Crescita Therapeutics reports record $22.3m in annual revenue

• Crescita Therapeutics (TSX:CTX) has reported a record C$22.3 million in revenue for fiscal 2019, an increase of 34.3 per cent
• The increase was driven primarily by the company’s out-licensing business, which contributed 60.4 per cent
• The launch of the Dermazulene range in China also drove an increase in product sales
• Operating expenses for the year were up 4.2 per cent to $17.37 million
• Crescita Therapeutics (CTX) is currently down 13.33 per cent to $0.65, with a market cap of $13.47 million

Crescita Therapeutics (TSX:CTX) has reported a record C$22.3 million in revenue for fiscal 2019, an increase of 34.3 per cent.

The commercial dermatology company cited the increased performance of its out-licensing business, which contributed 60.4 per cent to overall revenue.

This was due to an April 2019 agreement with Cantabria Labs, which has driven both up-front payments and minimum royalties. The agreement pertained to the distribution of Crescita’s Pliaglis product throughout Italy, Portugal, France, and Spain.

Another driving factor was the launch of the company’s Dermazulene range in the Chinese market, which bolstered overall product sales.

However, despite the significant spike in revenue, operating expenses were also up 4.2 per cent to $17.37 million.

Crescita attributed the increase in expenses to greater research and development efforts, as well as an increase in the cost of goods sold. Higher amortization and depreciation charges also played a part.

Serge Verreault, President and CEO of Crescita, said that he was proud of the results for fiscal 2019.

“We had some tailwinds during the year which added significantly to our top and bottom line growth. We also proved that we could deliver organic growth through geographic expansion when we launched our first brand in China.

“Over the last year, we were successful in laying the groundwork for growth platforms that we believe will generate revenues in 2020 and beyond,” he added.

So far this year, Crescita has received positive topline results from two key Phase 3 clinical trials for its CTX-101 product, an ultra-potent topical corticosteroid.

The company also announced a distribution agreement with Laboratoires FILLMED, relating to the exclusive distribution of Crescita’s ART-FILLER injectables and the New Cellular Treatment Factor in Canada.

“We expect quarterly revenue and profitability fluctuations throughout 2020, depending on the scale and timing of milestone and royalty revenue from our out-licensing partners. However, we continue to build Crescita for the long term by focusing on sustainable growth,” concluded Verreault.

Crescita Therapeutics (CTX) is currently down 13.33 per cent to $0.65 at 12:20pm EST.