SmartKem, Inc. reported its financial results for the second quarter of 2025, revealing a decline in revenue and an increase in operating losses compared to the same period in 2024. The company generated revenue of $32,000 for the three months ended June 30, 2025, down from $40,000 in the prior year. For the first half of 2025, revenue totaled $55,000, compared to $40,000 for the same period in 2024. The cost of revenue also decreased slightly, leading to a gross profit of $4,000 for the quarter and $26,000 for the six months, both lower than the previous year.
Operating expenses surged to $4.7 million for the second quarter, a 54.1% increase from $3.0 million in the same quarter of 2024. This rise was primarily driven by a significant increase in research and development expenses, which reached $2.4 million, up 109.5% year-over-year. The increase was attributed to higher personnel costs and expenses related to the extension of the CPI Framework agreement. General and administrative expenses also rose to $2.4 million, reflecting a 28.0% increase, largely due to higher professional service fees.
The company reported a net loss of $2.4 million for the second quarter, an improvement from a net loss of $3.1 million in the same quarter of 2024. For the first half of 2025, the net loss was $4.5 million, compared to $4.8 million in the prior year. The improvement in net loss was supported by a substantial increase in non-operating income, which reached $2.0 million for the quarter, compared to a loss of $0.3 million in the same period last year, primarily due to foreign currency gains.
As of June 30, 2025, SmartKem's cash and cash equivalents stood at $1.2 million, a significant decrease from $7.1 million at the end of 2024. The company reported net cash used in operating activities of $6.1 million for the first half of 2025, up from $4.4 million in the same period of 2024. The company anticipates that its current cash balance will only sustain operations through September 2025, necessitating additional capital to continue its research and development activities.
Looking ahead, SmartKem faces significant challenges, including the need for additional funding to support its operations and development efforts. The company plans to explore various financing options, including equity offerings and strategic alliances, to meet its operational needs. However, there is substantial uncertainty regarding the availability of such financing, which could impact the company's ability to continue as a going concern.
About SmartKem, Inc.
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