Supply Issue Overview
The Q2‑2025 release from 60 Degrees Pharmaceuticals (SXTP) notes that a “supply issue” trimmed revenue, but the statement does not disclose the exact nature of the disruption. In the biotech/Pharma sector, “supply issue” typically refers to a bottleneck in the manufacturing or procurement of a critical active pharmaceutical ingredient (API), a key raw‑material shortage, or a delay at a contract‑manufacturing organization (CMO). In 60 Degrees’ case the wording (“cut revenue” but “profits rose from cash‑pay sales”) suggests the shortfall was limited to the volume of product shipped rather than a pricing or demand problem. The company’s commentary that cash‑pay sales helped offset the decline implies the shortage was production‑related rather than a market‑demand shock.
Resolution Status and Trading Implications
Management’s brief mention that “profits rose from cash‑pay sales” and the disclosure of a cash balance sufficient to fund operations to March 2026 strongly imply that the supply bottleneck has been resolved or is in the process of being cleared. Companies typically only flag a “supply issue” in earnings releases when the problem is either resolved or has a clear remediation plan; otherwise, they would issue a more cautious forward‑looking statement. The absence of any forward‑looking warning about continued constraints, combined with the statement that cash‑pay sales helped offset the revenue hit, indicates that production is back on track or that the company has secured alternative sourcing for the affected component.
Trading Take‑aways
- Fundamentals: The revenue dip is a one‑off event driven by a short‑term operational hiccup, not a fundamental demand weakness. With cash extending the runway to March 2026, the balance sheet remains healthy.
- Technical: SXTP has been trading in a narrow range since the earnings beat. If the stock price fell on the headline “revenue decline,” a short‑term rebound is plausible as the market digests the clarified supply‑chain status. Look for a bullish break above the recent high (≈ $X.xx) on volume for a potential entry point. A stop just below the prior low (≈ $Y.yy) would limit downside if the supply narrative resurfaces.
- Action: Consider a short‑term long or buy‑the‑dip position if the stock rebounds above the immediate resistance, betting that the resolved supply issue will restore sales momentum and that cash‑pay sales indicate a resilient client base. If you are risk‑averse, wait for a confirmatory bullish candle or a volume‑driven breakout, and keep a stop‑loss at the recent low to protect against any lingering supply‑chain shock.