Baudax Bio, Inc.

For Q1 2022, Baudax reported net product revenue of $0.4 million to $0.425 million, up 113% year over year, and vials sold to end users increased 20% quarter over quarter. Cash and cash equivalents were $11.5 million at quarter-end. Cost of sales was $0.6 million, down from $0.8 million in the prior-year period, R&D expense was $1.3 million versus $1.1 million a year ago, and SG&A was $14.2 million versus $12.1 million a year ago, driven mainly by $1.7 million of accrued severance tied to the reduction in force. The company reported a net loss including a non-cash benefit of $2.4 million, or $3.17 per diluted share, compared with a net loss of $12.8 million in Q1 2021. Management did not provide formal next-quarter or full-year financial guidance, but said April looked like a normal first month of the quarter and that it expects continued progress in Q2; it also said burn should be reduced by approximately 65% going forward.

Gerri Henwood emphasized that ANJESO continues to gain traction despite COVID-related disruption early in the quarter, citing a 20% increase in units, strong performance from top accounts, and the largest monthly unit volume since launch. Her tone was pragmatic and cost-conscious: she said the company had to shrink its commercial footprint because it could not sustain the prior burn rate, while still believing ANJESO can grow modestly and may benefit from a larger strategic partner. She also highlighted continued work on the pediatric study and the neuromuscular blocking agent pipeline as the company’s next growth options.

The CFO-style financial commentary focused on the quarter’s revenue and expense mix: net product revenue was $0.4 million, cost of sales was $0.6 million, R&D was $1.3 million, and SG&A was $14.2 million, with the SG&A increase mainly due to $1.7 million of accrued severance from the workforce reduction. Cash and cash equivalents were $11.5 million at quarter-end. Management said lower scrap expense helped cost of sales and that the business is not yet at full cost absorption; it expects gross margins to improve over time and said parenteral products could eventually generate gross margins in the 70s, but did not give a specific current margin percentage.

The analyst focused on why revenue growth lagged unit growth and whether discounts or timing issues were affecting the numbers. Management said there are timing differences between units passing through and cost reconciliation, and that volume-related discounts were not the main driver because their net impact is in single digits; inventory changes may have had some effect. On gross margin, management said the company is not yet at full cost absorption and reiterated that margins should improve as commercialization scales. On formularies, management said approvals were not fully quantified yet, but there were some approvals in the quarter, including a large ASC chain with close to 200 units, though not all sites were yet set up for pull-through.