ImmuCell outlines cautious H2 outlook as capacity expansion supports First Defense suite

Earnings Call Insights: ImmuCell Corporation (ICCC) Q2 2025

MANAGEMENT VIEW

* Michael F. Brigham, President and CEO, stated that ImmuCell is “in the midst of a very positive transition,” having completed its investment to increase production capacity for the First Defense product line to support $30 million or more in revenue per year. He acknowledged the process “took longer than we had planned, as the process was plagued by certain contamination events and other challenges,” but confirmed completion and a favorable outlook.
* Brigham reported initiation of investigational product use studies for Re-Tain, explaining, “While, of course, we would prefer commercial sales under an FDA approval, we'd like to say that we are going to get paid in data. This data will inform our exploration of strategic options and the future plan for this product as we continue to anticipate the FDA approval.”
* Timothy C. Fiori, CFO, stated, “Product sales during the second quarter of 2025 increased by 18% or $972,000 over the second quarter of 2024... Gross margin as a percentage of product sales increased to 44% during the second quarter of 2025 compared to just 22% during the second quarter of 2024.” He also noted a period of increased production output allowed the company to “effectively eliminate our backlog of orders and rebuild inventory and distribution.” Fiori cautioned that “refilling the distribution pipeline after an extended backlog likely provided a temporary boost to sales.” He added, “We may experience a softening in sales during the second half of 2025.”
* Brigham highlighted the traction of new product formats of First Defense, stating, “the First Defense product line now should be seen as a suite of related products with expanded uses and appeal.” He emphasized ongoing focus on recovering from disruptions and capturing increased market share.

OUTLOOK

* Management indicated the inventory rebuild is “not expected to repeat,” and warned of a potential “softening in sales during the second half of 2025.” Brigham elaborated that a full commercial launch of Re-Tain will not proceed until FDA approval is obtained, a validated aseptic fill solution is in place, and adequate cash is available to produce commercial inventory.
* The company plans to complete investigational product study and data analysis for Re-Tain during Q1 2026. No specific new guidance figures were provided for revenue or earnings.

FINANCIAL RESULTS

* Product sales during Q2 2025 increased by $972,000 over Q2 2024. Trailing 12-month product sales increased by $5.1 million over the prior period. Gross margin increased to 44% in Q2 2025 from 22% in Q2 2024.
* Adjusted EBITDA was $1.4 million for the quarter, compared to negative $619,000 in Q2 2024. Cash increased to $6 million as of June 30, 2025, from $3.8 million at December 31, 2024.
* The company refinanced a portion of its bank debt, reducing its interest rate and “avoid[ing] large balloon payments that were due during the third quarter of 2026 with a new 5-year note payable through the third quarter of 2030.”

Q&A

* Andrew Rem, Odinson Partners, asked about organic growth excluding backlog sales. Timothy C. Fiori responded, “No, I don't think we are going to specifically mention a number. I would mention that the backlog at the end of March was...$4 million. And we have worked through that backlog during the second quarter with some of the orders being canceled, most of them being filled.”
* Rem inquired about the status of Re-Tain’s FDA approval and facility inspection. Brigham explained, “The challenge...is that we do use a CMO for filling...and that CMO is under -- has to resolve F 483 inspection observations. I wish...I could put a time line on that. It's extremely frustrating. It's been going on for over a year now.”
* Rem asked about the inventory close to expiry for investigational use. Brigham replied, “the answer is all of it. This is product that was produced in anticipation of commercial launch. It will all be used for investigational. We will not generate revenue.”
* Rem questioned possible strategic options for Re-Tain. Brigham outlined, “the #1 priority would be...bringing in a larger marketing group...We would be looking for financial support and marketing support to take this to the next step.”
* Rem asked about timing for expanding capacity from $30 million to $40 million. Fiori stated, “There's no change in what we've announced in the past, which is essentially that, that project is on hold.”
* George Melas-Kyriazi, MKH Management, asked about traction for the new spray-dried colostrum format. Fiori said, “we definitely did have our first sales in Q2, and we're going to continue to be on the market.” Brigham added, “it's a new niche...so far so good.”
* Melas-Kyriazi asked about regaining customers and sales force focus. Brigham responded, “it's the end customers that just have to switch to a different product...Those are the ones that we got to get back.”
* Melas-Kyriazi remarked on improved net debt and backlog. Fiori clarified, “we were able to refinance a couple of our loans. And as part of that, we eliminated a balloon payment right around $2 million. And so the debt in total is around the same amount.”

SENTIMENT ANALYSIS

* Analysts’ tone was largely positive, with recurring focus on organic growth metrics, Re-Tain approval status, and recovery from past operational headwinds. Questions pressed for detail on sales sustainability and strategic direction.
* Management maintained a confident and transparent tone during prepared remarks, but expressed frustration and caution in Q&A, particularly regarding factors outside their control: “It's extremely frustrating. It's been going on for over a year now.”
* Compared to the previous quarter, both management and analysts showed increased optimism about operational recovery, though analysts remained attentive to risk factors and future growth hurdles.

QUARTER-OVER-QUARTER COMPARISON

* Management’s tone shifted from emphasizing recovery from contamination events in Q1 to highlighting the completion of capacity expansion and elimination of backlog in Q2.
* Strategic focus moved from simply restoring supply and gross margin to leveraging new product formats and exploring strategic partnerships for Re-Tain.
* Key metrics improved, with product sales and gross margin up significantly. Operational questions shifted from contamination risk to execution of new launches and market share recovery.
* Analysts in Q2 focused more on sustainability of sales growth post-backlog, and on the timing and strategic implications of Re-Tain’s launch, compared to Q1’s attention on margin and capacity expansion.

RISKS AND CONCERNS

* Management identified the risk of “softening in sales during the second half of 2025” due to the non-recurring nature of the inventory rebuild.
* The Re-Tain commercial launch remains delayed by unresolved CMO inspection issues, which are acknowledged as largely outside the company’s control.
* There are cash management considerations regarding additional capacity expansion, with management stating, “timing is everything, cash flow is everything.”
* Analysts expressed concern about customer reacquisition and sales force effectiveness following the period of supply disruption.

FINAL TAKEAWAY

ImmuCell concluded the quarter with a strengthened operational position, having completed its capacity expansion and eliminated its order backlog, which supported strong product sales and gross margin improvement. Management emphasized a cautious outlook for the second half of 2025, expecting sales moderation as the temporary boost from inventory rebuild subsides. The company’s strategic focus remains on capitalizing on the expanded First Defense product suite and advancing Re-Tain toward commercial launch, with careful attention to regulatory, cash flow, and partnership considerations in the coming periods.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/iccc/earnings/transcripts]

MORE ON IMMUCELL

* ImmuCell Corporation (ICCC) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4814077-immucell-corporation-iccc-q2-2025-earnings-call-transcript]
* Financial information for ImmuCell [https://seekingalpha.com/symbol/ICCC/income-statement]