3 million for the third quarter, down from $4.8 million in 2023, and for the nine months, they declined to $13.8 million from $19.2 million. The company reported a net income of $1.8 million for the third quarter, a significant improvement from a net income of $67,000 in the same period last year. However, for the nine months, the net loss narrowed slightly to $4.7 million from $4.9 million in 2023.

As of September 30, 2024, Emmaus had cash and cash equivalents of $1.3 million, a decrease from $1.5 million a year earlier. The company’s total assets were reported at $27.3 million, down from $35.2 million at the end of 2023, while total liabilities remained relatively stable at $81.1 million compared to $82.9 million previously. The stockholders' deficit increased to $53.8 million from $47.8 million.

Strategically, the company has faced challenges due to the competitive landscape, particularly with the launch of a generic version of L-Glutamine oral powder by ANI Pharmaceuticals in July 2024. This has prompted Emmaus to consider reducing the wholesale acquisition cost of Endari® to maintain market share. Additionally, the company has undergone a reduction in its sales force and terminated its Chief Commercialization Officer as part of cost-cutting measures in response to the changing market dynamics.

Emmaus anticipates that its current liabilities will exceed its cash balances and operational cash flow for the foreseeable future, necessitating restructuring or refinancing of existing debt and raising additional funds through loans or equity financing. The company has expressed substantial doubt about its ability to continue as a going concern within the next 12 months, highlighting the need for strategic financial management moving forward.