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Date Submitted: 09/23/2012 05:54 PM

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From 2010 to 2011, Pernix Therapeutics’ sales growth rate significantly increased from 19% to 82.4%, respectively. This increase resulted from a 74% increase in gross product sales as well as a 71.1% increase in co-promotion and other product related revenue.

Launch of Natroba

In August of 2011, Pernix began the sale Natroba, which is a product used for the treatment of head lice. Natroba made up 16.1% of gross product sales in 2011, while it did not make up any sales in 2010.

New Formulation of Cedax

Pernix acquired Cedax, which is an antibiotic for middle ear infections, early in 2010 and launched it later in the year. However, they released a new formulation of the product in January of 2011. The launch of the new formulation increased the sale of Cedax throughout 2011 and its sales compiled 21.5% of gross product sales during the year.

Generic Products

Pernix acquired Macoven, who makes the generic forms of Pernix’s products, in December of 2010. Therefore, it did not contribute the gross sales until 2011. The sales of Macoven’s generic products made up for 13.5% of the total revenue in 2011.

Co-Promotion of Products

Pernix also has entered into agreements with other companies to co-promote products. In some instances, Pernix owns the product and the other company will contribute to the promotion of the product. In return, that company would receive a percentage of the revenue earned by that product. In other cases, Pernix will help market another company’s product and receive a percentage of their revenues from that product. In 2011, Pernix entered into a co-promotion with ParaPRO for Natroba that resulted in an 86% increase in the revenue from co-promotions.

Cost of Revenue

From 2010 to 2011, Pernix’s cost of goods sold (COGS) to sales ratio increased from 16.4% to 33.9%, respectively.

Increase in Gross Product Sales

Gross sales increased from 19% to 82.4%. This increase in the amount of sales has a direct effect on the cost it takes...