UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): October 28, 2014
QLT Inc.
(Exact Name of
Registrant as specified in its charter)
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British Columbia, Canada |
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000-17082 |
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N/A |
(State or Other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
887 Great Northern Way, Suite 250, Vancouver, B.C.
Canada, V5T 4T5
(Address
of principal executive offices)
Registrants telephone number, including area code: (604) 707-7000
Not Applicable
(Registrants name or former address, if change since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. Other Events.
On October 28, 2014, QLT Inc. (the Company) reported its financial results for the third quarter ended September 30, 2014. The full text
of the press release announcing such results is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Such information shall not be deemed filed for purposes of Section 18 of the
Securities and Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
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Number |
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Description |
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99.1 |
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Press Release of QLT Inc. dated October 28, 2014 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
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QLT INC. |
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By: |
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/s/ Sukhi Jagpal |
Name: |
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Sukhi Jagpal |
Title: |
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Chief Financial Officer |
Date: October 28, 2014
Exhibit 99.1
News release
QLT ANNOUNCES THIRD QUARTER 2014 RESULTS
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For Immediate Release |
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October 28, 2014 |
VANCOUVER, CANADA QLT Inc. (NASDAQ: QLTI; TSX: QLT) (QLT or the Company) is a biotechnology
company dedicated to the development and commercialization of innovative ocular products that address the unmet medical needs of patients and clinicians worldwide. The Company reported financial results today for the third quarter ended
September 30, 2014. Unless otherwise specified, all amounts are reported in U.S. dollars and in accordance with U.S. GAAP.
2014 THIRD QUARTER
FINANCIAL RESULTS
QLT Expenses
Research and
Development (R&D) expenses relate to QLTs synthetic retinoid program. During the third quarter of 2014, QLT incurred R&D expenses of $2.8 million compared to $5.2 million for the same period in 2013. The net $2.4 million decrease was
primarily due to higher costs incurred in 2013 related to certain toxicity studies, which commenced in the second half of 2013, and our Leber Congenital Amaurosis and Retinitis Pigmentosa Phase Ib retreatment study, which was substantially completed
in 2013. The period-over-period decrease in R&D expenditures was further positively affected by savings realized in 2014 related to the continuing impact of our 2012 workforce reduction and other restructuring activities.
During the third quarter of 2014, Selling, General and Administrative (SG&A) expenses were $2.4 million compared to $1.7 million for the same period in
2013. The net $0.7 million increase in SG&A expenses was primarily due to $1.2 million of consulting and transaction fees incurred in connection with the proposed merger with Auxilium Pharmaceuticals, Inc. (Auxilium) described below.
These costs were partially offset by net overall savings realized in 2014 related to the continuing impact of our 2012 workforce reduction and other restructuring activities.
Operating Losses and Loss per Share
The operating loss
for the third quarter of 2014 was $5.4 million compared to $7.5 million for the same period in 2013. The net $2.1 million decrease in operating losses is primarily due to lower R&D and restructuring expenses. These cost savings were partially
offset by $1.2 million of consulting and transaction fees incurred during the period in connection with the proposed merger with Auxilium.
Loss per share
from continuing operations was $0.10 in the third quarter of 2014 compared to $0.14 in the same period in 2013. The decrease in loss per share is due to the same factors described above, as well as a $0.4 million income tax recovery recorded in
connection with a decrease in our provision for uncertain tax positions due to the expiration of the statute of limitations.
Cash and Cash Equivalents
As at September 30, 2014, the Companys consolidated cash and cash equivalents were $137.8 million compared to $118.5 million of cash and
cash equivalents at the end of 2013. The increase was primarily due to $38.1 million of proceeds received from Tolmar in connection with the Eligard® related contingent consideration,
which was partially offset by cash used in operating activities.
Termination of Merger Agreement with Auxilium
As previously reported, on October 8, 2014, Auxilium terminated the Agreement and Plan of Merger dated June 25, 2014 (the Merger
Agreement) among QLT, Auxilium, QLT Holding Corp. and QLT Acquisition Corp. The Merger Agreement contemplated a business combination whereby Auxilium would have become an indirect wholly-owned subsidiary of QLT (the Combined
Company) and Auxiliums stockholders would have received common shares representing approximately 76% of the Combined Company. On October 8, 2014, Auxilium terminated the Merger Agreement after receiving from Endo International plc
what Auxiliums board of directors determined to be a superior proposal to acquire all of the issued and outstanding shares of Auxilium. In accordance with the termination provisions of the Merger Agreement, on October 9, 2014,
Auxilium paid QLT a termination fee of $28.4 million. On October 22, 2014, pursuant to the terms of our financial advisory services agreement with Credit Suisse, our financial advisor in the transaction, we paid Credit Suisse a fee of $5.7
million in connection with the termination of the Merger Agreement.
Passive Foreign Investment Company
The Company believes that it was classified as a Passive Foreign Investment Company (PFIC) for 2008 through 2013, and that it may be classified as a PFIC in
2014, which could have adverse tax consequences for U.S. shareholders. Please refer to our 2013 Annual Report on Form 10-K for additional information.
QLT Inc.Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
In accordance with United Stated generally accepted accounting principles
(Unaudited)
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Three months ended September 30, |
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Nine months ended September 30, |
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(In thousands of U.S. dollars except share and per share amounts) |
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2014 |
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2013 |
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2014 |
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2013 |
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Expenses |
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Research and development |
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$ |
2,792 |
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$ |
5,243 |
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$ |
11,684 |
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$ |
13,715 |
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Selling, general and administrative |
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2,388 |
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1,676 |
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8,642 |
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5,568 |
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Depreciation |
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222 |
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230 |
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680 |
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717 |
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Restructuring charges |
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354 |
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744 |
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1,847 |
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5,402 |
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7,503 |
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21,750 |
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21,847 |
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Operating loss |
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(5,402 |
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(7,503 |
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(21,750 |
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(21,847 |
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Investment and other (expenses) income |
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Net foreign exchange losses |
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(54 |
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(74 |
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(36 |
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Interest income |
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27 |
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39 |
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80 |
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175 |
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Fair value change in contingent consideration |
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71 |
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1,466 |
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1,904 |
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Other |
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17 |
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64 |
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115 |
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100 |
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44 |
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120 |
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1,587 |
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2,143 |
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Loss from continuing operations before income taxes |
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(5,358 |
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(7,383 |
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(20,163 |
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(19,704 |
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Recovery of (provision for) income taxes |
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432 |
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(109 |
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194 |
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(434 |
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Loss from continuing operations |
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(4,927 |
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(7,492 |
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(19,969 |
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(20,138 |
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(Loss) income from discontinued operations, net of income taxes |
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(6 |
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96 |
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(63 |
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116 |
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Net loss and comprehensive loss |
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(4,932 |
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$ |
(7,396 |
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($ |
20,032 |
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$ |
(20,022 |
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Basic and diluted net loss per common share |
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Continuing operations |
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($ |
0.10 |
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($ |
0.15 |
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($ |
0.39 |
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($ |
0.40 |
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Discontinued operations |
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(0.00 |
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0.00 |
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(0.00 |
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0.00 |
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Net loss per common share |
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($ |
0.10 |
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($ |
0.14 |
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($ |
0.39 |
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($ |
0.39 |
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Weighted average number of common shares outstanding (in thousands) |
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Basic and diluted |
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51,151 |
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51,082 |
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51,105 |
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50,851 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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(In thousands of U.S. dollars) |
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September 30, 2014 |
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December 31, 2013 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
137,828 |
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$ |
118,521 |
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Accounts receivable, net of allowances for doubtful accounts |
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4,440 |
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4,590 |
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Contingent considerationcurrent |
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36,582 |
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Income taxes receivable |
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68 |
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77 |
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Deferred income tax assetscurrent |
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191 |
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Prepaid and other assets |
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787 |
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1,863 |
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Total current assets |
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143,123 |
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161,824 |
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Property, plant and equipment |
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1,211 |
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1,866 |
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Deferred income tax assetsnon-current |
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177 |
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Total assets |
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144,334 |
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163,867 |
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LIABILITIES |
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Current liabilities |
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Accounts payable |
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$ |
2,405 |
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$ |
2,609 |
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Accrued liabilities |
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1,283 |
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1,498 |
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Accrued restructuring charge |
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0 |
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130 |
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Total current liabilities |
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3,688 |
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4,237 |
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Uncertain tax position liabilities |
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398 |
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1,846 |
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Total liabilities |
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4,086 |
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6,083 |
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SHAREHOLDERS EQUITY |
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Share capital |
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Authorized |
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500,000,000 common shares without par value |
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5,000,000 first preference shares without par value, issuable in series |
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Issued and outstanding common shares |
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$ |
466,979 |
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$ |
466,229 |
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March 31, 2014 51,081,878 shares |
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December 31, 2013 51,081,878 shares |
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Additional paid-in capital |
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97,590 |
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95,844 |
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Accumulated deficit |
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(527,290 |
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(507,258 |
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Accumulated other comprehensive income |
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102,969 |
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102,969 |
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Total shareholders equity |
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140,248 |
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157,784 |
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Total shareholders equity and liabilities |
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$ |
144,334 |
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$ |
163,867 |
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About QLT
QLT is a biotechnology company dedicated to the development and commercialization of innovative ocular products that address the unmet medical needs of
patients and clinicians worldwide. We are focused on developing our synthetic retinoid program for the treatment of certain inherited retinal diseases.
QLTs head office is based in Vancouver, Canada and the Company is publicly traded on NASDAQ Stock Market (symbol: QLTI) and the Toronto Stock Exchange
(symbol: QLT). For more information about the Companys products and developments, please visit our web site at www.qltinc.com.
QLT Inc.
Contacts:
Investor & Media Relations
Andrea Rabney or David Pitts
Argot Partners
212-600-1902
andrea@argotpartners.com
david@argotpartners.com
Visudyne® is a registered trademark of Novartis AG
Eligard® is a registered trademark of Tolmar Therapeutics, Inc.
Certain statements in this press release constitute forward-looking statements of QLT within the meaning of the Private Securities Litigation
Reform Act of 1995 and constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements include, but are not limited to: statements concerning our PFIC status; and statements
which contain language such as: assuming, prospects, goal, future, projects, potential, believes, expects, hopes, and outlook.
Forward-looking statements are predictions only which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties
and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: the Companys future operating results are uncertain and likely to fluctuate; currency
fluctuations; the risk that we may not receive any or as much additional contingent consideration as we might expect under our agreements with respect to the sale of Visudyne® and the
PPDS Technology; the risk that we will be treated as a Passive Foreign Investment Company (PFIC) in 2014 and future years; risks and uncertainties concerning the impact that QLTs success or failure in pursuing future strategic initiatives will
have on the market price of our securities; risks resulting from the potential loss of key personnel; uncertainties relating to our development plans, timing and results of the clinical development and commercialization of our products and
technologies; assumptions related to continued enrollment trends, efforts and success, and the associated costs of these programs; outcomes for our clinical trials may not be favorable or may be less favorable than interim/preliminary results and/or
previous trials; there may be varying interpretations of data produced by one or more of our clinical trials; risks and uncertainties associated with the safety and effectiveness of our technology; the timing, expense and uncertainty associated with
the regulatory approval process for products to advance through development stages; risks and uncertainties related to the scope, validity, and enforceability of our intellectual property rights and the impact of patents and other intellectual
property of third parties; and general economic conditions and other factors described in detail in QLTs Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the U.S. Securities and Exchange Commission and Canadian
securities regulatory authorities. Forward-looking statements are based on the current expectations of QLT and QLT does not assume any obligation to update such information to reflect later events or developments except as required by law.
This press release also contains forward looking information that constitutes financial outlooks within the meaning of applicable
Canadian securities laws. This information is provided to give investors general guidance on managements current expectations of certain factors affecting our business, including our financial results. Given the uncertainties, assumptions and
risk factors associated with this type of information, including those described above, investors are cautioned that the information may not be appropriate for other purposes.
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