DMK Pharmaceuticals Corporation

Revenue for the first quarter ended March 31, 2023 increased 26% to approximately $1.5 million from approximately $1.2 million in the same period of 2022, driven primarily by ZIMHI sales to US WorldMeds. No revenues were reported for SYMJEPI in either period because of the manufacturing hold and voluntary recall announced in March 2022. SG&A expense was approximately $4.8 million versus $3.4 million a year ago, and R&D expense was approximately $1.3 million versus $4.2 million. Net loss from continuing operations was approximately $9 million compared with approximately $2.2 million in the prior-year quarter. Cash and cash equivalents at March 31, 2023 were approximately $3.1 million. Management did not provide next-quarter or full-year financial guidance; instead, it said the near-term priorities are a reverse stock split, then closing the DMK merger, which they said they think can be achieved in the next 30 days.

David Marguglio said the stockholders approved the measures needed to proceed with the DMK merger, and the board authorized a reverse split to help avoid Nasdaq delisting by meeting the minimum bid price requirement before the June 26 deadline. His tone was upbeat about the transaction, calling it an exciting milestone and saying he expects the combined company to have strong future prospects. He emphasized that the immediate next steps are the reverse split and then closing and integrating the merger.

David Benedicto focused on the quarter’s financial details: revenue of approximately $1.5 million, SG&A of approximately $4.8 million, R&D of approximately $1.3 million, a net loss from continuing operations of approximately $9 million, and cash and cash equivalents of approximately $3.1 million at March 31, 2023. He attributed higher SG&A to merger- and financing-related legal, audit, and advisory fees, while the R&D decline reflected reduced Tempol clinical trial and development work. He did not discuss capital allocation beyond the reported cash balance and the context of the financing transaction that closed in March.

In Q&A, management acknowledged that ZIMHI sales to date have been well below expectations, though they still described the market as large and growing and said new marketing and sales strategies will be rolled out. Dr. Versi said the company will prioritize growing commercial revenue, but it will also consider equity financing until profitability is reached, while emphasizing non-dilutive capital from grants, co-development, and out-licensing. He also said DPI-125 has completed a first-in-human Phase 1 dose-escalation study showing tolerability with no serious adverse effects, and that next studies will look to confirm reduced respiratory depression and abuse liability before pursuing opioid use disorder and pain indications.