RVL Pharmaceuticals plc

Net product sales, entirely from UPNEEQ, were $8.3 million in Q2 2023, reflecting a slight year-over-year decline due to lower sales volume partly offset by higher pricing from an April 2022 increase. Total cost of goods sold was $1.9 million, down $0.3 million year over year; gross profit percentage was 76% versus 74% in the prior-year period. SG&A was $13.9 million, down $6.3 million year over year, and R&D was $0.5 million, down $0.7 million. The company recorded a $13.9 million non-cash impairment charge related to discontinuing arbaclofen marketing, and adjusted EBITDA loss was $7.4 million versus $11.8 million a year ago. Cash at June 30 was $19.2 million, and senior secured indebtedness with principal maturities was $70.7 million. Looking ahead, management said Q3 total operating expense should be roughly comparable to Q2, with Q4 likely to ramp modestly as DTC marketing begins; they did not provide full-year revenue or EPS guidance.

Brian Markison emphasized that UPNEEQ is gaining traction and that the company is broadening access through its provider base, telemedicine, and the new Elevate platform. He framed consumer activation as a necessary next step because awareness is extremely low, while also saying the company is pursuing business development to add products or services that can leverage the existing sales force and create cost synergies. His tone was confident about the strategic direction, but he repeatedly noted the company still has work to do.

Mike DePetris highlighted the quarter’s cost discipline and the impact of non-cash items. He cited $8.3 million of net product sales, $1.9 million of COGS, 76% gross margin, $13.9 million of SG&A, $0.5 million of R&D, a $13.9 million impairment charge, and a $7.4 million adjusted EBITDA loss, while noting monthly total operating expense was solidly below $5 million after adjustments and below the company’s $7 million benchmark. He also said cash was $19.2 million at quarter-end against $70.7 million of senior secured debt, and management is trying to extend runway and support strategic business development.

Analysts focused on why the company needs a business-development deal, how much the company wants to lean into direct-to-consumer versus physician-driven growth, and what metrics will be used to judge marketing spending. Management said M&A should help amortize the sales force, add revenue, and create cost synergies, while DTC is meant to supplement rather than replace field promotion because awareness is still very low. They said return on ad spend will be a key metric, that spending will be tested with pilots before scaling, and that Q3 operating expense should be similar to Q2 before rising in Q4. Questions also covered Elevate and pricing; management said the platform is already increasing average prescription value and should be accretive to margins over time.