Shares of Australian-born Parnell Pharmaceuticals ($PARN) rose more than 13% to $2.52 on April 22, after the company announced that its revenues in the first quarter rose 43% year-over-year to AU$2.2 million ($1.7 million). The closely held company, which is now based in Kansas, also said it was preparing to launch two products for dogs, and that it is close to signing a contract to provide contract manufacturing services to a “major multi-national” company, which it did not name but that it said “could bring in millions of dollars of revenue over several years.”
Revenues in the first quarter were particularly strong in its U.S. production-animal unit, which experienced 10% sales growth, driven by its products to improve the management of reproduction in dairy cows, according to a press release. Parnell also saw 164% growth in its U.S. companion animal business after launching Glyde Chews, a supplement to treat osteoarthritis in dogs, and an accompanying mobile app called Fetch.
But Parnell has placed much of its energy on securing FDA approval for Zydax, its treatment for osteoarthritis in dogs, and there have been some disappointments there. In the press release, CEO Robert Joseph said that after the company completed its FDA filing last October, it had expected an answer this month, but instead the agency came back with questions. Parnell anticipates completing the responses to those queries in the second quarter, and if all goes well, the product could be approved late in the year, he said.
“Whilst it is difficult to extrapolate results across different clinical trials, we believe the results from that pivotal efficacy study demonstrate that Zydax provides a rapid and very significant reduction in the clinical signs of osteoarthritis and we believe this trial demonstrated a more meaningful clinical outcome than other therapies,” Joseph said during a conference call with analysts after the earnings release.
Meanwhile, Parnell is preparing to launch two products for the companion animal market. One, called Luminous, is a topical neutraceutical product to treat atopic dermatitis in dogs, according to the press release. The other is Reviderm, a liquid bandage to heal wounds in dogs. Parnell recently in-licensed the product, which combines a dissolving polymer-based seal with antimicrobial ingredients to ward off infections.
When asked during the call to describe the competitive landscape for Reviderm, Joseph said there is no other product like it on the market. “Reviderm is a liquid bandage. It's a spray-on,” he explained. “It’s an impervious layer … that we believe supports the rapid healing of the wound.”
Parnell has spent much of the last year working to expand its presence in the rapidly growing U.S. market for companion animal health. Toward that end, its marketing expenses nearly doubled last year as it built its sales team. The company also made major moves to improve the liquidity of its stock, striking a share-purchase deal with Lincoln Park Capital Fund.
- read a transcript of the earnings call at Seeking Alpha