Pharmaloz Manufacturing Accelerates Expansion, Improves Pricing, Boosts Profitability and Secures New Contracts
January 23 2024 - 8:00AM
ProPhase Labs, Inc. (NASDAQ: PRPH) (“ProPhase” or the
“Company”), a next generation biotech, genomics,
therapeutics and diagnostics company, today announces
significant progress at Pharmaloz Manufacturing, Inc. (PMI), its
wholly owned subsidiary.
With the implementation of recent price
increases across its entire product line, PMI has transitioned to
significant projected 2024 profitability starting with Q1 2024. In
view of favorable current market conditions and demand for PMI's
services and products, PMI is optimistic that it will experience
continued favorable pricing for the near to intermediate term.
PMI's operational enhancements have helped drive
its current success. PMI recently acquired cutting-edge automation
equipment and, with other operating efficiencies, is set to
escalate plant capacity by over 50%, raising annual production
capability from below $10 million to over $15 million.
In addition to the price increases, increased
capacity and transition to profitability, PMI has signed deals with
two top-tier lozenge brands. These new arrangements are projected
to inject an additional $5 million in annual revenue and more than
$1.25 million in additional yearly pre-tax net profits. One of
these brands is also poised to leverage PMI's comprehensive blister
packing capabilities, further diversifying its manufacturing
portfolio.
In addition to the contract awards announced
above, PMI has been working on bench samples for the past year for
two major global brands. These brands represent two of the largest
names in the global lozenge market.
PMI is not stopping there. The installation of a
second lozenge production line and further automation in Q2 2024
are projected to approximately double capacity to a $30-$35 million
potential run-rate. Additional equipment set to arrive by Q4 2024
could increase annual production capabilities to a range of $60-$80
million, based on a 3 ½ day workweek. This production capacity
could be further increased, if demand warrants it, with additional
staffing to extend the workweek.
Ted Karkus, CEO of ProPhase Labs, reflects on
this transformative journey: “What began as a modest manufacturing
unit solely dedicated to our Cold-EEZE® contract manufacturing has
evolved into a top-tier facility producing premium lozenges for
global brands. Our roadmap envisages scaling this business in the
next 18-24 months from under $10 million in annual revenue to a
potential $80-$100 million production capacity with healthy net
profit margins. With prospective global partnerships, we're
collaborating with a leading engineering and consulting firm to
potentially enhance production capacity to $100-$200 million in
annual revenues by the end of 2025. Of course, there can be no
assurance that we will in fact be able to win new business at these
levels, or that such new business will deliver the projected gross
margins, but that is the goal.”
“The projected increased profitability at PMI
will help offset some of the investment and expenses related to the
development of our Nebula Genomics business and build out of our
world-class whole genome sequencing lab in Garden City, NY, as well
as preparation for the commercialization of our BE-Smart Esophageal
Cancer test,” Mr. Karkus concluded.
About ProPhase Labs
ProPhase Labs, Inc. (Nasdaq: PRPH) is a
next-generation biotech, genomics, therapeutics and diagnostics
company. Our goal is to create a healthier world with bold action
and the power of insight. We’re revolutionizing healthcare with
industry-leading Whole Genome Sequencing solutions, while
developing potential game changer diagnostics and therapeutics in
the fight against cancer. This includes a potentially life-saving
cancer test focused on early detection of esophageal cancer and
potential breakthrough cancer therapeutics with novel mechanisms of
action. Our world-class CLIA labs and cutting-edge diagnostic
technology provide wellness solutions for healthcare providers and
consumers. We develop, manufacture, and commercialize health and
wellness solutions to enable people to live their best lives. We
are committed to executional excellence, smart diversification, and
a synergistic, omni-channel approach. ProPhase Labs’ valuable
subsidiaries, their synergies, and significant growth underscore
our multi-billion-dollar potential.
About Pharmaloz
Pharmaloz Manufacturing, Inc., a wholly-owned
subsidiary of ProPhase Labs, Inc., is a full-service contract
manufacturer and private label developer of a broad range of
non-GMO, organic and natural-based cough drops and lozenges and OTC
drug and dietary supplement products. PMI provides consumer product
development, pre-commercialization services, production,
warehousing and distribution services for its customers.
Pharmaloz’s manufacturing facility, which is located in Lebanon,
Pennsylvania, is registered with the U.S. Food and Drug
Administration, and is certified organic and kosher.
Forward Looking Statements
Except for the historical information contained
herein, this document contains forward looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our strategy, plans,
objectives and initiatives, including our plans to grow our
subsidiaries and build a high revenue, highly valued company, our
expectation that recent price increases across PMI's product line
will increase profitability, our expectation that the acquisition
of automation equipment will escalate PMI plant capacity by over
50% and increase annual production, our belief that new commercial
contracts with two top-tier lozenge brands will increase annual
revenue and profits, our belief that the PMI manufacturing plant
will be a steady revenue producer for years to come, and the
anticipated timing for delivery of new equipment for the PMI
manufacturing plant and its ability to increase capacity and
revenue. Management believes that these forward-looking statements
are reasonable as and when made. However, such forward-looking
statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results to differ materially
from those projected in the forward-looking statements. These risks
and uncertainties include but are not limited to our ability to
obtain and maintain necessary regulatory approvals, general
economic conditions, consumer demand for our products and services,
challenges relating to entering into and growing new business
lines, the competitive environment, and the risk factors listed
from time to time in our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and any other SEC filings. The Company
undertakes no obligation to update forward-looking statements
except as required by applicable securities laws. Readers are
cautioned that forward-looking statements are not guarantees of
future performance and are cautioned not to place undue reliance on
any forward-looking statements.
For more information, visit
www.ProPhaseLabs.com.
ProPhase Media Relations and
Institutional Investor Contact:
ProPhase Labs,
Inc.267-880-1111investorrelations@prophaselabs.com
ProPhase Retail Investor Relations
Contact:
Renmark Financial CommunicationsJohn
Boidman514-939-3989Jboidman@renmarkfinancial.com
Source: ProPhase Labs, Inc.
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