10-Q - Assertio Holdings, Inc. (0001808665) (Filer)

Mon, May 12, 9:08 PM (42 days ago)

### Assertio Holdings, Inc. (ASRT) Q1 2025 Financial Summary **Financial Health and Performance:** Assertio Holdings, Inc. (ASRT) reported a challenging first quarter for 2025, with significant declines in revenue and increased expenses. The company's total revenue decreased by 18.3% to $26.5 million from $32.4 million in the same period last year. This decline was primarily driven by a 15.2% drop in product sales, which fell to $26.0 million from $30.9 million. Royalty revenue also decreased by 15.7% to $0.5 million. **Profit Margins and Expenses:** The company reported a net loss of $13.5 million, a substantial increase from the $4.5 million loss in Q1 2024. This widening loss was due to higher operating expenses, particularly in selling, general, and administrative costs, which rose by 20.1% to $22.0 million. Amortization of intangible assets also increased significantly by 63.6% to $9.2 million, driven by changes in the estimated useful life of ROLVEDON and INDOCIN product rights. **Cash Flow:** Operating activities resulted in a cash outflow of $12.5 million, a significant reversal from the $7.5 million inflow in Q1 2024. This change was primarily due to lower net product sales, higher selling, general, and administrative expenses, and lower cash generated by net working capital. Investing activities used $2.9 million, mainly for purchases of short-term investments. Financing activities used $0.1 million, primarily for employee stock awards. **Earnings Changes and Trends:** The company's earnings per share (EPS) worsened, with a basic and diluted net loss per share of $0.14, compared to $0.05 in Q1 2024. The decline in EPS was driven by the increased net loss and the absence of potentially dilutive stock-based awards and convertible debt from the EPS calculation due to their anti-dilutive effect. **Future Operations and Uncertainties:** Assertio Holdings faces several uncertainties, including increased competition from generic products, ongoing legal proceedings, and potential regulatory challenges. The company's liquidity position, with $87.3 million in cash and cash equivalents, is expected to be sufficient for the next 12 months. However, significant cash needs may arise from legal expenses, product acquisitions, and strategic transactions. **Management Discussion:** Management highlighted the impact of increased discounts, chargebacks, and rebates on product pricing, particularly for ROLVEDON. They also noted the potential for future impairment of long-lived assets, including SPRIX, due to increased competition. The company is focusing on streamlining operations and optimizing efficiencies to mitigate these challenges. **Conclusion:** Assertio Holdings, Inc. is navigating a challenging quarter with significant revenue declines and increased expenses. The company's focus on operational efficiencies and strategic transactions will be crucial in addressing these challenges and ensuring long-term sustainability. Investors should monitor the company's progress in managing legal risks, product pricing, and operational costs.