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Newtek Business Services Corp (NEWT) Q2 2020 Earnings Call Transcript | The Motley Fool

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Newtek Business Services Corp (NASDAQ:NEWT)
Q2 2020 Earnings Call
Aug 7, 2020, 8:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to the Newtek Business Services Corp. Q2 2020 Earnings Conference Call. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Mr. Barry Sloane. Thank you, sir. Please go ahead.

Barry SloanePresident, Chairman And Chief Executive Officer

Thank you very much, and welcome, everyone, to our second quarter 2020 financial results conference call. Joining me on today’s presentation is Chris Towers, our Executive Vice President and Chief Accounting Officer. Also, for those of you that would like to follow in on the conference call’s presentation, you can go to our website, newtekone.com, N-E-W-T-E-K-O-N-E.com, your business solutions company. You can go to the Investor Relations section and go to Presentations. You’ll be able to follow along on the PowerPoint. I’d like to point everyone’s attention to the forward-looking statement comment on page number one and then move forward to page number two. Our second quarter 2020 financial highlights. Newtek reported at the market close yesterday record financial results across several key metrics for the three and six months ended June 30, 2020.

This was a great quarter for us. We’re extremely proud of the way our company shifted due to the pandemic. We had to immediately change and focus our business model to accommodate the altered economic landscape. We basically ceased our forward movement on our pipeline of SBA 7a loans, which has obviously been our steady business for over 17 years, and positioned ourselves to participate in the SBA and Treasury and a federally sponsored PPP program. We obviously look at the shifting, and our performance is the mark of a company that is able to excel under adverse circumstances. As we go through this presentation, please note that we’ve got a great second half to go through in 2020. And we also encourage our shareholders to look at Newtek on a long-term basis. We look forward to giving a forecast for 2021 that will be a little bit more normalized than the lumpy forecast that we will or the lumpy results that we’ll have in this calendar year 2020.

We have already declared a dividend for the third quarter, which we’ll talk about. We believe we’ll have solid dividend distributions for the remainder of 2020. And we are releasing a forecast, which we had pulled back at the end of Q1 for adjusted NII in the range of $1.80 to $2.30. I know it’s a fairly wide range. We really want to be fair and honest to our shareholders, all stakeholders and the investment community. And that range is predicated on an additional PPP program and other things that are going to be occurring going forward. We’ll get into that as we get deeper into the presentation. But we feel comfortable with this range. There’s a variety of different probabilities here. I feel very comfortable on the lower end. It’s conceivable.

We could actually take out the upper end, depending upon what gets legislated. And obviously, if you take a look at the success that we had in the PPP program economically for the second quarter, we’ll talk about the next program, the likelihood of it happening, where it stands, etc.. Company is in real good shape from a long-term perspective, both with respect to income generation and quality of the portfolio, which we’ll go into. Moving to slide number three to go through this fairly quickly. Our total investment income, 230% increase quarter-over-quarter this year versus last. Net investment income, a change of $1.42 to $0.06 loss. NII typically excludes capital gains. The income from PPP was considered regular income, therefore, hit the NII number, which is why we have a bit of an anomaly in NII and adjusted NII. Third bullet, adjusted NII, 140% increase, $1.37 per share, a record for three months ended June 30. Net asset value also increased to $15.66, a nice gain over the prior quarter. We’re very happy with our debt-to-equity ratio of 1.2.

We aspire to keep that debt-to-equity ratio low even at the end of the third quarter. So we’ve got plenty of ability to lever the balance sheet in here. We could talk about our risk and why we think we are capable of holding higher levels of debt than some of my other competitors in the BDC space that have hidden leverage in their asset quality. Total investment portfolio increased by 13%. Looking at six months, 123% total investment income gain six months this year, six months last year. Net investment income, $1.42 versus a loss of $0.11. Adjusted NII, $1.58 versus $1.01. I should point out that we have declared a $0.58 dividend for the third quarter. So we feel pretty good about where we are with respect to paying up dividends and paying amount of income, which is our dividend policy. Moving to slide number five, Paycheck Protection Program. Most of our investors listening in are very familiar with the PPP program. We’ve been talking about it significantly, so I’m not going to get too deep into the weeds in explaining what it is.

There’s information, obviously, in this PowerPoint and in previous press releases. I think it’s important to reference and remind the investment community that, in addition to earning fee income, the CARES Act also provided for the payment of principal and interest on our current portfolio of SBA loans. To repeat that, this is not a deferment. This is actual cash payment made by the SBA and Treasury directly to us, so our borrowers have been relieved of that duty. It’s almost like they got a capital infusion during this period of time, which is valuable, particularly given the difficult economic climate that we have. I think as we finish off on this slide number five, important to note, there’s currently bipartisan support in Congress for the extension of the PPP program. I think this is pretty much agreed to between the Democrats, the Republicans and President Trump. There’s been dialogue that they pretty much have an agreement in terms of what this will look like. Also important to note that there’s about $130 billion, I believe, in leftover money.

So this doesn’t require a new appropriation, but they’re maybe going to top it off with an additional $16 million, which will be used for other SBA-type programs, which we can talk about. Also to note that in the original CARES Act, there was $17 billion put aside for payment of principal and interest. There’s still money left available for that. So if the program does get renewed, there is a possibility that our investor base will receive another three to six months’ worth of P&I. That important to note, that doesn’t need to be appropriated. So clearly, that creates less friction going forward legislatively. Going to slide number six. Our performance in PPP loans, $34.7 million in fees ending June 30, 2020. We believe by the close well, by the close of business on August 4, we funded $1.15 billion of PPP loans. We still have a few left to fund. We anticipate by August 8, that’ll approximately be 10,200 new borrowers. We received, I believe, over 100,000 requests for PPP loans from different participants, adding to our enormous database of customers.

We’re proud to report that we funded two years’ worth of loan production in slightly over four months’ time. And realistically, most of that was done within four weeks. So we’re extremely proud of the staff, the team, the software and the methodology to basically utilize technology to process loans in a very quick fashion in accordance with policies and procedures set forth by the SBA. We partnered with our alliance partners to sell 100% participations in PPP loans, which left us with no balance sheet. We have a very small balance sheet of PPP loans. I think it’s about $5 million or $6 million worth, but everything else was sold in a 100% basis. I think it’s important to note that what we did in PPP really dictates the power of the Newtek model, no branches, no brokers, no BDOs, no bankers. We fitted very well in the confines of the market today where you’re basically driving referrals back to professionals that are providing solutions, whether they’re lending solutions, payment processing solutions, insurance solutions, technology solutions or payroll health and benefit solutions in remote locations.

That’s the model. It works really well, and we’re clearly demonstrating that we’re able to perform and execute on it. slide number seven talks about the CARES Act a little in a little bit more detail. We’re hopeful the Congress will authorize the SBA to extend additional P&I payments. We chatted about that in addition to be able to earning additional fee income. There’s also and once again, I don’t want to get too much into the weeds here, but there is upside portions of the builds and then that Rubio has a piece that would provide long-term funding and significant fee income to lenders like ourselves. There is a bill that has gotten recent support by Young and Bennet in the Senate. That would basically call the RESTART program that would also provide 100% guaranteed financing through the 7a program. So as a lender in this space, we believe we’re in a good spot through corona, and also, obviously, having the government as your partner in many instances is helpful.

Obviously, they want our portfolio to be current. They want our borrowers to be in good shape. Our borrowers employ a significant portion of the citizens of the United States. I think Americans are more and more familiar with the importance of small business. This is our market. This is our space. We think this is our time to shine. Moving forward to slide number eight. These are some additional highlights. We had some residual funding of 7a loans, which we funded during the three months ended June 30, $17.4 million. We’ve announced that we’re restarting our 7a business, extremely selective. We’re looking for companies with an operating history, hard collateral, plenty of liquidity, strong guarantors, paying attention to the geography. And there’s plenty of businesses to provide funding to. Just to pick out a couple of categories; RV parks, marinas, boat dealers, pest control companies, staffing companies, freight companies.

These are all businesses that actually are doing well. Now we don’t want to lend to overheated segments of the market. So we’ve got to be careful in our underwriting. But I think it’s important to note, the worst at times is the best of times to make these types of loans, and we’re looking forward to opening up in the second half of the year. We’re indicating $150 million of funding in Q3, Q4, most of that most likely coming in Q4, as we rebuild our pipeline, and we anticipate having a robust 2021 getting back to 2019 origination levels. We are also restarting our 504 loan program. So we’re looking forward to getting some fundings there in Q3 as well as rebuilding the pipeline. And our conventional lending JV right now is on hold. We are looking to start that up in the future. We’ll talk about the performance of that portfolio, which has been stellar, and we’re looking to grow that business. We think that’s a significant contributor to our business and our business model down the road. On slide number nine, we talk about dividends for 2020.

We just paid a Q2 dividend of $0.56 to shareholders of record on July 15, 21% increase over the second quarter 2019 cash dividend. And we declared a third quarter cash dividend payable on Sept 21. So for shareholders of record all the way out to Sept 21 get a $0.58 dividend. So with the payment of the third quarter dividend, we’ll have paid $1.58 per share for the first three quarters, which will be a 9.7% increase. We, obviously, are looking at the second half of the year with a lot of potential variables relative to PPP, 7a and the portfolio, and that’s why we have to come up with such a wide disparity. Obviously, I think many of you are aware, Newtek is a business development corporation. It’s an internally managed BDC. What we earn, we pay out. Second quarter of 2020 NAV discussion, we chatted about an increase in NAV, $15.66 as of June 30, 2020. As of last night’s close, we clearly traded a nice premium to the market, and we’ve historically done that through. In November, it will be six years outstanding most of our history. slide number 11, just talking about future opportunities in challenging markets.

We’ve seen tremendous changes in our economy based upon COVID. And I think COVID has done several things. Number one, it’s pushed a lot of businesses that were on the cusp in a week already to an accelerated default. Number two, it’s forced a lot of the trends that we’ve seen in the market. So when you see e-commerce further accelerating entities like social media giants, Facebook, Google, etc., those mediums to reach people through social media and e-commerce, obviously, becoming more and more important. Important to note, we’ve got to pay attention to that as well. When you look at what we do in IT, we provide small- and medium-sized businesses the ability to work mobily, securely and remotely. Let us manage your IT. Health and benefits area, clearly, major changes in shifts, particularly with healthcare. We are able to give businesses the ability through a cloud-based payroll solution and health and benefits solution to shift over to us at far less expensive matters and far more efficient than their legacy sales-oriented Paychex and ADP model.

Obviously, in insurance, tremendous changes in policies. We’re able to work with them remotely, just as Geico does, to help small- and medium-sized businesses look at their insurance risks. And then obviously, in the payment space, tremendous shift to the e-commerce landscape. We’re able to help businesses with contactless payments, our Newtek payment systems, which we’ll talk about through POS on cloud. We’re really very well positioned to help businesses meet the challenges in a post-COVID world. slide number 12 talks about sort of our pedigree in the 7a landscape. We’re still the second largest SBA 7a lender as of June 30, including banks, largest nonbank lender, 10-year history of rated securitizations, both AA and A. Everything has upheld their rating. Many other lenders in the small business space are experiencing tremendous stress. We are not. We’ll probably put out some data in the near future, talking about how well our securitizations have held up.

Once again, important to note, the average loan size in the portfolio is a beautiful $179,000 per uninsured piece in the portfolio that gives us great diversification with geography and risk. You could see how important risk diversification is when it comes to geography and it comes to industry type. Obviously, I really wouldn’t want to have a lot of small luncheonettes in Manhattan today. That would be fairly devastating; or for that matter, gymnasiums in New Jersey. So the diversification that we have in our portfolio is fantastic. This is why you do it. It’s extremely valuable, and it’s worked well for our portfolio metrics, which you’ll see. Moving to slide number 13. Growth in loan referrals. For this calendar year, we’re going to be using units versus dollars. The dollars are a little bit skewed based upon PPP issues. But you could see, we’ve been overwhelmed with loan referrals. We’ve received an excess of 100,000 in units for six months. 80,000 came in the second quarter. We’re really, really thrilled about our model. This is great for customer acquisition.

Our database of customer opportunities is very deep, well over one million SMBs in our database to be able to market to and cross-sell. We look at our company versus other fintech companies like OnDeck Capital, Kabbage, Lendio. OnDeck recently wound up merging into another public company for about $90 million. I think their portfolio is rapidly approaching a 40% delinquency rate. Look, I’ve got to say that if they’re getting a $90 million valuation for technology, I’m very proud of what wily built here at Newtek as well as our ability to manage credit for over 17 years, particularly during the ’08, ’09 cycle and the current cycle. All of these providers have got interesting technologies on the front end, but they really do not do a credit analysis. They don’t do credit work like our technologies do. We’re a real 50-state lender, and we’re able to do this across multiple different business silos. slide number 14. Net premium trends in a normal 7a environment are important to us. We talked about the slowing of prepayments and the potential increase in prices, which we were constructive on.

Looking out in the third quarter, we’re seeing prices for 10-year paper north of one 11, and we’re looking at prices of the longer date of 25-year paper north of one 17. The splits are between one 11, one 12 on larger pools, get a bit of a discount, but the premium trends for some of the guaranteed sales, real strong. slide number 15 talks about the seasoning of our portfolio. We’re now at 32.6 months. We’ve shared an S&P analysis on seasoning of portfolios and the issue of businesses being able to survive that default curve and how it really flattens out after 40 months. We’re very comfortable with the market and the portfolio, which we’ll talk about, as well as our ability to liquidate loans and to be able to earn a great dividend for our shareholders going forward. slide number 16 shows our delinquency rates and trends as of 12/31 to 3/31.

We actually improved our currency rate almost to 94% even through the period of March, dealing with the concern about COVID, which really began in February and March. Obviously, with the payments from the government went up to 99% current. We feel pretty good about our customers. We are speaking and reaching out aggressively from a servicing standpoint to all of them. We’re preparing them for October when these payments may cease. We’re working with them. We’ve got dialogue going with respect to them contracting where it need to, expanding where they need to, working on cost control. We are a very active, aggressive servicer. I can tell you that historically, one of the things that the fintechs typically don’t do is they don’t service. We do. We work with clients. We make sure on a going-forward basis that they’re doing what’s best for their business to be able to meet their responsibility to us and the U.S. government. slide number 17 is an example which we do tend to give about liquidation.

We use a 40% severity, which is our historic severity on loss on the portfolio, including cost to collect and interest. This was a client that went bad on August of 2017. Actually, that’s where we provided them the funding. It was a national digital billboard company, been around for 20 years. They ran into trouble. We’re able to sell all of the assets and get all of our money back 100% recovery. slide number 18 is a slide we’ve used for close to 17 years. It shows the net cash created on the 7a loan. slide number 19 shows the income treatment. Moving into a portfolio company review as we get back into the 504 business, we wanted to demonstrate to newbies to our story about the way a 504 loan works, how you get a first conventional second lien provided by the government, which gets taken out by the government. A great product for borrowers. They get a 90% loan to value against commercial real estate with extremely low interest rates. I think the second debenture by the government has got a two handle. I think it’s like 2.75% with a 20-year term on it.

We typically lend at a fixed 5% at a higher rate, but the blended rate is close to 4% with the long am schedule. So it’s a great loan for a borrower. We like this business. Capital One Bank has a facility with us to be able to warehouse it, and the SBA takes out the second. We typically sell the conventional first. slide number 22 shows the return on equity for that type of business. slide number 23 talks about our conventional lending portfolio and our joint venture with BlackRock TCP. We have a portfolio in the JV as well as on our balance sheet, approximately $92 million, 100% current as of June 30, 2020. This is an attractive portfolio. It’s kept loans in different markets, strength of the personal guarantors, liquidity in the personal guarantors. The fact that the personal guarantors have got multiple businesses very well healed, has kept this portfolio performing. We’ve actually got one restaurant in the portfolio that is in New York City. It has been closed, won’t probably open until April, but they have enough liquidity to continue to keep us current throughout the whole process. And that’s the value proposition of our underwriting to make sure we lend to really good businesses.

I think it’s important to note, when you look at the current economic crisis that we’re in, this is a crisis that is caused by a pandemic, and it’s basically been caused by the government shutting down businesses and restricting commerce. Clearly, the initial shutdown was caused to bend the curve in northeastern regions like Connecticut, New York and New Jersey. Substates, particularly in the Sun Belt, when given the opportunity to open have opened and stayed opened, their curve peers, early stages have began to flatten, which makes us optimistic that eventually, the virus and the government shutdowns will be less and less. Obviously, going back to school is a key issue here, opening up the economy is a key issue, and also being safe is a key issue. I think the point I want to make here is this is a very unique situation for lenders where lenders typically encounter defaults because you’ve got a weak economy without much stimulation, whether either created by the government or the own inertia of the business climate.

This is an economy where the businesses are shut and can’t open. And that’s not 100%. It’s in spotty geographies, and it’s in spotty industries. So it’s a market that we think has a very good chance of recovering, recovering well, and we are extremely constructive on our business model going forward, which we’ll talk about. And when we look at what we’ve done in the conventional loan portfolio, if you lend money to good businesses with good value and good guarantors and owners, you can come out OK. slide number 24 talks about our payments business. Obviously, this business has been affected, particularly with a reasonable percentage of retail restaurants. Thank goodness, it’s not dominated by that. But it looks like we’re on a run rate for $1 million to $2 million of EBITDA per month for the remainder of 2020, which we’re very pleased about. And going forward, on slide number 25, this is good data for anybody interested just in economics and business. The Visa, MasterCard and American Express receipts for our clients, down 23% in March, 37% in April, 27% in May, 14% in June, 5% in July.

Now I will say, we’re early in August. But the first five days of August are indicating things are slowing again. And I think they’re slowing again not dramatically, maybe and once again, these are five days. So I wouldn’t say that this is particularly valid. But you’ve got the unemployment benefits that might slow down consumer spending. You’ve got some PPP that might be running out. So it is clear that government stimulus is still required to continue to bridge this economy to when the pandemic is less of an effect and a drag on business. We’re looking for a 10% to 15% decline in the NMS EBITDA. One of our portfolio companies, Mobil Money, has a major impact. That company is primarily dominated by newer cab drivers. Traffic in the Newark Airport was down 90% to 95%. That clearly affected this business, which should throw off close to $1 million in free cash flow. And right now, that’s on a run rate of probably $100,000. But there’s obviously upside from that, and we look forward to air traffic recovering and newer cab drivers having more opportunity.

Slide number 26 gives a good indication of where we see the future of payments. We acquired POS on Cloud. We’re very excited about having our own branded POS system. The long and the short of it is, our POS system is an all-encompassing system that can process payments, integrate with an e-commerce website, in other words, pull up a menu for a business or pull up a retail e-commerce purchase chart from a QR code. Both the e-commerce and the store present combined and integrate into a GL accounting software. We integrate with all food delivery services like Uber Eats, Grubhub, DoorDash. We also have time and attendance on the POS, which integrates right into our payroll solution systems, enabling us to offer payroll, workman’s comp, health and benefits. One complete system. We can brand this for all of our financial institutions. We’re excited about rolling out and hitting on Newtek payment systems going forward. slide number 27, Newtek technology portfolio companies.

We have three of them, Newtek Technology Solutions, our cloud-computing managed service business, Phoenix; IPM based out of New York; and Cloud Nine based out in Louisville, Kentucky. These businesses are doing well. Forecasted 2020 EBITDA, $3 million to $4 million. That’s up from a $203,000 forecast actual number in 2019. We are obviously excited about the opportunities in cloud services, particularly working with the small- to medium-sized business clientele. We talked about payroll and benefit solutions. We think we can help businesses significantly as we move into this COVID-dominated world and where customers and businesses want more cloud-based solutions and want to have their employees have availability to that cloud-based site to take a look at their own benefits and payroll information. slide number 31 is indicative of our historical stock performance. As you could see, the company has been a stellar performer over five years, three years, five-year return, 200%; three-year return, 88.4%; last year, 42%. Our 10-year return, about 800%, which equates about 25% per year.

So I guess, if you all go back and you look at our history, our stock does tend to be volatile. And we’ve had many dips like we’ve had this year. I think we hit a low of $7.58. But the company has got a great management team that’s got a history of being here five, 10, 15 years. We stick together. We figure out as operators and entrepreneurs with an ownership mentality of these businesses, how to make it work, how to overcome adversity, how to shift, how to give the marketplace what it needs given that point in time. slide number 32 is a current event. The SEC held an open meeting yesterday to vote on a rule proposal that would amend a number of disclosure delivery and advertising requirements for mutual funds and BDCs. Here’s the important aspect of it. Commissioners voted on a proposal that is now out for comment for 60 days. That would allow acquiring mutual funds to basically exclude the AFFE disclosure fee from their bottom line.

I know this sounds a little complicated. I’ll try to simplify it in CEO talk. Institutional investors have not been able to buy BDCs pretty much since June of 2014 when the former SEC chairperson decided that the expense ratios for running the business, whether it was an internally managed expense, which is ridiculous; or an external fee, neither to be doubly calculated to keep neutral funds from buying other mutual funds and having investors paying fees twice. To make a long story short, my interpretation of this open meeting is that the commissioners are putting out for comment to allow institutional investors to acquire up to 10% of their total assets in BDCs. Number one, that would increase the shareholder base.

Number two, what happened in 2014 was it excluded BDCs from being involved in the Russell and the S&P 500. This is a potential game changer for BDCs, and we’re very excited about it. We hope this happens and prospectively, would take a market clearing yield in BDCs and prospectively tighten as it would significantly widen the investor base from one that is dominated by retail with some institutional investment to more institutional investment. Moving to slide number 33. This is an important slide, risk for reward. We have historically stated that we believe we have less risk than the average BDC. I think that’s relevant because when you compare look at a market clearing yield, a main street, which has had market clearing yields of six and then at times, eight, currently, I believe. And you’ve got other BDCs that have market clearing yield, like Ares at 11 or Apollo at ridiculous numbers. A lot of that is based upon the risk inherent in the portfolio. I think it’s once again important to note, our assets, not highly leveraged. We don’t have SBIC debt.

As a matter of fact, a lot of our overhang at the end of the quarter is based on government-guaranteed obligations that get liquidated. So we operate at a much lower leverage. We have a diversified portfolio with average credit risks in the loan book of 179,000 floating rate. It’s an asset class we’ve managed over 17 years. And therefore, I think that when you look at what’s the right market clearing yield for Newtek, we think it’s important to take into consideration what the risk is inherent in the portfolio for that market clearing yield. And when you look at a portfolio of assets that are based upon leveraged loans that require five four, five, six times EBITDA turns, means those businesses must grow. They must grow. This is a tough environment for growth. Even if you get a rebound, it’s a tough environment for growth. So we understand the discount that’s applied to others. Relative to us, we’re in a low growth to no growth type lending environment. That’s what we look at. Obviously, businesses that are growing, we don’t penalize them.

We just don’t give them excessive leverage on the advance rate. But I also obviously look at our portfolio, and people believe and it is accurate that these businesses are less liquid. They have less access to capital. The counterbalance to that is, looking at what the treasury and the SBA in Congress has done to provide P&I payments, to provide PPP money, to provide another round of PPP money, we think we’re in pretty good shape here. And we think that the historic risk view of a portfolio like ours is somewhat overstated. Now I do want to comment, our portfolio of loans is very different than a typical fintech lender that makes a loan in 48 hours. We do 20-page credit write-ups. We take all available collateral. We have multiple guarantors of the business owners, anybody over 20%.

We take leans on personal assets, corporate assets, and we’re typically looking at operators that have been around for a couple of years versus start-ups. Entirely different. We’d like you to take a close look at Newtek as a 17-year manager of risk in its portfolio. Then moving to slide number 24. Once again, it’s just a quick investment summary.

And now I would like to turn the presentation over to Chris Towers.

Christopher TowersExecutive Vice President And Chief Accounting Officer

Thank you, Barry, and good morning, everyone. You can find a summary of our second quarter 2020 results on slide 36 as well as a reconciliation of our adjusted net investment income or adjusted NII on slides 38 and 39. For the second quarter of 2020, we had net investment income of $29.7 million or $1.42 per share as compared to NII of $1.1 million or $0.06 per share in the second quarter of 2019. Please note that income related to the PPP is included in investment income in 2020. Adjusted NII, which is defined on slide 37, was $28.5 million or $1.37 per share in the second quarter of 2020 as compared to $11 million or $0.57 per share for the second quarter of 2019, so 140% increase on a per share basis. Focusing on second quarter 2020 highlights. We recognized $46.7 million in total investment income, a 230% increase over the second quarter of 2019. Interest income related to fees from the PPP was the primary driver for the increase.

We recognized $34.7 million of income related to the origination of PPP loans on $1.1 billion of PPP originations during the quarter. Servicing income increased by 10.9% to $2.8 million in the second quarter of 2020 versus $2.5 million in the same quarter last year, which was attributable to the average servicing portfolio growing from $1.1 million at June 30, 2019, to $1.3 billion at June 30, 2020. Distributions from portfolio companies for the quarter included $1.65 million from NMS, $75,000 from IPM, $250,000 from SIDCO and $293,000 from Newtek Conventional Lending, which is our joint venture. Total expenses increased by $1.7 million quarter-over-quarter or 11.3%, mainly driven by increases in professional fees, compensation-related costs and other loan administrative expenses. Realized gains recognized for the sale of the guaranteed portions of SBA loans sold during the second quarter totaled $1.7 million as compared to $13 million during the same quarter in 2019.

In the second quarter of 2020, NSBF sold 18 loans for $1.7 million at an average premium of 7% as compared to 170 loans sold during the second quarter of 2019 for $96 million at an average premium of 11.52%. The decrease was attributed to our shift to PPP originations during the second quarter of 2020. As I mentioned earlier, income related to the PPP is included in investment income, not in realized gains. Realized losses on SBA non-affiliate investments for the second quarter of 2020 were $2.9 million and $971,000 during the second quarter of 2019. Overall, our operating results for the second quarter resulted in a net increase in net assets of $25.5 million or $1.22 per share, and we ended the quarter with NAV per share of $15.66.

I would now like to turn the call back to Barry.

Barry SloanePresident, Chairman And Chief Executive Officer

Thank you, Chris. Operator, I’d like to open it up to questions.

Questions and Answers:

Operator

(Operator Instructions) And your first question comes from the line of Mickey Schleien with Ladenburg.

Mickey SchleienLadenburg — Analyst

Yes, good morning everyone. I hope everything is well on your end. Barry, there was a strong rally in 7a prices in the second quarter, although I didn’t see it in slide 14. How much of that do you think may have been due to a scarcity factor? And how do you see the supply demand equation unfolding as you and other lenders restart your 7a originations?

Barry SloanePresident, Chairman And Chief Executive Officer

Sure. Mickey, there is a scarcity factor. I think you’re going to have a scarcity factor as far as the eye can see. I think that the other thing that let me take those in pieces. I would say the most dominant issue for pricing is that new loans that are made are also made currently with six months of principal and interest, so that there’s very few prepayments in the first six months. So prepayments have dramatically slowed, and that’s bolstered the market. I think that from a supply and demand perspective, because of PPP, a lot of the assets that were drawing to making 7a loans are being pushed into this segment. I don’t really see that supply and demand changing. The other thing I would point out is, in the current interest rate environment, that’s very flat. These particular bonds offer very good yields to other structured products or other investments that financial institutions have to make.

So I think I see decent price stability for a while. Now these aren’t off-the-charts prices. Prices have been higher than this in the past. But I think that I think this is decent. By the way, there’s also, Mickey, factors in the fact that there are people who think that default rates will spike down the road, too. So you kind of have you do have two dynamics in here. But I think steady prices on a net basis for us between, I’m going to say one 10 and one 12, I think are on the horizon.

Mickey SchleienLadenburg — Analyst

I understand. Just one follow-up question. Commercial real estate makes up over half of your collateral. I’d like to understand what the typical loan to value is on those loans. And how concerned or what is your level of concern that the pandemic may permanently impair at least some of their value, such as restaurants, which is your third largest segment?

Barry SloanePresident, Chairman And Chief Executive Officer

Sure. So a couple of things. One, focusing on restaurants as the third largest segment, it’s still a small piece of the portfolio. And not all restaurants are created equal. I would say probably greater than 50% of our restaurants have got commercial real estate behind it. And that’s valuable because the restaurants that are thriving have their own lots, have pickup at the curb and drive-through. And that’s the trend going forward. As a matter of fact, if you look at a company like Dickey’s Barbecue, their revenues are up 17% because they don’t have most of the real estate for in-room dining. I think that our commercial real estate sector from a collateral perspective is totally different than an income-producing piece of real estate like an office building or a strip mall, multi-tenanted. Ours are very much tethered to the business. So the valuations haven’t soared with excess leverage going into securitizations, and they typically don’t decline as much either because they’re very much tied to the operating business.

So we’ve liquidated. And to be honest with you, I’ve been surprised, like Peter Downs, Chief Lending Officer, has mentioned to me over the last four months that we’ve had these contracts on businesses, commercial real estate and loans and ongoing, that stuff’s not closed. It closes. It’s closing. It’s like, wow, like they’re sticking to the valuations, they’re sticking to the bid because there is a very significant portion of the United States of America that’s got there’s $5 trillion or $6 trillion of liquidity sitting out there, looking to put money to work. So there’s money coming in the stuff, money coming out of the stuff. So we feel pretty good. We’ve been able to liquidate things at very good values in the last four months when you figured people would walk or reneg. No, not the case. As a matter of fact, with all this liquidity out there, and we could argue, who’s going to pay for it down the road, there’s a good bid for things. And even for some of these restaurants, new people are going to want to come in when things open up and take over the infrastructure and start up again because the demand is there.

There’s a ton of money and liquidity sitting for when the government opens things up, people adhere to doing things safely and the fear of going outside is reduced. So we’re we know we’re going to take a hit here like everybody else. But when I say that, we’ve already marked the portfolio down, which is a seasoned portfolio of 32.6 months to a 30% cumulative gross default from here with a 40% severity. I think we our balance sheet is a very, very well-adjusted balance sheet.

Mickey SchleienLadenburg — Analyst

That’s helpful color, Barry. And may it just generated another question in my mind. Is there a geographic component to your answer? In other words, I’m down here in South Florida. And frankly, there was a lot of boarded-up stores. And I don’t know if they’re ever going to be filled again. Now there’s a staples that’s been empty for years, not far from my location. So are you when you underwrite loans that are collateralized by commercial real estate, are there parts of the country that you’re avoiding or parts of the country that you prefer?

Barry SloanePresident, Chairman And Chief Executive Officer

Diversification, diversification, diversification. It’s funny. Mickey, I couldn’t predict the pandemic. Nobody was able to predict this. So we love diversification. And when you look at our geographies and you look at our industries, I’m pretty sure, and this does vary. Sometimes it’s a little bit over 10%, but mostly everything is under 10%. And we’ve been blessed, like look at my merchant portfolio, you think about merchant portfolio, you think about restaurants and retail, those things are crushed. But look at my merchant portfolio. So the value to our business model, getting referrals in from financial institutions, not brokers, not bankers, not diversification is the greatest. We’re not that smart to be able to predict that Governor Murphy is going to say, “You can’t go in a gym.” And then Cuomo’s going to say, “I can’t go in a restaurant.

Broadway is not opening.” Who would have ever predicted that New York City would be shut down from world travelers? So based upon that, we live and die based upon diversification. We have a diversified portfolio. We diversify our risk, and that enables us to stay in the game. And we’ve got loans in many states and many jurisdictions, and thank God, we’re pretty spread out. And also, importantly, we’re not dominated. Our portfolio is not an urban portfolio. That’s not to say that I don’t have some things in some of the urban areas. But most of these loans are not in and I’m obviously familiar with Miami and New York City, for sure. But no, they’re not we do not have concentrations there.

Mickey SchleienLadenburg — Analyst

I understand. That’s helpful. Barry, I appreciate your time this morning. Thank you.

Barry SloanePresident, Chairman And Chief Executive Officer

Thanks. Mickey

Operator

And your next question comes from the line of Fred Cannon with KBW.

Fred CannonKBW — Analyst

Barry, thanks for taking my question. first of all, I’m glad to hear things are going well during this difficult time. I wanted to talk if you could talk a little bit about the outlook for further PPP lending. We had tremendous takeup with the first round. Then when Congress extended, it slowed down. Curious what your thinking is in this next bill, what would be necessary to kind of kick start real volume growth back into the PPP program.

Barry SloanePresident, Chairman And Chief Executive Officer

Sure. So the good news, Fred, is I have as a CEO, I spend an inordinate amount of time reading every single article I can find on the Internet and watching all mediums on TV. So I read this, I look at the and I try to gather a consensus. It is apparent to me from Mitch McConnell, Pelosi, Mnuchin and the President, this program, although it has flaws, is deemed to be a success, and they realize that this is the quickest way to get the money in the hands of the SMB market, and they realize how vital it is. And yes, I heard Ron Johnson on TV this morning talk about there’s plenty of people that have got the money, and they haven’t spent it, which is apparently true. But it definitely liquefies a part of the economy, which, according to the Small Business Administration, is 50% of nonfarm GDP. So that Senator Cardin, Senator Rubio, who chair small business in the Senate, very much for the program, Chabot, Velazquez in the House, positive.

This is part of the Heroes Act. It’s part of the Senate Bill. Under the assumption, something is going to get done, which I have to say is more likely than that despite the posturing. I just I can’t fathom both parties not getting some things done despite the fact both seem to be dug in. With that said, I think you wind up with $190 billion program. It gives businesses a second bite of the apple, if their revenues are down 50%, which I think a large amount of them can do. I think if there were 4,000 to 5,000 lenders the first time around, they’re only going to be 60% of the lenders this time around. I think some lenders won’t participate again, which is probably good for us.

I can’t see this being as, I’d say this, attractive because the universe is smaller, fees have been cut, but it will still provide a very good return on equity for the work that we have to put in because of the 17-year investment that Newtek has invested in its infrastructure and technology and staffing. We do earn the money here. This is not a gift. There was 10 weeks where 180 people who work in seven days a week in 14, 16 hours a day. But I think that this is more likely than not, we’ve had to give fairly wide range of guidance here. And we do move 100% of the assets off the books.

Fred CannonKBW — Analyst

I guess just as part of that, what do you think this $190 billion needs to be part of the package, so the $190 billion actually gets lent?

Barry SloanePresident, Chairman And Chief Executive Officer

Yes. Great question. Here’s the key. Instead of a 50% reduction, make it 25%. That’s the best and by the way, the House Bill says 10, I think the Rubios got it at 50. So if they were able to get that down from 50, that money is going to get put into the market.

Fred CannonKBW — Analyst

Okay. That’s very helpful because that’s something to watch out for, Barry. The only kind of another big question. It looks like the fed is going to keep rates down for an indefinite period at least in the next couple of years and including the long end of the curve, which is floating around 50 basis points. If we have this structure of the yield curve for the next, I don’t know, through 2022, how do you feel that affects your business?

Barry SloanePresident, Chairman And Chief Executive Officer

Okay. So Fred, I am the contrarian. And I hate to say it, but I know what the fed governor is saying. I might be the only person in the world that actually thinks rates are primarily driven by market participants. I realize that the fed can push things around. But with the amount of borrowing that needs to be done, I first of all, I don’t think rates are going to skyrocket, but I think you’re going to get listen, we’ve seen fed chairman change rates quickly, changes mind quickly in a period of a quarter or 2. It’ll go from tightening to easing. So let me say this. You we’ve been around for 17 years. There are certain things that work better with rates rising.

With rates rising, I get higher interest income. I don’t have a lot of leverage. That’s a good thing because they don’t have the debt. Prospectively, if the economy gets heated, speeds pick up, I get less of a gain on sale. And maybe when servicing income goes down with a better economy, maybe I get less defaults, higher liquidation value. It doesn’t to be honest with you, and we’ve been through cycles up and down, we’re pretty well-matched. It doesn’t lean one way or another for us. I do believe that.

Fred CannonKBW — Analyst

Okay. So you feel like in some ways, you’re somewhat hedged in terms of what goes up and what goes down if we have rates in this event.

Barry SloanePresident, Chairman And Chief Executive Officer

No question about it. If you got inflation, my fee-oriented businesses do better, too.

Fred CannonKBW — Analyst

All right, well, helpful. Barry and best of luck going forward with the next round

Barry SloanePresident, Chairman And Chief Executive Officer

Thank you, Fred. We appreciate your interest in the correct.

Operator

Thank you. (Operator Instructions) Your next question comes from the line of Matt Tjaden with Raymond James.

Matt TjadenRaymond James — Analyst

Hey, Barry. Good morning and thanks for taking my questions. First question on the $180 million to $230 million adjusted NII range. I know you said that embedded some level of a PPP renewal. Does that also embed a renewal of the six-month P&I coverage by the SBA?

Barry SloanePresident, Chairman And Chief Executive Officer

Not really. And I say that, Matt, from a standpoint that if we didn’t get additional P&I coverage, the businesses would be on their own. And I don’t think it would affect 2020 numbers at all. It may affect 2021. I shouldn’t say it may. It probably will. But it wouldn’t affect 2020.

Matt TjadenRaymond James — Analyst

Great. I think then kind of as a follow-up to that. If that six-month P&I coverage isn’t extended, is there any color you can give on kind of how we would expect delinquencies to shake out? Would that be an immediate spike right after the extension runs out or kind of a gradual buildup?

Barry SloanePresident, Chairman And Chief Executive Officer

Yes. Matt, I want to change my answer to the first question. As I thought about it, once again, it all depends on the variability, vaccine, no vaccine. It’s really hard to guess. But it could affect it could slightly affect interest income. It could slightly affect servicing income. As you go from a 99% currency rate to a lower number, it’s just I don’t see it making an immediate adjustment, but I kind of want to try to be factual on that. Now what was the second question again?

Matt TjadenRaymond James — Analyst

Just specifically on the delinquency front, if that P&I coverage isn’t extended, kind of how would we expect that to shake out?

Barry SloanePresident, Chairman And Chief Executive Officer

I think you would see well, there’s two ways to think about it. And I tell this to people and I don’t think it absorbs, but that’s OK. A business that’s gotten six months of principal and interest, OK, the debt’s taken care of. It’s like a capital infusion. They’re getting their principal paid, they’re getting their interest paid for six months. We’ve spoken to our clients. They are managing this situation. The entrepreneurial ones, first of all, they’ve all partially guaranteed the loans in multiple ways. And many of them have downsized their business, they’ve reduced their expenses, so that a lot of them are getting rid of excessive things that they were using for growth, which is, frankly, the reason why most of these entities don’t make it is because they overextend themselves.

They positioned themselves for growth that isn’t there. I think that what you would see is a gradual reduction of the currency rate over the course of time. This would not affect our balance sheet. And over the course of multiple years, it prospectively would have some weight on our charge-offs. But frankly, we looked at this. We’ve modeled it and doesn’t we think we have it. I think the big issue is, we’ve taken it on the we think we’ve taken the right measure on the balance sheet. But relative to affecting income over time, we think that our business will be able to grow through it, even if there is no more PPP.

Matt TjadenRaymond James — Analyst

Okay. And then just last question for me on the $150 million in SBA 7a loans. Any color you can give on how you arrived at that number? And kind of what underlying economic and government stimulus assumptions are embedded within that?

Barry SloanePresident, Chairman And Chief Executive Officer

So first, I’ll make a joke. Pete Downs and I took out a coin and flipped it in the air. No, I hate to say that let me tell you, look, I’ve been doing this for 20 years of public company. Forecasting today in this environment, it’s almost impossible. I don’t know, is New York open/closed? Is New Jersey open/closed? Is California open or closed? It’s just it’s almost impossible to determine. So we looked at the pipeline. We looked at what we think is going to close this quarter. There’s plenty of demand. That’s not a problem. I’m very comfortable with the $150 million. I hope I don’t regret that I’ve said that because we got to pick and choose. By the way, we’re going to be sitting here in December or November ready to close loans, and all of a sudden, I got an appraisal in a business that’s different, or something popped up from the customer that they didn’t relay to us because of what’s happened in COVID.

You know what I’m saying? So really hard to tell. I think when we look at the $150 million, it’s half of what we did last year. Now we’ve also arguably started a little bit later. I think it’s the number we are comfortable with, and that’s why that’s how we came to it. A number that we were comfortable doing without having to stretch for credits or make loans in segments that we don’t particularly like, which I mean, we had a pipeline in March. We just decided we’re not going to close those. And some of those loans, we’re not closing. I mean loans that we were prepared to move forward with in March, some of them, they’re not happening. They’re in bad geographies. They’re in bad businesses. But more importantly, the business owners have not shown the entrepreneurial instincts to be able to manage the environment, and that’s what we look for.

Matt TjadenRaymond James — Analyst

That’s it for me. Barry, appreciate the time.

Barry SloanePresident, Chairman And Chief Executive Officer

Thank you, Matt. Appreciate your your interest.

Operator

Thank you. (Operator Instructions) And at this time, there are no further audio questions. Are there any closing remarks?

Barry SloanePresident, Chairman And Chief Executive Officer

None, whatsoever. I clearly wanted to thank everybody, particularly the analysts for the questions. They were great. We certainly appreciate the interest in the company and the stock. This is a tough time. We’re in a tough market. We are dealing with a business segment and sector that does and has received and acquired government help. I think that will happen. I think that we are positive on things going forward because we believe that the economy being properly bridged will come out of this with minimal amounts of damage and actually wind up moving forward because we’re transitioning into a more efficient economy.

And this has forced businesses to change the way they do things, to get rid of nonproductive processes, softwares, technologies and assets and be leaner for the going forward. Let’s just hope we can grow through this, pay off the debt and move on to happier times. Stay healthy, everyone. Thank you, operator. (Operator Closing Remarks)

Duration: 64 minutes

Call participants:

Barry SloanePresident, Chairman And Chief Executive Officer

Christopher TowersExecutive Vice President And Chief Accounting Officer

Mickey SchleienLadenburg — Analyst

Fred CannonKBW — Analyst

Matt TjadenRaymond James — Analyst

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Radius Health Business Update

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Radius Health Business Update
  • TYMLOS® new patient adds in April: modest growth vs. previous 4-month trailing averages

  • ~67% of new patients in April were initiated by a fracture focused bone health account

  • Meaningful FDA guidance on generic peptide requirements published on May 19, 2021

  • Anticipate abaloparatide depot formulation technical development work to commence 2H, 2021

  • RAD011 Type C meeting with the FDA on Prader Willi Syndrome (“PWS”) the week of June 14

BOSTON, June 02, 2021 (GLOBE NEWSWIRE) — Radius Health, Inc. (“Radius” or the “Company”) (NASDAQ: RDUS), provided a business update covering continued progress for the Company. Additional business updates will be provided as progress is achieved.

ABALOPARATIDE ASSET

U.S. TYMLOS Commercial Performance:

  • TYMLOS added ~1,650 new patients in April; 1% growth vs. trailing 4-month average

  • New patients: defined as those who have been prescribed TYMLOS and received their first dose

  • ~67% of new patients in April were initiated by a fracture focused bone health account

  • Added 45 new fracture / bone health focused prescribers during the month of April

Life Cycle:

  • ATOM (Male) Phase 3 pivotal study on schedule for readout: 2H, 2021

  • wearABLe (Transdermal System) Phase 3 pivotal study on schedule for readout: 2H, 2021

  • Anticipate abaloparatide depot formulation technical development work to commence 2H, 2021

Geographic Footprint:

  • Europe: re-submission expected for abaloparatide SC to EMA in 2H, 2021

  • Canada: abaloparatide SC submission – by our partner – expected in January, 2022

  • Japan: ‘planning discussions’ with PMDA, a precursor to potential abaloparatide-TD agreement with Teijin

  • Rest of world: multiple discussions ongoing with variety of counterparties

Intellectual Property Portfolio Advancement:

  • Three U.S. patents are presently listed in the Orange Book for TYMLOS: U.S. Patent No. 7,803,770 which expires on April 28, 2031 and U.S. Patent Nos. 8,148,333 and 8,748,382 which each expire on October 30, 2027

  • A fourth U.S. patent, U.S. Patent No. 10,996,208 directed to certain methods of analyzing abaloparatide to detect and quantify presence of beta Asp10, was issued on May 4, 2021 and will be added to the Orange book listing shortly; this patent expires on April 30, 2038

  • A new Japanese patent covering the abaloparatide transdermal system and its use in treating osteoporosis was granted in April, 2021 and will expire October 8, 2036

FDA Guidance on Synthetic Peptides:

On May 19, 2021 the FDA published updated guidance and requirements for synthetic peptides and what would be required in any generic filings and advancement. Radius views this new guidance as meaningful in assessing the probability of a generic synthetic peptide being filed and gaining market entry.

In sum, the Company views these newly communicated FDA requirements as making it significantly more challenging to advance and develop a generic version of abaloparatide.

The key components of the new FDA guidelines include:

  • Recombinantly sourced peptides cannot be approved in an ANDA and must be submitted in a 505(b)(2) NDA

  • Explicit references to the potential for significant consequences if anti-drug antibodies cross-react against endogenous peptides

  • New impurities must be within the FDA’s threshold; if greater, must be submitted as a 505(b)(2)

  • Explicit expectation: ANDA with new impurity must evaluate immunogenicity risks prior to filing

RAD011 ASSET

  • FDA Type C meeting for PWS will take place the week of June 14

  • Written minutes from the FDA meeting expected by the end of July

  • Post FDA discussion, expectation is to initiate a pivotal PWS trial before year end

  • Additional orphan indications being assessed in parallel – decisions and clarity in 2H, 2021

  • Multiple Advisory Board meetings completed: U.S., UK, EU for PWS plus a Psychiatry meeting

  • Internal team formed: clinical, pharm. science, regulatory, bio-stats, CMC, global franchise

  • External team established: manufacturing & supply chain, development, regulatory, advocacy

About Radius
Radius is a commercialized biopharmaceutical company committed to serving patients with unmet medical needs in endocrinology and other therapeutic areas. Radius’ lead product, TYMLOS® (abaloparatide) injection, was approved by the U.S. Food and Drug Administration for the treatment of postmenopausal women with osteoporosis at high risk for fracture. The Radius clinical pipeline includes investigational abaloparatide injection for potential use in the treatment of men with osteoporosis; an investigational abaloparatide transdermal system for potential use in the treatment of postmenopausal women with osteoporosis; the investigational drug, elacestrant (RAD1901), for potential use in the treatment of hormone-receptor positive breast cancer out-licensed to Menarini Group; and the investigational drug RAD011, a synthetic cannabidiol oral solution with potential utilization in multiple endocrine and metabolic orphan diseases, initially targeting Prader-Willi syndrome.

About TYMLOS (abaloparatide) injection
TYMLOS (abaloparatide) injection was approved by the U.S. Food and Drug Administration for the treatment of postmenopausal women with osteoporosis at high risk for fracture defined as history of osteoporotic fracture, multiple risk factors for fracture, or patients who have failed or are intolerant to other available osteoporosis therapy.

About ATOM Phase 3 Study
The ATOM Phase 3 study is a randomized, double-blind, placebo-controlled study to assess efficacy and safety of abaloparatide injection in 228 men with osteoporosis. The primary endpoint is change in lumbar spine BMD at 12 months compared with placebo, and if successful, will form the basis of a supplemental NDA seeking to expand the use of TYMLOS to treat men with osteoporosis at high risk for fracture.

About the Abaloparatide Transdermal System and wearABLe Phase 3 Study
The abaloparatide transdermal system was developed in a collaboration between Radius and Kindeva Drug Delivery (“Kindeva”) (formerly 3M Drug Delivery Systems) with the application of Kindeva’s innovative microstructured transdermal system technology. The Phase 3 wearABLe study is the first pivotal study to evaluate treatment using a novel non-injectable delivery of an anabolic therapy. The wearABLe study is a pivotal, randomized, open label, active-controlled, bone mineral density (“BMD”) non-inferiority bridging study that will evaluate the efficacy and safety of abaloparatide transdermal system versus TYMLOS (abaloparatide) injection in approximately 500 patients with postmenopausal osteoporosis at high risk for fracture. The primary endpoint of the study is the percentage change in lumbar spine BMD at 12 months.

About Elacestrant (RAD1901) and EMERALD Phase 3 Study
Elacestrant is a selective estrogen receptor degrader (SERD), out-licensed to Menarini Group, which is being evaluated for potential use as a once daily oral treatment in patients with ER+/ HER2- advanced breast cancer. Studies completed to date indicate that the compound has the potential for use as a single agent or in combination with other therapies for the treatment of breast cancer. The EMERALD Phase 3 trial is a randomized, open label, active-controlled study evaluating elacestrant as second- or third-line monotherapy in ER+/HER2- advanced/metastatic breast cancer patients. The study has enrolled 466 patients who have received prior treatment with one or two lines of endocrine therapy, including a cyclin-dependent kinase (CDK) 4/6 inhibitor. Patients in the study were randomized to receive either elacestrant or the investigator’s choice of an approved hormonal agent. The primary endpoint of the study is progression-free survival (PFS) in the overall patient population and in patients with estrogen receptor 1 gene (ESR1) mutations. Secondary endpoints include evaluation of overall survival (OS), objective response rate (ORR), and duration of response (DOR).

About RAD011
Investigational drug RAD011 is a pharmaceutical-grade synthetic cannabidiol oral solution, manufactured utilizing traditional pharmaceutical manufacturing processes. The product has purity specifications that meet standardized regulatory and quality control requirements and, compared to the process of developing a plant-derived product, the synthetic manufacturing process usually enables increased consistency and greater precision in the product supply. RAD011 has been assessed in over 150 patients across multiple indications and has potential utilization in multiple endocrine and metabolic orphan diseases. Radius is initially targeting Prader-Willi syndrome (PWS) and anticipates initiating a pivotal Phase 2/3 study for patients with PWS in the second half of 2021 pending regulatory discussion with the U.S. Food and Drug Administration (FDA).

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our expectations regarding continued commercialization of TYMLOS in the U.S.; our expectations regarding our clinical trials, studies and other regulatory initiatives, including our wearABLe and ATOM Phase 3 clinical trials; and the progress in the development of our product candidates, including RAD011.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the adverse impact the ongoing COVID-19 pandemic is having and is expected to continue to have on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials, preclinical studies, and employees; quarterly fluctuation in our financial results; our dependence on the success of TYMLOS, and our inability to ensure that TYMLOS will obtain regulatory approval outside the U.S. or be successfully commercialized in any market in which it is approved, including as a result of risk related to coverage, pricing and reimbursement; risks related to competitive products; risks related to our ability to successfully enter into collaboration, partnership, license or similar agreements; risks related to clinical trials, including our reliance on third parties to conduct key portions of our clinical trials and uncertainty that the results of those trials will support our product candidate claims; the risk that adverse side effects will be identified during the development of our product candidates or during commercialization, if approved; risks related to manufacturing, supply and distribution; and the risk of litigation or other challenges regarding our intellectual property rights. These and other important risks and uncertainties discussed in our filings with the Securities and Exchange Commission, or SEC, including under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2020 and subsequent filings with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Investor & Media Relations Contact:
Ethan Holdaway
Email: investor-relations@radiuspharm.com
Phone: (617) 583-2017

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Central Maine business briefs: UMA vice president receives award

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Central Maine business briefs: Kennebec Savings Bank, Kennebec Federal Savings merger approved

 

Jonathan Henry, University of Maine at Augusta vice president of enrollment management and marketing, received the Martin Gallant Distinguished Counseling Professional Award from the Maine Counseling Association recognizing his distinguished career in the field. Jeremy Bouford, UMA coordinator of recruitment and outgoing president of the counseling association, presented him the award at the organization’s annual meeting this May.

“It was my distinct pleasure to present this award to Jon Henry not only on behalf of the Maine Counseling Association but also as a trusted and valued colleague,” said Bouford, according to a news release from UMA.

Jonathan Henry Photo courtesy of UMA

“I am honored to receive this award from the Maine Counseling Association,” said Henry. “Over 36 years in the admissions counseling and enrollment profession, I recognize now more than ever the role that having a counseling background has played in helping me succeed in my work with students, and helping to administer a university.”

Henry has worked in college admissions counseling and enrollment management for 36 years, the last 22 in Maine.

“Marty” Gallant was a long-serving school counselor in Caribou, who was actively involved with and dedicated to the Maine Counseling Association and the profession of school counseling. Maine Counseling Association established this award to honor him upon his retirement in 2016.

Association members work in a variety of settings across the profession including K-12 schools, colleges and universities, community-based agencies, clinical facilities and private practice.

Benton company names director of programs

BENTON — Assistance Plus,  a 29-year-old home health care, behavioral health and intellectual disability agency headquartered in Benton, has promoted Natalie Childs to director of programs.

Natalie Childs Contributed photo

Childs has been employed by Assistance Plus since June 2010, starting as a daily living support specialist, and most recently serving as the organization’s BH/DD program manager. According to Crystal Bailey, the agency’s human resources director, the promotion is a result of her hard work and dedication. Natalie will remain in her current office location at the company’s headquarters in Benton.

Childs graduated from Erskine Academy and holds a bachelor’s degree in criminal justice from Thomas College. She  is completing a master’s degree in health care administration from Fitchburg State University.

Assistance Plus has offices in Benton, Waterville and Wilton.

2021 Mainebiz Woman to Watch nominees sought

PORTLAND — Mainebiz seeks nominations for female business owners, CEOs, presidents and top executives with established track records of success and who have been trailblazers and mentors to be its 2021 Women to Watch.

Criteria:
• The nominee must be the president, CEO or executive director at her company or organization.
• The nominee should have an established track record of business success.
• The nominee and her company must have made outstanding contributions to their company, industry and community.

Nominate a 2021 Mainebiz Woman to Watch by June 28. Visit mainebiz.biz/nominations and complete the short form.

The Women to Watch awards program is sponsored by Drummond Woodsum, Northeast Delta Dental, TD Bank and Vistage. Chosen nominees will be featured in the Aug. 9 issue of Mainebiz and will be honored at the annual Women to Watch reception in person during the middle of September. The date and location will be announced soon.

Kennebec Savings Bank announces new hires

Paige O’Donnell Contributed photo

AUGUSTA – Kennebec Savings Bank President and CEO Andrew Silsby recently announced two new hires, each of whom come with strong backgrounds in banking and customer service.

Paige O’Donnell, who has joined Kennebec Savings Bank as vice president of retail banking, brings more than eight years of banking experience. Her most recent position was on TD Bank’s Small Business Banking Team as their team manager.

Amanda Dyer Contributed photo

“Paige brings new insight and energy to our retail team,” said Silsby, according to a news release from the bank. “We are fortunate to have her join Kennebec Savings Bank at such an exciting time in our history. The bank is growing, and Paige will help us continue to offer competitive and quality products to our customers.”

Amanda Dyer joins the bank with 12 years of experience. Prior to joining the bank, Dyer served as branch manager and loan officer for Norway Savings Bank at their Topsham location. Dyer is originally from the Freeport area and graduated from Freeport High School.

“Amanda will be a great asset to our Freeport Team,” said Silsby. “She is familiar with the Freeport area, and will bring valuable knowledge and expertise to our team. We look forward to her leadership.”

Kennebec Behavioral Health leaders recognized

Rob Rogers Contributed photo

AUGUSTA — At the 2021 Maine Prevention Professionals Conference held on May 19, KBH’s Robert Rogers was recognized with the 2021 Neill E. Miner Memorial Prevention Award. This award recognizes an individual who has made a significant contribution in the field of prevention. He has been at the forefront of so many initiatives and approaches to evidence-based prevention in Maine. He has been able to forge a unique bridge between the prevention and treatment disciplines. “Rob is an extraordinary prevention professional who has made significant contributions to the field and positively impacted the lives of countless youth and adults throughout central Maine,” said Tom McAdam, KBH chief executive officer, according to a news release from KBH. A surprise guest, McKenna Rogers, Rob’s daughter who also works in behavioral health, presented him with the award.

Dr. Alane O’Connor Contributed photo

At the Co-Occurring Collaborative Serving Maine Annual Summit held on May 6, the Visionary Leadership award was presented to Dr. Alane O’Connor. O’Connor is the first director of perinatal addiction treatment at Maine Medical Center, serving pregnant women in the Portland area. O’Connor also provides addiction medicine through Kennebec Behavioral Health’s Opioid Health Home in Skowhegan and is chairperson of Maine’s Opioid Response Clinical Advisory Committee. The collaborative’s Visionary Leadership Award recognizes an individual, organization or an initiative in the behavioral health care field that has demonstrated outstanding leadership in improving the lives of individuals with mental illnesses and substance use disorders and/or their communities. “For her dedication to advance the quality of substance use treatment and raising awareness to the needs of pregnant and parenting women living with this disease,” said Liam Shaw, CCSME Board Member, in the release.

Kennebec Behavioral Health was founded in 1960 and operates clinics in Waterville, Skowhegan, Winthrop, Augusta and Farmington.

Northern Light Health announces finance leadership changes

Chris Frauenhofer, vice president of finance of Northern Light Inland Hospital and interim administrator of Northern Light Continuing Care, Lakewood in Waterville, has been named as the new vice president of finance for Northern Light Health’s system Medical Group.

Chris Frauenhofer

Frauenhofer joined Northern Light Health in 2013, starting at Maine Coast Memorial Hospital before moving to Inland Hospital in 2017. Before joining Northern Light Health, he served in senior finance roles for more than 20 years at hospitals in New York, including Alice Hyde Medical Center and Niagara Falls Memorial Medical Center.

Frauenhofer received a master’s in business administration degree from Niagara University (New York) and a Bachelor of Science degree in business administration/registered accounting (program from State University of New York at Buffalo).

Frauenhofer lives in Mariaville. He will remain in the interim role at Lakewood until a new administrator is recruited.

Randy Clark Contributed photo

Randy Clark, vice president of finance and operations at Northern Light Sebasticook Valley Hospital in Pittsfield, will expand his duties to include Inland Hospital and Lakewood, becoming vice president of finance for both hospitals and the continuing care facility.

A resident of Vassalboro, Clark just celebrated 25 years with Northern Light Health. He started as a controller at Sebasticook Valley Hospital in 1996 and became vice president of finance in 2005. In 2016, operations was added to his leadership role. For a few years, he oversaw finance as vice president for both CA Dean Hospital in Greenville and Sebasticook Valley Hospital.

Clark earned his Bachelor of Science degree in business administration from the University of Maine (Orono) and his Master of Business Administration degree from Thomas College (Waterville).

“Chris and Randy have been vital to our local leadership teams, and integral to system finance work. We know they will continue to help our system and member organizations succeed in their new and expanded roles — not only when it comes to finance, but with all aspects of our mission to improve the health of the people and communities we serve. Both Chris and Randy have a passion for excellent service and finding new ways to deliver on our brand promise,” said Terri Vieira, president of Inland Hospital, Continuing Care, Lakewood, and Sebasticook Valley Hospital, according to a news release from Northern Light Health.

Maine Dental Association partners with Maine Needs

The Maine Dental Association recently partnered with nonprofit organization Maine Needs to assemble and distribute 200 cleaning and hygiene kits to four sites.

The association, though its donation campaign called Maine Needs a Smile, collected personal hygiene items such as toothbrushes, toothpaste, soap, deodorant and shampoo, and basic cleaning supplies, such as laundry detergent, all-purpose cleaner and trash bags, to help Maine families in need.

The initiative was started by three MDA member dentists, Dr. Meg Dombroski, Dr. Kathryn Horutz and Dr. Nicole Kimmes, along with MDA Executive Director Angela Westhoff. The group was familiar with the Maine Needs nonprofit organization, which strives to help individuals and families in Maine meet basic, material needs by providing donated clothing and essential products and household items, and which partners with schools, caseworkers, nurses and nonprofits throughout the state to provide those material resources.

“One of the most rewarding aspects of dentistry is the opportunity to make a difference in people’s lives every day. The Maine Needs A Smile community effort made it possible for dental professionals across Maine to join together to have a positive impact beyond our chairs,” said Kimmes, according to a news release from the association

One of the ways Maine Needs provides for individuals and families is through different “kits” that the public can put together and donate.

The Maine Needs a Smile initiative originally had a goal of assembling 100 cleaning and hygiene kits. Because of the support of MDA member dentists, dental staff, and the general public, 200 kits were put together and were distributed between four sites. Kits were distributed at the Community Concepts Early Learning Center in Farmington, River Valley Free Store in Mexico, Kaydenz Kitchen Food Pantry in Lewiston, and Penney Memorial United Baptist Church in Augusta.

Gardiner FCU gives to local food pantries, organizations

Gardiner Federal Credit Union recently hosted a small reception to distribute the funds raised in 2020. The guests were representatives of area food pantries and organizations that help local people with food insecurities. There are eight organizations, each receiving a check in the amount of $2,482.38.

When the pandemic hit the number of people in need of these services grew. There were many new faces. Initially, some pantries were overwhelmed. Thankfully, those able to give dug deep and helped them make certain no one was turned away empty-handed. Individuals, grocers and businesses helped keep them afloat.

The Tanzanian proverb, “Little by little, a little becomes a lot.” In most cases, GFCU raises its Ending Hunger funds, one dollar at a time. So, to the staff and the members, they may think that dollar won’t make a difference, but it does. In this case it added up to almost 20,000 of those dollars. Their efforts and the generosity of many, do make a difference and the funds add up to a lot.

Throughout the months of June and July, GFCU will sell Cash Calendars for Ending Hunger. The calendars are $10 each. A total of $2,400 in prizes, will be drawn each weekday in August. Winners will receive either $100 or $200, depending on which day(s) they win. Anyone with $10 can purchase a calendar. It is not necessary to be a member to support any of its fundraisers.

For more business news, visit CentralMaine.com.

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Here are 100+ AAPI-owned businesses to shop in 2021

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Here are 100+ AAPI-owned businesses to shop in 2021

As it did for companies across the globe, pandemic-related freight issues increasingly complicated the supply chain for Sahra Nguyen, founder and CEO of Nguyen Coffee Supply — and made it much more expensive to manage. And the spike in anti-Asian American and Pacific Islander violence increasingly strained an already difficult year:

“The biggest challenge is staying mentally, emotionally and physically safe so that I can continue to show up for my business, family and community,” said Nguyen.

AAPI-owned businesses have suffered tremendously since the onset Covid, according to a survey from the Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (ACE). Of the approximately 900 AAPI small business owners surveyed…

  • More than 80 percent reported negative effects
  • 10 percent have closed their business
  • And 45 percent have lost or let go of employees

In general, there’s been a 169-percent increase in hate crimes in major cities — nonprofit advocacy group Stop AAPI Hate received more than 6,600 reports of anti-AAPI violence since it launched in March 2020 — unemployment rates rose disproportionately and solutions have made headway, such as the Covid-19 Hate Crimes Act. All of it has added to an increased national focus on the challenges and realities that AAPI communities face.

Within the past year, the visibility of anti-AAPI violence in the U.S. — which goes back centuries — caused a large mobilization of people, organizations and retailers to up their support of the AAPI community through advocacy, donations and awareness in light of AAPI Heritage Month. Multiple online retailers and brands have been increasing efforts to highlight AAPI-owned businesses.

  • Amazon and Etsy launched storefronts highlighting AAPI small businesses.
  • Reviews site Yelp announced a new feature last month by which businesses can self-identify as “Asian-owned,” making it easier for shoppers to find them.
  • Shop by Shopify, a free app to navigate small businesses, unveiled a directory of Asian-owned businesses in March.
  • Food delivery giant Grubhub began its Donate the Change program this month, giving all proceeds to National ACE and AAPI-owned restaurants across the nation.

Jan Lo, CEO of travel brand Lo & Sons, said reports of attacks on members of the AAPI community this year — specifically involving anyone around his mom’s age — brought his family’s heritage a lot more personal. “We’re extremely proud of our AAPI heritage, but we have also tried to build an ethos around inclusivity,” he said. The challenges “can also be viewed as opportunities, as I think many people can connect to our story of our mom inspiring her sons to help her achieve her professional dreams — not just because we’re Asian.”

AAPI Heritage Month “gives us an opportunity to lift each other up, to celebrate and express pride in different parts of our community,” explained Ian Shin, assistant professor of history and American culture at the University of Michigan, adding that it also offers an “opportunity to revisit history and remind people that, in fact, anti-AAPI violence is not un-American — it’s woven into the fabric of American society from the mid 19th century onward.”

AAPI-owned businesses in 2021

AAPI-owned businesses nationwide were the most negatively impacted throughout the pandemic, demographically speaking, according to CNBC: The number of working AAPI business owners fell by 20 percent last year. Among the most affected areas was San Francisco’s Chinatown, which saw 75 percent of its storefronts become nonoperational at some point last year.

But what is an AAPI-owned business in the first place? The U.S. Small Business Administration (SBA) told us that it doesn’t specifically define what constitutes an AAPI-owned business. The U.S. Census Bureau does, however: having persons of Asian or Native Hawaiian and Pacific Islander origin owning 51 percent or more of the business — akin to its definitions of Black-owned businesses and women-owned businesses. This definition covers East Asia (like China, Japan and more), Southeast Asia (including the Philippines, Vietnam and more) and the Indian subcontinent (Pakistan, Bangladesh and more) — the three comprise more than 19 countries and 20 million citizens in the U.S. can trace their origins to here — as well as the Polynesia, Micronesia and Melanesia subregions, which include Native Hawaiian, Samoan, Fijian and Tahitian people, among others.

Despite these definitions, or lack thereof, the two agencies do provide some noteworthy insights. Based on the most recent data released by the Census Bureau, here’s what we know:

  • In 2012, there were roughly 2 million AAPI-owned businesses in the U.S. (2016 data)
  • In 2018, there were more than 577,000 Asian-owned and over 6,600 Pacific Islander-owned employer businesses in the U.S. (2021 data)

Sarah Paiji Yoo, co-founder and CEO of eco-friendly cleaning brand Blueland, said she’s “incredibly proud” to be an Asian American running a business but is often subject to racism, especially on social media — people comment assumptions regarding where Blueland manufactures its products, for example. Then there’s the “model minority myth,” a harmful argument that typically praises Asian Americans for economic, academic and cultural success based entirely on stereotypes. It’s yet another challenge for Lin Chen, founder and CEO of wellness brand Pink Moon. “People continue to generalize, stereotype and be selective in who they want to listen to, invest in [and] purchase from,” she told us.

In our guide to women-owned brands, owner and founder of Hero Cosmetics Ju Rhyu told us that running a business is accompanied by “a lot of responsibility” to support her community, “especially as a business owner, since there is privilege and influence in being in this position.” That privilege comes at a time when 44 percent of unemployed Asian American women have been out of work for at least six months. This year, over 1,000 AAPI executives like DoorDash founder Tony Xu and Zoom CEO Eric Yuan donated $10 million to groups supporting the AAPI community, including nonprofit Asian Pacific Fund and the Asian-Americans Advancing Justice, a legal advocacy group for hate crime victims. Other business leaders pledged $125 million to launch the Asian American Foundation, which will support AAPI organizations and causes over the next five years — the largest philanthropic commitment in history fully focused on the AAPI community. The foundation raised another $125 million from organizations like Walmart, Bank of America and the Ford Foundation.

While noteworthy efforts, the AAPI community receives less than 1 percent of philanthropic funds despite making up 7 percent of the population and the country’s fastest growing racial group, according to the Pew Research Center.

Being a South Asian founder, Silk + Sonder’s Meha Agrawal said “it often feels like all the odds are stacked up against us: We have to work harder [and] prove ourselves every step of the way.” But throughout her career, she’s learned that “the most important thing a female founder or woman of color can do is make sure that people in seats of privilege are brought along on our journey” to have transparent conversations while building a business.

Each Fall and Spring, AAPI nonprofit Gold House hosts the Gold Rush cohort of Founders — Sahra Nguyen participated last year — wherein founders attend weekly master classes and panels led by advisors, expose their brands to potential investors and influencers, and join a network of founders that meet regularly to share insights and build partnerships. ACE National also provides guidance for starting and maintaining a business, including how to navigate the Covid-19 pandemic, loans, government programs and health and wellness matters.

Business owners said messaging and connecting with other founders on social media, from Twitter to LinkedIn, helped them network. Founders “will be extremely helpful and crucial as you build [your business] and oftentimes they’ll be the only ones who can empathize and understand what you are going through in successes and failures,” noted Rhyu.

Pink Moon’s Lin Chen said she’s part of multiple networking groups on Facebook for Asian creatives and entrepreneurs, including Asian Hustle Network and Asian Creative Network.

Notable AAPI-owned products in 2021

Here are 14 items from AAPI-owned brands that stood out to us, from travel essentials and skincare products to eco-friendly tools and home goods. Since there is no central directory of AAPI-owned businesses, as defined by the Census Bureau’s 51-percent edict, we asked each business below to confirm that it meets the criteria: having persons of Asian or Native Hawaiian and Pacific Islander origin owning 51 percent or more of the business.

Pink Moon allows users to filter wellness and skincare products they see by skin type, age and goals.

One of their bestsellers includes this rose quartz gua sha that stimulates lymphatic drainage to reduce puffiness and increase elasticity in the skin, according to the brand. In including this product in their line, Chen initially wanted to celebrate Traditional Chinese Medicine and her heritage, “I want to contribute to the diverse voices in this industry and push for more inclusivity and positive change,” she said. For maximum results, the brand suggests users of the gua sha pair it with the Over the Moon Gua Sha Facial Oil, which is made from a sunflower-moringa oil blend that soothes skin inflammation.

Amy Liu originally started the company to deal with her own eczema and now Tower 28 is the “first and only makeup brand to 100-percent follow the National Eczema Association’s ingredient guidelines and avoid every known skin irritant and allergen for all skin sensitivities,” she shared. This AAPI month, Liu wants consumers to realize AAPI heritage “is about recognizing the incredible people in our community who are pushing the boundaries and speaking up about racism and the need for more Asian representation.”

Made with apricot and raspberry seed oil, this lip gloss is one of the most popular products. Designed to hydrate your lips without drying them out, according to the brand, the gloss comes in four shades: Coconut, Cashew, Oat and Almond.

Frustrated with the fit of his dress shirts, Taiwanese-American Wesley Kang founded Nimble Made “to bring more representation and inclusion in sizing standards, starting with a slim fit that actually fits,” he elaborated.

Made from 100-percent cotton, the brand’s machine-washable dress shirts feature 2-button adjustable rounded cuffs and a Franklin semi-spread collar.

Terrence Santos founded his company in 2015 when he was expecting his first child. Originally, he started looking for toys that would teach the Filipino language to his child, but found nothing — so he created a toy company that provided options. Now his company sells toys that teach Tagalog, Ilocano, Bisaya and Hawaiian. On each of the ten blocks, the company has engraved the Roman number, Tagalog translation, Mahjong character and an English translation.

Eunice Byun and Dave Nguyen are challenging the notion that we need dozens of gadgets to cook delicious meals. A few years ago, the ex Chanel and Revlon executives founded Material Kitchen, a direct-to-consumer company that offers a simplified kitchen starter set at an affordable price. This seven-piece set, which has a 5.0-star average rating from almost 100 consumers, features an 8” knife, 4” knife, tongs, wooden spoon, metal spoon, slotted spatula and wooden holder. What’s more is you can customize the set’s wood type and handle color.

Private Policy is a “genderless” clothing company founded by Haoran Li and Siying Qu, two former Parsons graduates. Inspired by the youth culture in New York City, the pair design clothes without the traditional menswear and womenswear labels. Made from 100-percent Rayon, this jacket can be worn with the sleeves on or off, serving multiple purposes. You can also shop their collection at Selfridges.

Nearly two decades ago, Taiwanese American Melinda Hwang’s father worked with a scientist (and family friend) to come up with a nanofiber membrane mask during the 2003 SARs epidemic. When the Covid-19 pandemic hit the U.S., Hwang’s family sent her those masks from Taiwan and, thus, Happy Masks was born.

The brand’s Pro Series offers a range of sizes — with the small size fitting ages three to 10 — and can withstand at least 50 washes by hand. It has adjustable ear straps and a nose wire to fit different face shapes, while its “parrot beak” design leaves enough room between the mask and the mouth and nose in order to breathe comfortably for long-term wear.

Nguyen Coffee Supply imports Vietnamese coffee beans from its partner farms in Vietnam and roasts them fresh weekly in Brooklyn. The Original Vietnamese Coffee Trio features three different coffee blends: Moxy, Truegrit and Loyalty Arabica-Robusta. The coffee comes finely ground, and you can brew it using the brand’s Phin Filter.

CEO and founder Sahra Nguyen said AAPI month is an important time for the community to share their stories. “Many people don’t understand our community because we’ve been erased and ignored for so long,” Nguyen said. “Taking the time to learn about our community’s unique experiences will deepen our connection and sense of shared humanity. From here, we can effectively work together to build a better world.”

CEO Jan Lo said the brand was inspired by his mom’s need for a lightweight, stylish and functional carry-on bag to take with her while traveling. While designing the brand’s first bag — The O.G. — Lo said he “quickly found that it wasn’t just my mother in need of a travel bag that didn’t sacrifice style for functionality.” Lo & Sons, which was co-founded by Lo, his mother and his brother, sells a variety of bags for men and women, including The Catalina Deluxe, which is featured in our roundup of the best weekender bags. The company sells apparel and face masks, too.

Edward and Judy Kwon founded the family-owned CALPAK in 1989 with the mission of making quality bags at an accessible price. Their daughter Jennifer Kwon has run the company since 2013. CALPAK’s bags range in size, style and color from the Kaya Laptop Backpack to the Hue Duffel Bag, which was also featured in our roundup of the best weekender bags. Beyond bags, luggage and organizers, CALPACK also sells men’s and women’s apparel, as well as wellness items like face masks, hand sanitizer and linen and room spray.

After five years of running gr8nola as a side hustle, founder Erica Liu Williams left her 10 year tech career to pursue the brand full time. gr8nola sells granola that’s free from refined sugar, dairy, soy and GMOs in a variety of flavors, from Peanut Butter and Matcha to Cacao and Cinnamon Chai. Williams said she feels it’s her responsibility to use her platform to share her perspective and the voices of others in the AAPI community. “I feel socially responsible to myself, family and broader community to be a role model for others by leading by example and showing other young girls and people who look like me that you can achieve success on your own terms, without succumbing to becoming a “model minority” stereotype,” Williams said.

Silk + Sonder is a subscription service that sends members guided monthly journals with prompts inspired by positive psychology, as well as gives them access to virtual programming for peer-to-peer support. “Silk + Sonder’s mission is to solve the emotional health epidemic for customers versus being a band-aid fix,” said Meha Agrawal, the company’s founder. “At its core, Silk + Sonder is a space for mindfulness, journaling, planning, tracking and creative expression all in one.”

When Sarah Paiji Yoo, Blueland’s CEO, decided to reduce her personal plastic consumption, she quickly realized how difficult it was to do. “Many household items use single-use plastic in their packaging,” said Yoo. “This ultimately is what led me to found Blueland, as no one should have to sacrifice a clean home and clean clothes for a clean planet.” Blueland sells refillable cleaning products like Glass + Mirror, Multi-Surface and Bathroom sprays — included in The Clean Up Kit — all of which are certified by the EPA’s Safer Choice program, as we previously reported in our guide to eco-friendly cleaning supplies.

Stephanie Hon launched Cadence with the mission to eliminate single-use travel-sized plastic in February of last year — a month before the Covid-19 pandemic hit the U.S. “We definitely put a pause on talking about air-travel, going to the gym before work, date nights, etcetera,” said Hon. But despite launching in the midst of the pandemic, the brand’s sustainable capsules repeatedly sold out. Cadence specializes in magnetic and refillable containers made from recycled ocean bound plastic that snap together and can keep your small travel essentials and daily items organized. You can buy the capsules individually or get them a bundle of six, and they come in a variety of colors including Lavender and Terracotta. Hon said one of her biggest challenges as an AAPI business owner was being “bullish” and retraining her inclinations. “To say I think we’re going to be a $XM company, to say it’s a great opportunity for people to be involved. There’s a perfect balance of humility and confidence that comes to light,” she said.

109 AAPI-owned brands to support in 2021

In addition to our favorite products from AAPI-owned brands, we’ve rounded up some businesses across various Shopping reader interests, including home, food, beauty and wellness. We asked each business below to confirm it meets the Census Bureau’s criteria of at least 51 percent AAPI ownership. While this list of AAPI-owned companies and products isn’t exhaustive, we aim to actively update this feature to help keep you informed about AAPI-owned companies worth considering.

AAPI-owned home and kitchen brands

Revamp your kitchen decor with a new apron or oven mitts from The Homebodies or treat yourself or your favorite friend to a new indoor plant from Bark & Vine.

  1. Aerangis
  2. Anak Toy Kompany
  3. Bark & Vine
  4. Blueland
  5. The Homebodies
  6. ILHA Candles
  7. KonMari
  8. Material Kitchen
  9. O-M Ceramics
  10. Pawena Studio
  11. Rooted
  12. Soothi
  13. Trail575
  14. Woo Ceramics

AAPI-owned beauty and skincare brands

Update your skincare regime by shopping for a Gua Sha facial tool from Mount Lai or combat maskne with Soko Glam’s Pimple Patch. You can also shop from dozens of AAPI-owned makeup brands, fragrance shops like Ellis Brooklyn or nail care brands like Sundays.

  1. Acaderma
  2. Asutra
  3. AVYA Skincare
  4. Bluelene
  5. Blume
  6. Cle Cosmetics
  7. Caire Beauty
  8. Circumference
  9. Ellis Brooklyn
  10. EM Cosmetics
  11. Essance Skincare
  12. Glow Recipe
  13. Happy 2nd Birthday
  14. Hero Cosmetics
  15. Krave Beauty
  16. LAPCOS
  17. Mount Lai
  18. Peach & Lily
  19. Pink Moon
  20. Soko Glam
  21. Sundays
  22. Supernal
  23. Tower 28 Beauty
  24. YINA

AAPI-owned food and beverages brands

These 17 standout food and beverage options are worth a try, especially if you’re looking to try out some spiced ice cream or a side of kimchi.

  1. Brightland
  2. ChocoVivo
  3. Fly By Jing
  4. Gr8nola
  5. Indifix
  6. Kasama
  7. Lunar
  8. Malai Ice Cream
  9. Mother-in-Law’s
  10. Nguyen Coffee Supply
  11. Omsom
  12. One Stripe Chai
  13. The Qi
  14. Red Boat Fish Sauce
  15. Sanzo
  16. Spicewalla
  17. Umamicart
  18. Wing on Wo & Co.

AAPI-owned bookstores

Looking to expand your at-home library but don’t know where to start? These AAPI-owned bookstores from across the country have a wide variety of options, from used to brand new.

  1. A Good Used Book
  2. Arkipelago Books
  3. Bel Canto Books
  4. Eastwind Books
  5. Femme Fire Books
  6. Maomi Bookstore
  7. Orphan Books
  8. Philippine Expressions Bookshop
  9. Townie Books

AAPI-owned fashion and accessories brands

These 26 fashion and accessory brands can help you update your wardrobe going into the summer. They include everything from on-trend chunky rings at BONBONWHIMS to Gentle Monster’s chic sunglasses.

  1. Abacaxi
  2. Bellemere NY
  3. BONBONWHIMS
  4. Chunks
  5. Gentle Monster
  6. Haerfest
  7. Hey Maeve
  8. Jason Wu
  9. JW Pei
  10. Kahili Creations
  11. KERISMA
  12. Kinn
  13. LEYT
  14. MOMMA
  15. Nimble Made
  16. NOTTE Jewelry
  17. Paper Project
  18. Pepper
  19. PH5
  20. Private Policy
  21. Proclaim
  22. Rastah
  23. Rue Saint Paul
  24. Sonia Hou Jewelry
  25. SVNR
  26. Verlas

AAPI-owned wellness and fitness brands

You can shop for face masks at Airpop and Happy Masks, get a good night’s sleep with Pluto Pillow or enhance your workout routine with Blogilates.

  1. Airpop
  2. Apothékary
  3. Asutra
  4. AVRE
  5. Blogilates
  6. CocoFloss
  7. Happy Masks
  8. L’Oeuf Poche
  9. Mono B
  10. Neuro
  11. Pluto Pillow
  12. Silk + Sonder

AAPI-owned travel brands

If you’re planning a few summer trips, you can get your hands on multiple AAPI-owned travel essentials, including a travel backpack from Brevitē or a versatile carry-on bag from Planeket.

  1. Brevitē
  2. Cadence
  3. Calpak
  4. Lo and Sons
  5. Planeket
  6. Senreve

Catch up on the latest from NBC News Shopping guides and recommendations and download the NBC News app for full coverage of the coronavirus outbreak.

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