ProPhase Labs to expand Pharmaloz Manufacturing subsidiary

ProPhase Labs provided a business update with respect to its wholly-owned contract manufacturing subsidiary, Pharmaloz Manufacturing. To meet the growing demand for its products and services, Pharmaloz is acquiring new equipment which is expected to double its current capacity for pouch packaging by the second quarter of 2023. Pharmaloz is also planning for expansion of its lozenge manufacturing business. Altogether, these expansion initiatives are expected to lead to a 200% increase in capacity for 2024 as compared to 2022. It is currently expected that the Pharmaloz expansion will be funded entirely from internal cash flow generated from profits generated at the operating subsidiary level with no capital required from the parent company. Pharmaloz had two new customers enter full production in 2022, resulting in the addition of over 3.5 million units, mostly in the fourth quarter of 2022. The company formulated and launched seven new products for new and existing customers, totaling 1.75 million units. Additionally, the company added three new customers which are expected to enter full production in 2023, representing an estimated 1.0 million additional units. Pharmaloz brought customer micro testing in-house in 2022 and produced over 50 R&D sample runs for customers. Following these successful sample runs, the company is currently finalizing a contract with a potential new customer that could add over 6.0 million units per year and negotiating with another potential new customer that could add an additional 6.0 million or more units per year. Pharmaloz is also in the early stages of discussing options with four other potential new customers and is currently formulating liquid-filled lozenges for its customers, with additional equipment for these products expected to be added to its current production line in 2023.