Emmaus Life Sciences, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending March 31, 2024. The company experienced a substantial decline in revenue, with net revenues of $2.5 million, a decrease of 63% from $6.8 million in the same period of 2023. This decline was primarily attributed to a shortage of finished goods inventory due to delays from its sole packager, which impacted sales. The company anticipates resolving these packaging delays, which had resulted in an order backlog of approximately $4.6 million as of May 2024.

The gross profit for the quarter was $2.2 million, down from $6.3 million a year earlier. Operating expenses decreased to $5.0 million from $7.5 million, but the loss from operations widened to $2.7 million compared to a loss of $1.2 million in the prior year. The net loss for the quarter was $4.3 million, an increase from a net loss of $3.5 million in Q1 2023. Comprehensive loss also rose to $6.1 million from $3.8 million year-over-year.

As of March 31, 2024, the company reported total current assets of $7.8 million, down from $11.5 million at the end of 2023, while total assets decreased to $29.5 million from $35.2 million. The total stockholders’ deficit increased to $53.6 million from $47.8 million. Cash and cash equivalents were reported at $1.7 million, a decline from $2.5 million at the end of 2023.

Emmaus continues to rely on its sole product, Endari®, which is approved for reducing acute complications of sickle cell disease. However, the expiration of market exclusivity in the U.S. on July 7, 2024, and the introduction of a generic version by ANI Pharmaceuticals, Inc. on July 15, 2024, pose significant risks to future sales. The company is also facing challenges related to reimbursement rates from third-party payors and governmental healthcare programs, which could further impact its financial performance.

To address its financial needs, Emmaus may need to restructure or refinance existing debt and raise additional funds through loans and equity financing. The company has expressed substantial doubt about its ability to continue as a going concern for the next 12 months, highlighting the urgency of its financial situation.