Scorpius Holdings Achieves 16% Year-Over-Year Increase in Revenue for the Second Quarter of 2024

Rhea-AI Summary

Scorpius Holdings (NYSE American: SCPX) reported a 16% year-over-year revenue increase and a 25% reduction in operating expenses for Q2 2024. The company's pipeline now exceeds $100 million in weighted opportunities across government and manufacturing sectors. Q2 2024 financial highlights include:

- Revenue: $0.8 million (up from $0.7 million in Q2 2023)
- Cost of revenues: $0.8 million (up from $0.4 million)
- R&D expenses: $3.6 million (down from $5.2 million)
- SG&A expenses: $5.0 million (down from $7.0 million)
- Net loss: $8.9 million or ($26.98) per share (improved from $13.9 million or ($106.67) per share)

As of August 19, 2024, Scorpius had approximately $13.2 million in cash and short-term investments, strengthening its balance sheet to capitalize on upcoming projects and potentially achieve positive cash flow.

Positive

• 16% year-over-year increase in revenue for Q2 2024
• 25% reduction in operating expenses compared to Q2 2023
• Pipeline surpasses $100 million in weighted opportunities
• Decrease in R&D expenses from $5.2 million to $3.6 million
• Reduction in SG&A expenses from $7.0 million to $5.0 million
• Improvement in net loss from $13.9 million to $8.9 million
• Cash and short-term investments increased to $13.2 million as of August 19, 2024

Negative

• Net loss of $8.9 million for Q2 2024
• Increase in cost of revenues from $0.4 million to $0.8 million
• Total non-operating expense of $0.6 million, including loss on disposal of leasehold improvements

Insights

Financial Analyst

Scorpius Holdings' Q2 2024 results show a mixed financial picture. The 16% year-over-year revenue increase to $0.8 million is positive, but the company still posted a substantial net loss of $8.9 million. The 25% reduction in operating expenses is commendable, with SG&A costs down $2 million from last year. However, the company's cash position of $1.5 million as of June 30 was concerning, though it improved to $13.2 million by mid-August due to recent financing.

The $100 million pipeline of weighted opportunities is promising, but investors should note that these are not guaranteed revenues. The company's path to profitability remains challenging, with cost of revenues increasing faster than revenue. The reduction in net loss from $13.9 million in Q2 2023 to $8.9 million in Q2 2024 is positive, but achieving positive cash flow will require significant execution on pipeline opportunities and continued cost management.

Market Research Analyst

Scorpius Holdings' focus on the CDMO sector positions it in a growing market, driven by increasing outsourcing trends in the pharmaceutical and biotech industries. The company's ability to grow revenue in a challenging quarter suggests some resilience in demand for its services. The $100 million pipeline across government and manufacturing sectors indicates diversification, which could help mitigate risks.

However, the company's small size and financial constraints may limit its ability to compete with larger, more established CDMOs. The recent financing provides a lifeline, but sustained growth and profitability will be important for long-term success. Investors should closely monitor Scorpius' ability to convert pipeline opportunities into actual revenues and its progress towards positive cash flow, as these will be key indicators of the company's viability in this competitive market.

Reduces operating expenses by 25%

Pipeline surpasses $100 million in weighted opportunities across the government and manufacturing sectors

DURHAM, N.C., Aug. 20, 2024 (GLOBE NEWSWIRE) -- Scorpius Holdings, Inc (NYSE American: SCPX) (“Scorpius” or “the Company”), an integrated contract development and manufacturing organization (“CDMO”), today provided strategic, financial, and operational updates for the second quarter ended June 30, 2024.

Jeff Wolf, CEO of Scorpius Holdings, Inc., stated, “We are extremely proud of the progress Scorpius achieved in the second quarter of 2024. Despite facing a quarter with significant working capital challenges, our revenues still increased by 16% and we reduced our operating expenses by 25% over the same period last year. With our recently completed financing, we now have a much stronger balance sheet to capitalize on a number of exciting projects in front of us. We anticipate this funding will not only allow us to accelerate our revenue growth but should enable us to achieve our goal of positive cash flow.”

“Our success this year highlights the significant progress we’ve made in both innovation and customer-focused program management across our service platforms. This progress is most clearly reflected in the strength of our pipeline, which now surpasses $100 million in weighted opportunities across the government and manufacturing sectors. We anticipate closing many of these opportunities by year’s end. As we look ahead, we are confident in our ability to sustain this momentum as we continue to execute our strategic initiatives and deliver value to our shareholders.”

Second Quarter 2024 Financial Results

For the three months ended June 30, 2024, the Company recognized $0.8 million of revenue, primarily from process development, compared to $0.7 million of process development revenue recognized in the 2023 comparable quarter. The increase in process development revenue is attributable to the completion of services over a larger number of customer contracts.

Cost of revenues were $0.8 million and $0.4 million for the three months ended June 30, 2024, and 2023, respectively, and primarily consisted of the direct cost of labor, overhead and material costs at Scorpius. The increase in cost of revenues is due to the expanded service offerings and completed milestone work on multiple CDMO contracts.

Research and development expenses were $3.6 million for the three months ended June 30, 2024, compared to $5.2 million for the three months ended June 30, 2023.

Selling, general and administrative expenses were $5.0 million and $7.0 million for the three months ended June 30, 2024, and 2023, respectively. The decrease of $2.0 million was primarily due to decreases in consultant services of $1.1 million, professional services of $0.4 million, sales and marketing of $0.2 million, and stock-based compensation of $0.3 million.

For the three months ended June 30, 2024, there was no change in fair value of contingent earn-out receivable, related party.

Total non-operating expense was ($0.6) million for the three months ended June 30, 2024, which primarily consisted of $0.6 million from the loss on disposal of leasehold improvements, $0.2 million of interest expense on finance leases, partially offset by $0.2 million from gain on partial extinguishment of debt. Total non-operating expense was ($0.2) million for the three months ended June 30, 2023, which primarily consisted of ($0.2) million of interest expense, ($0.1) million of loss on disposal of equipment, partially offset by ($0.1) million of interest income.

Net loss attributable to Scorpius was approximately $8.9 million, or ($26.98) per basic and diluted share, for the three months ended June 30, 2024, compared to approximately $13.9 million, or ($106.67) per basic and diluted share, for the three months ended June 30, 2023.

As of June 30, 2024, the Company had approximately $1.5 million in cash and cash equivalents and short-term investments. As of August 19, 2024, the Company’s cash and cash equivalents and short-term investments were approximately $13.2 million.

Scorpius Holdings, Inc.

Scorpius Holdings, Inc. is an integrated contract development and manufacturing organization (CDMO) focused on rapidly advancing biologic and cell therapy programs to the clinic and beyond. Scorpius offers a broad array of analytical testing, process development, and manufacturing services to pharmaceutical and biotech companies at its state-of-the-art facilities in San Antonio, TX. With an experienced team and new, purpose-built U.S. facilities, Scorpius is dedicated to transparent collaboration and flexible, high-quality biologics biomanufacturing. For more information, please visit www.scorpiusbiologics.com.

Forward-Looking Statement

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions, and include statements such as being able to capitalize on a number of exciting projects in front of the Company, the funding allowing the Company to accelerate its revenue growth and enable it to achieve its goal of positive cash flow, the Company’s pipeline, surpassing $100 million in weighted opportunities across the government and manufacturing sectors, the closing of many of the pipeline opportunities by year’s end, and the Company’s ability to sustain the momentum as it continues to execute its strategic initiatives and deliver value to its shareholders. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to expand its large molecule biomanufacturing CDMO services, attract new customers, profit from its pipeline and continue to grow revenue; the ability to capture a meaningful market share; the ability to generate meaningful cash flow and become cash flow positive; the Company’s financing needs, its cash balance being sufficient to sustain operations and its ability to raise capital when needed, the Company’s ability to leverage fixed costs and achieve long-term profitability; the Company’s ability to obtain regulatory approvals or to comply with ongoing regulatory requirements, regulatory limitations relating to the Company’s ability to successfully promote its services and compete as a pure- play CDMO, and other factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2023, subsequent quarterly reports on Form 10-Qs and any other filings the Company makes with the SEC. The information in this presentation is provided only as of the date presented, and the Company undertakes no obligation to update any forward-looking statements contained in this presentation on account of new information, future events, or otherwise, except as required by law.

Media and Investor Relations Contact
David Waldman
+1 919 289 4017
ir@scorpiusbiologics.com

FAQ

What was Scorpius Holdings' (SCPX) revenue growth in Q2 2024?

Scorpius Holdings (SCPX) reported a 16% year-over-year increase in revenue for the second quarter of 2024.

How much did Scorpius Holdings (SCPX) reduce its operating expenses in Q2 2024?

Scorpius Holdings (SCPX) reduced its operating expenses by 25% compared to the same period last year in Q2 2024.

What is the current value of Scorpius Holdings' (SCPX) pipeline opportunities?

Scorpius Holdings' (SCPX) pipeline now surpasses $100 million in weighted opportunities across the government and manufacturing sectors.

What was Scorpius Holdings' (SCPX) net loss for Q2 2024?

Scorpius Holdings (SCPX) reported a net loss of approximately $8.9 million, or ($26.98) per basic and diluted share, for Q2 2024.

How much cash and short-term investments did Scorpius Holdings (SCPX) have as of August 19, 2024?

As of August 19, 2024, Scorpius Holdings (SCPX) had approximately $13.2 million in cash and cash equivalents and short-term investments.