US animal health firm Parnell Pharmaceuticals recorded 67% sales growth in the first half of 2016.
The Overland Park, Kansas-based business, which was formerly headquartered in Australia, recorded first-half revenues of Aus$8.2 million ($6.2 million).
The firm witnessed 40% revenue growth from its US production animal segment to Aus$4.1m. This was driven by a high level of new customers for mySYNCH, a digital technology that assists dairy producers to improve the profitability of operations.
Parnell's companion animal business scored 158% revenue growth in H1 to Aus1.5m. This unit was helped by the continued roll-out of its Glyde nutraceutical for osteoarthritis and its Fetch digital application in the US, while Australian sales grew 37%.
The company said Fetch has been used by over 7,000 pet owners in the US market. "Based on such strong uptake in the first half of the year, we expect pet parent users to increase to over 20,000 by year end," the company noted.
The firm expects to soon conduct US launches for Luminous, its nutraceutical for dermatology, and Reviderm, an antimicrobial spray on liquid bandage.
Parnell added: "Our contract manufacturing segment generated its first revenues through the previously announced agreement with Merial, taking advantage of excess capacity in our FDA-approved injectables manufacturing facility. This is a significant milestone and we anticipate potentially adding further contract manufacturing deals in 2016. The company did not generate any contract manufacturing revenue in 2015."
Net loss after tax for the six months came to Aus$12.5m. This time last year loss was Aus$3m.
These positive financial results follow 43% first-quarter sales growth for Parnell.
Guidance goes up
Parnell previously predicted full year 2016 revenues of $14m-$16m. However, the firm has upped these expectations to $17-$18m.
The firm added: "We expect 2017 revenues to grow to approximately $25m, which we estimate will make the company profitable in the second half of 2017. This guidance excludes the impact of launching Zydax [canine osteoarthritis treatment] in the US, Canada and Europe which we estimate, if approved, would add substantially to revenues and earnings in 2017."
Zydax for dogs update
Parnell is continuing discussions with the US FDA for the approval of Zydax for dogs.
Robert Joseph, president and chief executive of Parnell, stated: "We progressed preparations for the re-filing of the two remaining technical sections for the use of Zydax in treating osteoarthritis in dogs and expect to submit those filings to the FDA this quarter."
The company expects a potential approval and immediate launch of Zydax for dogs in the second quarter of 2017. Previously, Parnell had hoped to receive Zydax authorization in late Q4, 2016.
Mr Joseph commented: "Whilst later than our original expectations, we do not anticipate this updated timeline being likely to have a material impact on our revenue expectations for Zydax in 2017 given our strategy of establishing a US companion animal presence in osteoarthritis with Fetch and Glyde in advance of the launch of Zydax.
"Because the additional time to US launch provides us a greater opportunity to engage with more pet parents through Fetch and Glyde, we believe we could have access to a larger population of dogs ready to commence Zydax treatment programs immediately once approved.
"As time has progressed, we have been able to observe the competitive landscape for Zydax directly through our sales team and we continue to believe that Zydax has a unique position in the market. As we have shown to be the case in the analogous Australian market, Zydax can effectively be used as a first-line treatment for osteoarthritis in earlier-stage, younger dogs and can also be used adjunctively with non-steroidal anti-inflammatory drugs.
"Strong interest has been expressed by a number of parties and we remain confident of signing an appropriate deal in advance of a potential launch in Europe, Canada and other markets in 2017 and beyond."
Parnell has received the first round of questions from the European Medicines Agency relating to the potential authorization of Zydax. The company expects EU approval for Zydax in the first half of 2017. It is also hopeful for Canadian authorization in second half of next year.
Mr Joseph said: "Our R&D team is making excellent progress on our lead projects. In the first half, we commenced several investigational studies into PAR121, our osteogenic drug candidate, and PAR122, our dermatotrophic drug candidate. We expect to report results from these studies in the second half of 2016.
"We have commenced studies into the potential use of Zydax for osteoarthritis in cats, and expect to commence investigational studies into applicability of Zydax for interstitial cystitis in cats."
If these studies are successful, Parnell anticipates commencing pivotal studies for target animal safety and target animal effectiveness in late 2016. This could lead to US approval filing with the FDA in the first half of 2017.