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Crescita Reports First Quarter 2021 Results

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Crescita Therapeutics reported Q1-F2021 results with revenue at $3,265, down from $3,815 in Q1-F2020, marking a $550 decline. Gross profit also fell to $2,116 from $2,464, a decrease of $348. Operating expenses dropped to $2,413 from $2,825, resulting in an adjusted EBITDA of $87 compared to $112, a $25 decrease. However, cash reserves improved significantly from $9,334 to $13,944. The company launched NCTF for skin revitalization in April, and received a U.S. patent for CTX-102 with protection until 2040, which could aid future projects.

Positive
  • Cash position improved to $13,944, up $4,610.
  • Launched NCTF, a new skin revitalization product, creating growth potential.
  • Patent granted for CTX-102, protecting technology until 2040.
Negative
  • Revenue decreased by $550, from $3,815 to $3,265.
  • Gross profit declined by $348, from $2,464 to $2,116.
  • Adjusted EBITDA decreased by $25, from $112 to $87.

Crescita Therapeutics Inc. (TSX: CTX and OTC US: CRRTF) (“Crescita” or the “Company”), a growth-oriented, innovation-driven Canadian commercial dermatology company, today reported its financial results for the first quarter ended March 31, 2021 (“Q1-F2021”). All amounts presented are in thousands of Canadian dollars (“CAD”) unless otherwise noted.

Financial Highlights

Q1-F2021 vs. Q1-F2020

  • Revenue was $3,265 compared to $3,815, a decrease of $550;
  • Gross profit was $2,116 compared to $2,464, a decrease of $348;
  • Operating expenses were $2,413 compared to $2,825, a decrease of $412;
  • Adjusted EBITDA1 was $87 compared to $112, a decrease of $25;
  • Ending cash position was $13,944 compared to $9,334, an increase of $4,610.

“Despite longer lockdown periods, the improved performance of our Commercial segment over the prior year indicates early signs of recovery as we continue to see the benefits of our investments in digital marketing and commercial initiatives,” commented Serge Verreault, President and CEO of Crescita. “We launched our skin revitalization solution, NCTF, in April through a virtual event with positive feedback and are looking forward to continuing our fieldwork to create brand awareness and ramp up sales,” added Mr. Verreault.

“During the quarter, we recognized US$637 of the US$1,000 annual minimum royalties under our licensing agreement with Taro due to the continued shortfall of the U.S. sales of Pliaglis. Taro is pursuing its efforts to commercialize the product and we are monitoring the situation closely. We remain focused on expanding the international footprint of Pliaglis, growing our medical aesthetics business, and leveraging our strong cash balance for M&A.”

Q1-F2021 and Subsequent Corporate Developments

Launch of New Cellular Treatment Factor®

  • In April, we launched New Cellular Treatment Factor® (“NCTF”) in the Canadian medical aesthetics market. NCTF is a unique skin revitalization solution, containing hyaluronic acid and over 50 key ingredients, which smooths fine lines, restores radiance, deeply nourishes the skin and increases skin density. Since 1978, NCTF has been a leader in skin revitalization with over 4 million bottles sold around the world annually.

Patent Granted for CTX-102

  • On March 16, the United States Patent and Trademark Office granted U.S. Patent No. 10,945,952 for Rinse-Off Compositions and Uses Thereof for Delivery of Active Agents which is valid through March 16, 2040 and Orange Book listable against CTX-102 once the product is approved. The enhanced deposition technology protected by the patent may be utilized in new development projects in the future.

Lease Amendment for Manufacturing and Office Facility

  • Effective March 15, the Company amended the lease for its manufacturing and office facility, extending the lease term for a period of five years until September 30, 2026 and adding a renewal option in favour of the Company for an additional period of five years until September 30, 2031.

Q1-F2021 Financial Results

Note: The Management’s Discussion and Analysis (“MD&A”), Condensed Consolidated Interim Financial Statements and accompanying notes for the three months ended March 31, 2021 are available at www.crescitatherapeutics.com/investors and have been filed with SEDAR at www.sedar.com.

Summary Financial Results

In thousands of CAD, except per share data and number of shares

Three months ended March 31,

 

2021

 

2020

Change ($)

 

$

$

$

Commercial skincare

 

1,767

 

1,539

 

228

Licensing and royalties

 

806

 

1,453

 

(647)

Manufacturing and services

 

692

 

823

 

(131)

Revenues

 

3,265

 

3,815

 

(550)

Cost of goods sold

 

1,149

 

1,351

 

(202)

Gross profit

 

2,116

 

2,464

 

(348)

Gross margin (%)

 

64.8%

 

64.6%

 

0.2%

Research and development

 

219

 

228

 

(9)

Selling, general and administrative

 

1,863

 

2,183

 

(320)

Depreciation and amortization

 

331

 

414

 

(83)

Total operating expenses

 

2,413

 

2,825

 

(412)

Operating loss

 

(297)

 

(361)

 

64

Total other expenses (income)

 

139

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FAQ

What were Crescita Therapeutics' Q1-F2021 financial results?

Crescita reported Q1-F2021 revenue of $3,265, down from $3,815 in Q1-F2020, with a gross profit decline to $2,116 from $2,464.

How did Crescita's cash position change in Q1-F2021?

Crescita's cash position improved significantly to $13,944, an increase of $4,610 from the previous year.

What new products did Crescita launch in 2021?

In April 2021, Crescita launched the New Cellular Treatment Factor (NCTF), a skin revitalization solution.

What is the significance of the patent granted to Crescita for CTX-102?

The U.S. patent for CTX-102 protects the technology until 2040, supporting future development projects.

What challenges did Crescita face in their financial performance for Q1-F2021?

Crescita faced challenges with decreased revenue, gross profit, and adjusted EBITDA compared to Q1-F2020.

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