Gyre Therapeutics Reports Decline in Revenue and Operating Income in Q3 2024, Despite Strategic Progress

Gyre Therapeutics, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a decline in revenue and operating income compared to the previous fiscal period. For the three months ended September 30, 2024, the company generated revenues of $25.5 million, a decrease of 20% from $32.0 million in the same period of 2023. For the nine months, revenues totaled $77.9 million, down 10% from $86.3 million year-over-year. The decline in revenue was primarily attributed to decreased sales of its key product, ETUARY, which accounted for 99.2% of total revenue.

Operating expenses for the third quarter increased to $21.3 million from $19.3 million in the prior year, leading to a significant drop in income from operations to $4.2 million, down 67% from $12.8 million. The net income for the third quarter was $2.9 million, a 62% decrease from $7.5 million in the same quarter of 2023. However, for the nine-month period, net income rose to $17.3 million, up 12% from $15.5 million, driven by improved net income attributable to common stockholders, which increased by 51% to $12.2 million.

The company’s financial position showed mixed results. Cash and cash equivalents decreased to $15.9 million from $33.5 million at the end of 2023, while total assets increased to $125.2 million from $116.5 million. The accumulated deficit improved to $73.4 million from $85.5 million, and total stockholders’ equity rose significantly to $63.2 million from a deficit of $15.8 million at the end of 2023.

Strategically, Gyre completed a reverse asset acquisition of Continent Pharmaceuticals Inc. on October 30, 2023, which has positioned the company for future growth. The company also plans to launch new products, including nintedanib and avatrombopag, in early 2025 to bolster revenue streams. Additionally, Gyre Pharmaceuticals is advancing its lead candidate, F351, through clinical trials, with a Phase 3 trial ongoing in China and plans for a Phase 2 trial in the U.S. in 2025.

The company has faced challenges, including internal control issues that may affect financial reporting and compliance. Management believes that existing cash and access to capital markets will be sufficient to fund operations for at least the next 12 months.