Company: SXTPW
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003343
Chunk: 254

Company: 60 DEGREES PHARMACEUTICALS, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 254
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 which receipt of Paxlovid or Lagevrio would be medically contraindicated, or (ii) compare Tafenoquine to placebo
in patients taking a “standard of care” regimen (defined by the FDA as Lagevrio or Paxlovid). The FDA’s position was
somewhat surprising given that neither Paxlovid nor Lagevrio is indicated for treatment of COVID-19 in low-risk patients. We determined
that conducting our study in an alternate population in the United States would be unfeasible, and that conducting an add-on-to standard
of care study might not be Phase III enabling. Accordingly, we made a decision to pivot back to continue commercialization of Arakoda
for malaria, and further evaluation of the Arakoda regimen of Tafenoquine for babesiosis and other diseases. We believe such an approach
is both less risky and less expensive.

Moving forward, our general strategy to achieve
profitability and grow shareholder value has three facets: (i) increase sales of Arakoda; (ii) conduct clinical trials to expand the
number of patients who can use Tafenoquine for new indications in the future; and (iii) reposition small molecule therapeutics with good
clinical safety profiles for new indications.

2. Components of Results of Operations

Product Revenues - net of Discounts and Rebates

We receive the majority of our product revenues
from sales of our Arakoda product to resellers in the U.S. and abroad. Foreign sales to both Australia and Europe are further subject
to profit sharing agreements for boxes sold to customers. Sales to resellers in the US are subject to considerable discounts and rebates
for services provided by our third-party logistics (“3PL”) partner and wholesalers and pharmacy benefit managers (“PBMs”).

Cost of Revenues, Gross Profit (Loss), and Gross Margin

Cost of revenues associated with our products
is primarily comprised of direct materials, shipping, manufacturing related costs incurred in the production process, serialization costs
and inventory write-downs due to expiration.

Other Operating Revenues

Other operating revenues for the periods presented
include research revenue earned from the Australian Tax Authority for research activities conducted in Australia. Beginning in the third
quarter of 2024, we began to recognize research revenues associated with our new contract with the United States Army Medical Materiel
Development Activity (USAMMDA) for Arakoda supply chain upgrade support. Research revenue under this contract is recognized when we incur
the direct costs eligible for reimbursement