Shares of Parnell Pharmaceuticals ($PARN) were up 9% in morning trading to $3.68 on Wednesday, after the company announced that its sales in the third quarter more than doubled to AU$3.6 million ($2.6 million). In the first 9 months of the year, sales grew 55% to AU$8.5 million ($6.1 million) and the company halved its net loss to AU$5.4 million ($3.9 million).
Parnell CEO Robert Joseph
In a phone interview with FierceAnimalHealth after the announcement, CEO Robert Joseph attributed much of the growth to the company's companion animal products, which continue to perform well in Australia, where Parnell was founded. "We had double-digit growth in Australia, and we certainly expect that sales trajectory to continue to approve through the end of the year and into '16," Joseph said. "We've been on the market in Australia for 8 years, so it's pleasing that new innovations we're bringing to market continue to grow."
Parnell is just starting to make itself known to veterinary clinics in the U.S., having recently launched its neutraceutical product Glyde Chews for treating osteoarthritis in dogs. The product is marketed along with Fetch, a mobile app that allows dog owners to track their pets' joint health and communicate directly with their veterinarians about it.
After just 5 weeks of marketing in the U.S., 110 clinics have already embraced Glyde and Fetch, Joseph says. But his newly built staff of 55 sales reps is calling on 12,000 clinics, and he fully expects more growth to come. "We've had a very strong start," Joseph said. "We hope that penetration continues between now and this time next year."
Parnell's production-animal business has hit some rough spots this year, particularly in Australia and New Zealand, where declining milk prices have forced some producers to delay purchases of its products to enhance production and breeding in dairy cows. Sales of those products outside of the U.S. fell 36% in the first 9 months.
But past experience suggests that business should turn around soon, Joseph said. "We've seen this and it's a short-term reaction. We typically see a quick recovery," he said. "The good news is that the U.S. market is growing very strongly--293% growth year-to-date."
Parnell, which moved its headquarters to Kansas in 2013, is stepping up its development efforts with the recent hiring of Karen Greenwood, a veteran of Zoetis ($ZTS), who is the company's new vice president of R&D. Parnell recently completed its FDA filing for Zydax, a drug it's developing to treat osteoarthritis in dogs and horses. Greenwood has also accelerated the development of PAR121 for bone healing and PAR122 for wound healing.
Joseph added that Greenwood is helping Parnell pursue growth opportunities via partnering, as well. "We have a number of business development opportunities we're assessing--in-licensing opportunities that would add immediately to our portfolio for revenue generation," he said.