Additional time is necessary to prepare and complete the company’s review of its financial statements for the year ended December 31, 2023, in order for the company to file its annual report on Form 20-F, including with respect to an ongoing internal investigation initiated by the company´s Audit Committee with the assistance of external advisors into matters involving the company’s historical accounting treatment and associated financial statement disclosure related to a 2012 loan in the amount of approximately $2.5 million that involved related parties.

See Also: Procaps Names Jose Antonio Vieira (above photo) as New CEO

The company is working diligently to complete its financial statements in order to file its Form 20-F as soon as practicable before May 15, 2024.

The company expects to hold a business update call in conjunction with the filing of its Form 20-F and Earnings Release and expects to provide a further update regarding the date of the business update call.

Procaps asked in a statement that all questions be sent to ir@procapsgroup.com. Due to applicable securities laws, the company is unable to provide further details beyond what is publicly disclosed, and accordingly the company expects to address submitted questions in its applicable reports and during its conference call once the results are published.

Procaps has made preliminary determinations of certain results of operations. Revenue for the year ended December 31, 2023, is currently expected to be between approximately $425 and $433 million, compared to $409.9 million for the year ended December 31, 2022, with the difference primarily due to an increase in sales. Income for the year ended December 31, 2023, is currently expected to be between approximately $50 and $55 million, compared to income of $42.5 million for the year ended December 31, 2022, with the difference primarily due to the accounting treatment for non-cash shares and warrants held in escrow and an increase in non-recurring income.

This is the fifth year in a row that Procaps has placed first in the group’s annual “innovation ranking,” which measures firms in Colombia on their innovation capacity in areas including organizational culture, product innovation, and marketing.

In a release recognizing the honor, Procaps noted that it has previously received other innovation kudos from the Colombian Ministry of Sciences, Technology, and Innovation, and was the first pharmaceutical company in Colombia to receive the certification of its innovation management system (through NTC-5801:2018, awarded by Icontec in 2022).

“We appreciate once again receiving recognition for our team’s innovative vision and accomplishments,” said Ruben Minski, CEO of Procaps Groups.

He added that “we have a direct presence and export to more than 50 countries worldwide, as well as over 40 granted patents on oral delivery system technologies and continuous development of new patents.”

Under the agreement, Procaps is responsible for registration, branding, marketing and commercialization throughout Latin America.

Procaps submitted an initial set of 8 molecules to the regulatory authority in Colombia, and intends to later expand in other parts of Latin America.

“These molecules are indicated for different types of cancer such as breast cancer, colon cancer, and chronic myeloid leukemia, among others,” said Dr. Camilo Camacho, COO of Procaps Group, in a statement. “Many of these molecules, if approved, will likely be introduced to our region for the first time, which aligns with our mission to continue to seek to provide patients in Latin America with potential alternative and accessible therapies.”

According to Procaps, the areas within Latin America where it operates have a population of more than 200 million people, and the incidence of cancer affects around 0.3% of the population in these locations, which equates to some 500,000 new cases per year.

“We are very excited to expand our oncology portfolio in the region and add more partner companies and potentially broaden cancer treatment options with several new molecules to better serve more patients and physicians with this serious and growing disease,” added Ruben Minski, CEO of Procaps Group.

The Colombian company’s specialized facilities for the development and manufacturing of wide-ranging gummy technologies, both gelatin and plant-based, currently delivers over 100+ SKUs of unique nutraceutical products to global brands across 15 countries.

Procaps Group plans to model its new U.S. facility after its gummy manufacturing plant in Bogota, Colombia with current total gummy facility capacity of 300 tons per month. Development will include a three-phase project starting with logistics, warehousing and offices scheduled to begin in Q1 2022, and packaging operations scheduled to begin in Q2 2022. The project is expected to be completed in Q4 2022, with full gummy manufacturing.

New Funtrition Gummy Manufacturing Facility in Florida Slated to be Fully Operational by Q1 2023

“This new facility is expected to substantially increase our capacity for the first time outside of Procaps Group’s Colombian headquarters for the manufacture of animal and plant-based nutraceutical gummies,” said Camilo Camacho, Procaps Group President. “The U.S. location will ensure redundancy in supply to the market, and position manufacturing of a wider product array closer to key current and potential new customers. The higher production capacities are expected to also be a significant addition to our global growth plans.”

Ruben Minski, CEO of Procaps Group

According to New Hope, gummy supplements alone have gained the most market share globally in relation to other non-pill formats doubling in size over the last five years. Grand View Research indicates the gummy vitamins market is estimated to rise at a CAGR (Compound Annual Growth Rate) of over 13% globally and 11% in North America between 2021 and 2028, gaining each time more and more relevance.

“Complementing our recent West Palm Beach, Florida acquisition, the expansion of our U.S. capacity for our Funtrition business is an important step towards our commitment to meet the requirements of our growing base of U.S. customers,” said Ruben Minski, Procaps Group CEO. “Our new Inspiration Center is a critical piece in our value proposition, underscoring our commitment to deliver better health and nutrition to the world through innovative oral delivery systems. Taken together, we believe these long-term investments will further position Funtrition as a leader in extraordinary and enjoyable gummy products and position us to capture emerging growth opportunities within the space.

The gummy vitamins market had 657 new products launched globally in 2021, and a CAGR of 26% from 2017 to 2021, and 201 new products launched in North America in 2021, and a CAGR of 15% from 2017 to 2021, based on research by Mintel GNPD.

“This project is part of a larger plan to strengthen our global capabilities. Our capex plan also includes important automation and efficiency initiatives in our Bogota and Barranquilla pharmaceutical facilities, increases in capacity across our different locations, and the strengthening of our R&D facilities,” concluded Minski.

Image by Alexas Fotos from Pixabay

Procaps Group CFO Patricio Vargas

“Melissa brings a broad range of investor relations and capital markets experience at pharma companies that will benefit Procaps as we accelerate the delivery of our innovative pharmaceutical solutions and drive new expansion initiatives. Importantly, this new position will eventually be based out of our Aventura, Florida location as we expand our footprint in the U.S.,” said Vargas. “Melissa is a deeply experienced and respected investor relations professional, and her expertise working to communicate our strategy and growth opportunities externally will be instrumental as we continue to strengthen our investor and industry relationships with key stakeholders.”

According to Procaps, Angelini previously served as Innovation & Investor Relations Officer at Brazilian multinational pharmaceutical company Blau Farmacêutica, and was also LATAM Head of Alliance Management & Investor Relations at healthcare firm GBT Grupo Biotoscana where she co-led the IPO of the  group in 2017 through a $429 million USD deal.

Angelini was also Investor Relations Client Executive Manager at investor relations firm MZ Group, where she was responsible for the Investor Relations and Strategic Partnerships Department. Angelini holds an MBA in Finance from Insper Instituto de Ensino e Pesquisa, Brazil, and is fluent in English, Spanish and Portuguese.

“I am honored to be joining Procaps at such an exciting inflection point for the company. With their recent entrance to the U.S. on Nasdaq, and announcement of expanded production capacity in the U.S., I will be highly focused on communicating the Procaps story to a broadening group of worldwide investors and shareholders,” said Angelini in a statement.

The soft gelatin capsule (“Softgel”) is a solid dosage form composed of two gelatin films that contain semisolid or liquid active pharmaceutical ingredients (APIs) protected by an external, hermetically sealed cover. Softgels are designed to deliver high precision dosage by achieving homogeneity of ingredients. The Softgel capsules are well recognized in the supplement, OTC, and the prescription market for improving patient adherence to the drug and therapy by facilitating swallowing due to the texture of its shell.

The acquired facility is already FDA (US Food and Drug Administration) approved and, in addition to the manufacturing capabilities, it offers development and analytical testing capacities. Core assets included in the acquisition were several Softgel encapsulation lines, new critical support systems, automated packaging line capabilities, as well as development facilities including pilot and scale up capabilities. Procaps Group says it expects the facility to begin operations in May of 2022.

Ruben Minski, CEO of Procaps Group

“This acquisition is an important milestone for our strategy of bringing soft gelatine-based innovations to all corners of the globe both via integrated CDMO solutions and our own developments,” said Ruben Minski, CEO of Procaps Group. “This facility has a strong production track record and audit history, and we believe it will become a Global Center of pharmaceutical excellence. We are privileged to welcome the current facility employees into the Procaps Group family. Operationally and strategically, this expansion is an important investment for us. We believe the estimated increase in production capacities will provide us the opportunity to deliver a wider product array as we move even closer to our customers in the North American markets and to implement our ambitious global growth plans.

“This significant, long-term investment in both our manufacturing and R&D infrastructure underscores the commitment of our corporation to deliver better health and nutrition to the world through Innovative oral delivery systems. We believe our expansion to the U.S. will provide us a wider capability of delivering our pharmaceutical products to our strategic partners and ensuring the continued quality of their most valued asset, their brands.”

Minski concluded in a statement shared with Finance Colombia: “We believe our new facility in Florida is strategically positioned to improve our supply chain efficiency and the cost of distribution for our products in terms of proximity to customers, especially for the NAFTA area, the largest pharmaceutical market worldwide. We anticipate that new product innovation will also be fueled by our proximity and the ability for frequent dialogue with new customers. Moreover, we believe we can now offer a new and flexible alternative to our CDMO customers in North America and provide them better access to our innovative technologies for oral delivery systems. With this facility having the capability of complying with the regulatory standards of several regulators worldwide, we expect new European and Australian customers will also show interest in having this facility develop and supply products and solutions for their own markets.”