Why is Assertio Holdings, Inc. (ASRT) stock rising to skies in aftermarket?

Assertio Holdings, Inc. (ASRT) has seen a tremendous push of 46.85% in the aftermarket. However, the last trading session concluded at $1.11 with a decrease of 2.63%.

Third Quarter 2021 Financial Results

ASRT announced third quarter 2021 financial results on 4th November 2021. The Company continues to work on resolving historical legal issues in the third quarter of 2021, taking significant efforts toward resolving some matters in a way that management believes would allow it to invest in long-term development. Moreover, the Company recently concluded its federal antitrust action with Glumetza for $7.0 million. This includes a $3.85 million class-action settlement that still has to be approved by the court. Not only this, but the Company also reached a settlement agreement for its securities class action and associated derivatives, for a total of $1.2 million.

Furthermore, ASRT’s effective implementation of its structural adjustment program has resulted in financial reductions. Due to the expected year-over-year decrease in product sales, cost savings have resulted in significant increases in net income, adjusted EBITDA, and operational cash flows. During the third quarter, the Company earned $4.7 million in net cash flows from operations, which included $7.0 million in litigation settlement payments. As of September 30, 2021, the Company has a cash balance of $58.7 million. Lastly, on November 1, 2021, a $4.8 million principal payment was paid on the senior secured loan, retaining a $70.8 million amount due in 2024. 

Second Quarter 2021 Financial Results

ASRT released second-quarter 2021 results on 5th August 2021. The Company recorded net product sales of $24.8 million in the second quarter and $51.2 million in the first half of 2021. The improved commercial platform, which includes a digital omnichannel strategy, is being well received by the Company’s diverse product portfolio. As a result, the Company’s net product sales outlook for the entire year has been increased. During the second quarter of 2021, the Company remained focused on addressing historical legal issues and took significant progress toward resolving some issues in a way that experts believe would enable it to invest in long-term growth.

Moreover, the Company’s loss for the quarter includes an $11.3 million litigation reserve as a result of such actions. Aside from the effort done to address some legal concerns, the Company’s effective execution of various cost-cutting measures to minimize its operational costs is likely to exceed its previously announced objective of $40.0 million in 2021. The Company performed a one-to-four reverse split of its issued and outstanding common shares on May 18, 2021, in order to comply with the NASDAQ listing requirements. Lastly, the Company adopted a reorganization strategy that it thinks would allow it to continue to supply innovative goods to patients while also better positioning itself for future success.