SWKH - Earnings call transcript Q1 2024 | SWK Holdings Corporation

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Operator

Good morning, everyone, and welcome to the SWK Holdings First Quarter 2024 Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Jason Rando. Sir, the floor is yours.

Jason Rando

Good morning, everyone, and thank you for joining SWK Holdings First Quarter 2024 Financial and Corporate Results Call. Yesterday evening, SWK Holdings issued a press release detailing its financial results for the 3 months ended March 31, 2024. be News the Releases. can of Relations release under swkhold.com press found Investor in section The

we'll forward-looking expectations these operations, not current allocation expectations, you Before to events statement Today, our should and make today's and statements. the making based beginning cash call, about our strategy, following regarding regarding I are circumstances including forward-looking expectations, about future statements would our future statements resources. like be plans, undue on on certain reliance place and our capital These statements statements. and

our Actual these the results information, SWK Holdings may result from forward-looking risks SWK the differ in events and obligation section we any a of Factors new disclaims otherwise. other including materially Holdings in SEC update due make detailed and to filed information the contained with to statements, SEC time those time. of future to as XX-K uncertainties, whether Risk filings with or

SWK results. call update on from on an quarter corporate XXXX me today's first provide Staggs, financial and is President CEO, will SWK's Holdings Joining and who Jody

Jody, go ahead.

Jody Staggs

burn $XX.X assets. of by you, XX% segment and and tangible near Thank high joining operating and SWK's highlighted first in partner everyone, may our growth quarter Jason, of million, acquisition purchase to for certain revenue exclusive reduces signed were CDMO-related results to an conference quarter Finance that XXXX lead first Enteris thanks, segment agreement the while option a our strategic call. with a of all-time the a

to loans focus term life business companies is first product on $XX and lien investments. with core commercial royalties stage a million science SWK's financing $X million do

finance year-over-year network developed experience, XX.X% underwriting during and segment over achievements and led effective quarter our book. have to niche the evidenced and $XX.X million core a million, a increase $X our XX.X% gross the first $X.X portfolio million. direct portfolio concentrated a despite X origination, coupled being have to with an on $X income receivables million the adjusted segment in this non-GAAP $XXX.X These increase generated management. Finance were yield firm, in revenue net of of functions enabled performance and year-over-year a for GAAP capabilities as in profitable of XX% strong credit impacted We a generating spanning decade Finance realized quarter, remain to These negatively million and loan by impairment yield. net to income in our segment XX.X% This a extensive

are competition on royalty actively constructive cognizant opportunities pockets and finance of are life of remaining science We the market. pursuing science market and multiple finance while loan increased life in certain the

competitive While a to believe many we size remains competitors focus competitive SWK's on where sub-$XX differentiator. sponsor-backed less million our a grown market large focus have opportunities, the must on they of

first up chewed fee. the revenue guaranteed expect quarter. guaranteed an division During partner first signed in third X to first option the quarter, every April, granting the single-digit payments with receive partner, Enteris asset low million-dollar and are to and payment exclusive In revenue a exclusive guaranteed assets fees certain Enteris in option purchase purchase strategic option and for payments. received months, option exchange tangible we agreement our a revenue X-year The the the we

Our first payments. revenue quarter financial or any option results either guaranteed did fee not revenue from include the

in business our science midsized on companies. partner work SWK focused and colleagues agreement provides we duration reduces The at of Enteris life our the immediately opportunities with to investing over small allowing increase project prioritize specialty business, pipeline on As cash believe or better fourth business also the will on to and our new commercial the the while we agreement our be Enteris, and the highlighted burn generate the finance stage agreement. breakeven to quarter call,

for our share in our book Since program. XXXX, compared an share cost cost -- quarter March $XX.XX, value back XX,XXX per to close, we March the of to the period. XX, shares was increase $XXX,XXX. a XX shares during repurchased total bought repurchase X% year additional quarter. a at $X XX,XXX a We million total ago of Turning At $XX.XX

increase financing book tangible $XX.XX, an approximately value share totaled Non-GAAP per period. the year ago XX% from

quarter For in finance approximately was as same largely realized of was exception the expected with the the summary, XX% first the the prior the of portfolio versus the -- quarter year. of period impairment. million for of yield XXXX, XX% receivables In XX.X% first $X loan XXXX

stage science additional we capital prioritize our that program. to closing transactions will to borrower exploring and fit royalty via and nonaccrual criteria, For selectively our outcomes, for underwriting with capital partners buyback returning life our realize the XXXX, shareholders loan paths of positive commercial remainder working

With the call that, questions. let's open to

Operator

Instructions] from first Street. is [Operator question Your from Mark coming Argentino Lake

Mark Argento

kind quick could just What Jody, two, your One, the just a you was of right now? or ones. base then lending of couple capacity what's touch it? And on impairment?

Jody Staggs

Thanks, Yes. Yes. Mark.

impairment which XX the So was [ is situation in out, at ]. the $X.X work at our million a to loan, carried remains there ongoing. restructuring was Yes, Trio XX

So likely it but than business -- It some thought. goes we little a more bit have restructuring remain And a the would to would it's quicker little as than there's disruptions. goes positive think that, towards we was be the -- happened rush thought. the potential I we through outcome here, have

was It happened given was a further only of -- out U.K. get -- borrower. of few full -- was structure impairment -- We're we it, a under it me, that appropriate. from positive the a and restructuring, we'll done a We've those. we little here. was as analysis our not what this excuse positive do Given write-up felt

definitely role learning need and here. that think, dive understand think I do we'll There's this deep happened, and my use if as we a I played to other a some experience. that, dynamics mind, a in

capacity, the our as -- revolver revolver In is stand the we terms of -- we undrawn. lending today,

of I a few got cash. think we've dollars million

team and But we we're million to capacity, of I $XX $XX we've We've have some the say, million the let's and things to what undrawn million. that. which we million plenty $XX would to capacity. $XX liked about have I we some year-over-year, -- outstanding. The like -- was in million $XX think of So commitments have talking closed year-to-date, about We is have to year-to-date, about submitted proposals done proposals up of yesterday of $XXX and actually million deals. have got

player of there we're doing has markets the The there of bit originating So -- and a competitive, that's we're the I turned proposals. We're out market think a alternative new more or submitting there a market, bit running We're for higher, potential out some playbook. companies. in sort we're our finding out partners. of -- an general with dynamic equity these X that's moving both plus --

but doing companies drastically we anything to there So proposal get I going hustling we're should differently, the sure of think think out staying and every to process, in closings. our our we putting that team forward I've be challenged the of to best day we're are things some sort making don't be proposals, through doing these different, other front

Mark Argento

guys equity And helpful. broader raising now? That's capital? markets equity ] then portfolio in do the your how of Or additional companies capital right do you like [ markets has of terms any accessed

Jody Staggs

Yes. Yes.

and suspect have that companies well, given private raised -- evaluating that, as those are are capital public others some have do it's we I recently, company one So open.

boarding for refinanced cash great double-edged portfolio a life It's equity. companies, ] We our more [ company. it's So science sword.

raise modestly ability they things make when So loans, does say, I have it's good. some originating important particularly challenging. It that to equity, new are would more

Operator

[Operator is coming next Instructions] Your question from Koch. William

Unknown Shareholder

Koch shareholder. not Bill person. a financial I'm I'm calling. a is This

great conference situations Pfizer but they the with a they how big so questions, really questions. are, like that reason because with the is -- they mean, some I'm only had like deals, that lot -- have competed the some defense it's this they drugs. Unigene financial -- fact, in ago. criminal and why shareholder I'd a have the did, questions, all I XX, I -- formulate of really years, this morning. were years out, though out -- and I'm I why of I Enteris, sort like the and in, is deals had company. fact, -- only lot The almost this them Unigene -- like stuff never be and a But stock this I'd In I like couldn't The the that with and Unigene with back the of is potential all blockbuster a to couldn't owns worked XX I I SWK don't just question I given Enteris to actually, are, that I but of of call a going reason know found my last think, owned Emisphere had I'm to night I'm through then lawyer. is shareholder, what potentially given going numbers --

should I if or just e-mail. -- asking start could sure not I'm So I questions an send could you if

Jody Staggs

Yes.

maybe me SWK's happened, it let sense Unigene of involvement around in a frame -- kind you me makes kind too, maybe can through and to and because of transition. call on for what's get Let I a lot us it specifics the this of walk way,

really wow, we with saw at it's their Enteris, and go time, in GLP-Xs, involvement And purchased license the thesis might peptide IV certain They're transaction some oral. we technology. was, Cara. ago, yes, molecules the thought, from have cool. signed hey, things with of is been and we years ago. X -- to this is Fast helping this pretty they So cool were There and interesting the pipeline. over a and the the And been X sort small Emisphere years had

a and So we technology, liked like lot. validated that we felt that

Kind say missed. was certainly wasn't and of for hold would the fast the that. great, would of responsibility kind say window forward, I we execution I

And to some we've probably window but There things to additional close they're folks was wasn't missed. there execution window done. was couple about And So when times, a sort talking great. some the of X- of or licenses. again, X-year was a get still opportunities come

as now?" doing in So said, when we "Hey, me business what value doing put add we're really the and we at looked CEO, can Board that

financials, was situation. you at look if our And cash burning it a

which business for do. Enteris, So we wanted we that really And our were to business. downsize the sending us made money to to of none decision finance

we really kind of So There's classic around new we refocused Shields, reduced named a operations. CEO that the and Paul there CDMO headcount.

types in So on Phase their X and sort some focus Phase and those types X. evaluate dosing of helping right dosing companies unique now

Peptelligence. do have still we to There some still some are licenses So there. efforts

monetizing a of it's times, talking unfortunately, not think years come As mentioned, and to but the people, couple for probably not closed, X where we've not I all the it was we're close way ago. is window that IP but --

Unknown Shareholder

ago mean, was an had because Emisphere technology years -- Emisphere's for technology [ into guess Well, over the [indiscernible] that I all much studies be the time calcitonin shown, kind Novo -- API I Unigene's by oral Okay. was those actually I think, and believe, yes, -- of to ] of here, better $X delivering in was bloodstream delivery but I that billion. in Emisphere terms than bought

So big sort of you're that's money has move why thought kind saying wow, -- Enteris going of not what some forward some But like like, this maybe to to I can that's they -- happen. guess I SWK and huge that. is deals

Jody Staggs

some Cara I still there. thesis. is There's the We would purchased what we it's some say saying That our exactly million. look, I We of -- for, exactly we it think, But you're $XX given thought. up. haven't license. got efforts

and in is the think be in but those -- we we weeds we -- and thought. And don't at here, this pipeline the huge same time, So work about could a -- scenario. get GLP-X, was I this exactly there thought your things want so to all on upside saw too the what some I thesis

Didn't points But was idea. think crazy don't have think would hoped. are it well I like I again, work your So taken. a we out yes,

companies' do I of comment And have pharma look say last API to large the seen what of capabilities. -- terms it's go. where them to you data And certain they it from of would you're in right, -- any dosing is, technologies, partners, out have we've talking most at internal -- just some there if biotechs, of from they guess I best needs the is Peptelligence from technology like the these getting

that's -- However, that always royalty, a is a get to is enough a differentiating factor someone challenge. it to pay

great. maybe X%, you API to they it the milligram get say, So if with X%, a pay know or it of versus the can get royalty someone wrestling Is awesome. needs there. and we that's go XX% enough So coverage valuable need?" what That's can the what, we "You you're for to always that's where still up

Unknown Shareholder

it. Okay. All right. appreciate I

Jody Staggs

hear to to happy we'd Absolutely, I'm call, what on love yes. And that, there. and views on to happened your feel of chat free sort

Operator

queue. further no are the There questions in

Jody Staggs

call. team has Well, day. Bill, I'm is thanks joining today around thanks tomorrow reach The like and out for the you'd for around a to Mark if today. and good everyone and and the hope questions, Bye-bye.

Operator

everyone. This concludes Thank you, event. today's

disconnect have day. wonderful and may You for this Thank your time, participation. a at you

SWK (SWKH) 16 May 242024 Q1 Earnings call transcript