ImmuCell Corp., a growing animal health company that develops, manufactures and markets scientifically proven products that improve the health and productivity of dairy and beef cattle, has announced its unaudited financial results for the third quarter ended Sept. 30.
During the three-month period ended Sept. 30, 2017, total product sales were just over $2 million, an increase of 2% compared to just under $2 million during the same quarter of 2016. During the nine-month period ended Sept. 30, 2017, total product sales were just under $7.3 million, compared to just over $7.3 million during the same period of 2016 -- a decrease of less than 1%.
The company said year-to-year comparisons of product sales are impacted by the 2016 shipments of an order backlog and sales of a product that was discontinued during the first quarter of 2017. Excluding the shipments of orders that were in backlog as of Dec. 31, 2015, and sales of the discontinued product, sales during the first nine months of 2017 would have increased by 8%, in comparison to the same period during 2016.
Sales of the First Defense product line were reported as increased (decreased) by 7%, 1% and (4%) during the three-month, nine-month and twelve-month periods ended Sept. 30, respectively, in comparison to the same periods ended Sept. 30, 2016.
Net (loss) was ($339,000), or (7 cents) per share, for the third quarter of 2017 in comparison to a net income of $35,000, or $0.01 per diluted share, during the third quarter of 2016.
Net income was $27,000, or $0.01 per diluted share, during the nine-month period ended Sept. 30, 2017, in comparison to $478,000, or 11 cents per diluted share, during the nine-month period ended Sept. 30, 2016.
Due to a sharp increase in sales (caused, in part, by the lack of supply to the market of a competitive product during late 2014 and into the middle of 2015), the company said it experienced a backlog of orders from early 2015 and through the middle of 2016, before doubling its production capacity. Since the third quarter of 2016, the company has had sufficient available inventory and is shipping in accordance with the current demand of its distributors.
“Building on these third quarter results, we expect to report positive sales growth during the fourth quarter of 2017, over both the third quarter of 2017 and the fourth quarter of 2016,” said Michael F. Brigham, president and chief executive officer. “We are preparing to move forward into 2018 with an expanded product line (subject to the anticipated approval of First Defense Tri-Shield) and with the impacts of both the order backlog and of the discontinuation of the topical wipes product line out of our prior-year comparatives.”
Cash, cash equivalents and short-term investments decreased to $2.3 million at Sept. 30, as the company continued the build-out of its new manufacturing facility, compared to $10.6 million at Dec. 31, 2016.
Net working capital decreased to $2.7 million on Sept. 30 from $12.3 million as of Dec. 31, 2016. Stockholders’ equity increased to $21 million on Sept. 30 from $19.7 million on Dec. 31, 2016.
New product formulation
From a product development and regulatory standpoint, the company also announced that, on Nov. 13, it received approval of First Defense Tri-Shield, a new formulation that combines the existing First Defense bivalent claims (against Escherichia coli and coronavirus) with a guaranteed minimum level of rotavirus antibody content in a gel tube delivery format. ImmuCell said this unique breadth of claims further differentiates its product from competitive calf-level products on the market that have claims against both coronavirus and rotavirus or just E. coli or just coronavirus, but not all three. It also allows the company to better compete in the larger dam-level scours preventative market space.
ImmuCell’s new marketing campaign, ‘Beyond Vaccination,’ suggests that, by delivering immediate immunity directly to the calf via First Defense Tri-Shield, producers can avoid using such vaccines at dry-off and provide more consistent protection to the calf at the calf level.
Nisin production facility
ImmuCell further noted that a certificate of occupancy was issued by the city of Portland, Maine, on Oct. 30 for its nisin production facility. On Nov. 8, the company held a ribbon-cutting ceremony to celebrate the completion of the construction phase of this $21 million project.
ImmuCell will use this facility to produce purified, pharmaceutical-grade nisin drug substance at commercial scale. Adherence to the company’s anticipated timeline could lead to potential approval by the end of 2019, with subsequent market launch.
“Implementing nisin production at commercial scale is the most critical action in front of us on the path to regulatory approval of our novel treatment for subclinical mastitis,” Brigham said. “Completing the facility construction in accordance with our timeline was an important milestone on the road to commercialization of this product.”
Approximately $14.6 million was invested in the nisin production facility project through Sept. 30. The company said it expects to pay for the remaining $6.2 million of budgeted expenditures (that were unpaid as of Sept. 30) with its $2.3 million of cash on hand as of Sept. 30 and its $4.3 million of available bank debt and cash flows from operations.
Nisin is a bacteriocin that is not used in human medicines and would not contribute to the ongoing concern that the widespread use of antibiotics could encourage the growth of antibiotic-resistant bacteria (“superbugs”), ImmuCell noted.