Rafael (RFL) Q1 2025 earnings summary

Executive summary

• Pending merger with Cyclo Therapeutics expected to close in the first calendar quarter of 2025, shifting strategic focus to Trappsol Cyclo™ for Niemann-Pick Disease Type C1.

• Cyclo's pivotal Phase 3 study for Trappsol Cyclo™ is fully enrolled, with interim results expected mid-2025 and NDA filing decision after analysis.

• Rafael Holdings operates Healthcare, Infusion Technology, and Real Estate segments, with recent acquisitions of Cornerstone Pharmaceuticals and Day Three Labs.

• Evaluation of other operating entities and portfolio assets is underway in anticipation of the merger.

Financial highlights

• Net loss attributable to Rafael Holdings was $9.0 million ($0.37/share) for Q1 FY2025, compared to $3.6 million ($0.15/share) year-over-year, mainly due to higher R&D and unrealized investment losses.

• Total revenue for the quarter was $128,000, up from $68,000 in the prior year, driven by Infusion Technology and real estate rental income.

• Cash, cash equivalents, and marketable securities totaled $54.3 million as of October 31, 2024.

• Unrealized losses on investments in Cyclo and related convertible notes totaled $6.0 million, up from $2.1 million year-over-year.

• Research and development expenses increased to $1.3 million from $0.5 million, mainly due to consolidation of Cornerstone and Day Three.

Outlook and guidance

• Management expects current cash, equivalents, and securities to be sufficient for at least the next 12 months.

• Strategic focus will shift to Trappsol Cyclo™ as the lead clinical program post-merger, with a decision on NDA filing expected after interim analysis in mid-2025.

• The merger with Cyclo is anticipated to close in early 2025, pending shareholder and regulatory approvals.