Elite Pharmaceuticals Inc (OTCMKTS:ELTP) Earnings Drag Shares Down

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Elite Pharmaceuticals Inc (OTCMKTS:ELTP) shares were down 5.89% to $0.142 on Wednesday and flat in after-hours trading. Share prices have been trading in a 52-week range of $0.11 to $0.43. The company has a market cap of $104.26 million at 733.72 million shares outstanding.

Elite Pharmaceuticals reported consolidated revenues for the second quarter of $2.7 million, consisting of $2.0 million in manufacturing revenues and $0.7 million in license fees. This reflects a 7% decline as compared to revenues for the second quarter of the prior year primarily due to timing differences in shipments.

Year-to-date consolidated revenues were $6.0 million for the six months ended September 30, 2016, which reflects around 18% in gains from the same quarter a year ago, mostly spurred by the continued expansion and establishment of Elite’s generic product lines in the market.

“We delivered solid quarterly performance”, commented Nasrat Hakim, Elite pharmaceuticals President and CEO.  “Annualized revenues exceed $10 million, and we continue to execute on our growth strategy and the development of our pipeline of future products.”

Elite Pharmaceuticals shares could be in for more gains since the company has been hard at work establishing new operations in the past few months. Last month, the company just submitted an Abbreviated New Drug Application for Percocet, which has a market of approximately $700 million, and is aiming for at least one further generic to the FDA for approval every quarter between now and the end of 2017.

Share prices are still at good bargain levels at this point, following an earlier selloff when the US FDA turned down its application for SequestOx, which is an abuse-deterrent opioid. In the rejection letter, the FDA mentioned the drug’s potential for overdose which has not been sufficiently addressed in the pending new drug application – something that the company is already working on addressing.

Besides, the scope of Elite Pharmaceuticals revenues are designed to stay afloat with their current strategy of developing a profitable generic brand operation whose revenues offset the development costs associated with creating these products or bringing them to market. This was highlighted in their recent earnings reports, as manufacturing and licensing fees account for majority of revenues.

An approval for any of their pending applications could represent tremendous upside for Elite Pharmaceuticals in the coming months, although another rejection could bring it down to its lows once more. Still, if there’s anything that the quarterly earnings reports have shown, it’s that the company is able to maintain its profitability in their portfolio despite these road bumps.

Elite Pharmaceuticals Inc is a specialty pharmaceutical company that is principally engaged in the development and manufacture of oral, controlled-release products. The company develops and manufactures generic products, products using controlled-release drug technology, products utilizing abuse deterrent technologies, and it develops and markets generic controlled-release and abuse deterrent pharmaceutical products.

Its segments include Abbreviated New Drug Applications for generic products and New Drug Applications for branded products. Its  product, SequestOx, is an immediate-release Oxycodone Hydrochloride containing sequestered Naltrexone, which incorporates five milligram, 10 milligram, 15 milligram, 20 milligram and 30 milligram doses of oxycodone into capsules. SequestOx is used for the management of moderate to severe pain where the use of an opioid analgesic is appropriate.

 

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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.