International Isotopes on Monday reported another net loss in the first quarter of 2017 on the back of a spike in operating expenses. President and CEO Steve Laflin said this week, though, that a new product offering and other opportunities in coming years could finally drive the company to profitability.
The Idaho-based medical isotopes manufacturer and radiological services provider reported a quarterly net loss of $786,266 in its latest 10-Q form with the U.S. Securities and Exchange Commission. That was up by 110 percent year over year from a $374,518 net loss in the same period of 2016.
The culprit, according to the 10-Q, was a 43 percent increase in operating expenses, from just over $1 million in first-quarter 2016 to $1.5 million this year. Laflin told RadWaste Monitor this was primarily due to legal expenses from arbitration seeking $1.6 million over a radioactive material container another company failed to deliver to International Isotopes. Management hopes to complete arbitration next month, the CEO said: “The costs will remain high through the second quarter and then hopefully cease at that point.”
In the 10-Q, the company acknowledged its significant losses since inception; the company was incorporated in Texas in 1995. While a comprehensive figure was not immediately available, International Isotopes lost $1.82 million in 2015 and $1.88 million in 2016.
Total revenue in the first quarter rose by 8 percent on a year-over-year basis, from just under $1.7 million to over $1.8 million, fueled by a 61 percent spike in radiochemical revenue and a 51 percent boost in radiological services revenue.
Sales of International Isotopes’ radiochemical products, used in cancer treatments and other medical services, got a boost when a competitor stopped selling sodium iodide after losing its product source — Canada’s Chalk River Laboratories, Laflin said.
Meanwhile, heightened gemstone processing was the power behind the strength in the radiological services segment. That is something of an anomaly for the business, which generally collects most of its revenue from disposal of disused radioactive sources for the Department of Energy’s National Nuclear Security Administration. Management anticipates new contract opportunities for this work both domestically and internationally, according to Laflin.
“The performance of those two segments is the best good news that there is,” Laflin said. “We have also the cobalt segment; we expect that to come right along later this year when we start pulling some cobalt in to manufacture our products.”
Cobalt product sales revenue dropped by 30 percent in the quarter while the company waited on a new batch of high-activity cobalt needed for its product, which is used for scanning shipping containers and seaports and borders.
Finally, nuclear medicine standards sales were down just 1 percent for the quarter.
The major revenue driver going forward would be Food and Drug Administration approval of International Isotopes’ generic sodium iodide product, which would be used to diagnose and treat thyroid diseases and in trials for treatment of various forms of cancer. The company submitted its new drug application in November; FDA reviews can take upward of two years, but International Isotopes has requested an expedited evaluation. Laflin did not disclose any sales forecasts for the product, but the company has said the price of the generic product should make it competitive on the market.
The chief executive said he has also not lost hope that International Isotopes’ stalled depleted uranium deconversion facility in Hobbs, N.M., can be revived. The firm suspended design and construction activities on the project in 2013 due to an insufficient number of contracts.
“The project is not dead, it’s still hibernating, it’s still on hold, we still believe the project is going to resurrect and resurface, but right now we don’t have a time frame for that,” Laflin said. “We’re keeping all the permits and property agreements, licensing, everything current, so we can jump back into that when market conditions change for uranium.”
As it has in prior 10-Qs, the company said cash from operations, cash raised from equity financing, and cash already on hand should be enough to fund the company’s operations over the next year.
On Thursday, International Isotopes announced that it had retired roughly 91 percent of its outstanding 8 percent convertible notes, thus erasing 91 percent of the debt connected to the notes.
