- Results highlighted by strong revenue and earnings growth
-
MISSISSAUGA,
ON, Oct. 24, 2012 /CNW/ -
Cipher Pharmaceuticals Inc. (TSX: DND) (OTC: CPHMF) today announced
its financial and operational results for the three months ended
September 30, 2012 ("Q3 2012").
Q3 2012 Summary
- Achieved quarterly net revenue of $2.1
million, an 89% increase over Q3 2011.
- EBITDA of $1.0 million versus nil
in Q3 2011.
- Net income in Q3 2012 was $0.8
million, compared with a loss of $0.2
million in Q3 2011.
- Cash balance increased to $15.1
million, compared with $14.4
million as at June 30, 2012
and $9.6 million at December 31, 2011.
- Acquired the Canadian license and distribution rights for the
Betesil® Patch, a novel treatment for inflammatory skin
conditions such as plaque psoriasis.
"Strong third-quarter revenues combined with
consistent expense levels year over year allowed us to achieve
substantially higher earnings and strengthened our cash balance,"
said Larry Andrews, President and
CEO of Cipher. "The near-term launch of Absorica in the U.S., our
highest-potential product to date, positions us well for the
balance of 2012 and for continued strong revenue growth in
2013."
Financial Review
Net revenue in Q3 2012 was $2.1 million, an increase of 89% compared with
$1.1 million in Q3 2011. Net revenue
from Lipofen® increased to $1.3
million during Q3 2012, compared with $0.5 million in Q3 2011. Net revenue from ConZip®
was $0.3 million in Q3 2012, compared
with $0.5 million in Q3 2011. ConZip®
revenue was higher in the prior year as a result of the impact of
initial shipments to support the product's launch in Q3 2011.
Revenue from Durela® was not significant during Q3 2012 as the
product was only launched in mid-March
2012. Absoricaä contributed $0.5
million of net revenue, compared with $0.1 million in Q3 2011, reflecting recognition
of a portion of milestone payments received to date.
Research and Development expense decreased
during Q3 2012 to $0.3 million,
compared with $0.5 million in Q3
2011. Operating, General and Administrative expenses for Q3 2012
were $0.8 million, compared to
$0.7 million in Q3 2011. Net income
in Q3 2012 was $0.8 million, or
$0.03 per share, compared with a net
loss of $0.2 million, or $0.01 per share, in Q3 2011.
The Company's cash position increased at quarter
end. As at September 30, 2012, Cipher
had cash and cash equivalents of $15.1
million, compared with $14.4
million as at June 30, 2012
and $9.6 million at December 31, 2011.
Product Update
Lipofen®
During Q3 2012, Kowa's promotional effort resulted in Lipofen®
monthly prescriptions and sales increasing significantly as
reflected in an 89% increase in Cipher's net revenue over Q3 2011.
During Q3 2012, Cipher achieved another contractual sales goal for
the product and as a result, the royalty percentage for Lipofen
increased by three percentage points. This change was retroactive
to October 2011 and resulted in a
one-time catch-up payment which was recorded in Q3 2012.
CIP-TRAMADOL ER (ConZip®/Durela®)
Cipher's extended-release tramadol for the treatment of moderate to
moderately severe chronic pain, was launched in the U.S. by
Vertical Pharmaceuticals in September
2011 under the trade name ConZip®. Vertical's dedicated
sales force comprises approximately 60 representatives.
In Canada,
Medical Futures launched the product in March 2012 under the trade name Durela®, with a
dedicated sales force comprising 22 representatives.
With CIP-TRAMADOL ER's best-in-class product
attributes, Cipher is optimistic revenues will grow in the coming
quarters in both the U.S. and Canada.
In addition, Cipher is actively pursuing
out-licensing discussions for CIP-TRAMADOL ER in other territories,
including Latin America.
CIP-ISOTRETINOIN (Absorica™)
During Q3 2012, Cipher and its U.S. partner, Ranbaxy
Pharmaceuticals, continued with pre-commercial activities,
including commercial batch manufacturing and marketing planning, in
anticipation of a product launch in Q4 2012. Cipher is
responsible for supplying Ranbaxy with commercial product.
Cipher completed a New Drug Submission to Health
Canada in Q4 2011. This has been accepted for review, with a
response from Health Canada expected by Q1 2013. Once
approved, the Company plans to market the product in Canada on its own.
In addition, Cipher is actively pursuing
out-licensing discussions for CIP-ISOTRETINOIN in other
territories, including Latin
America.
New Products
In Q3 2012, Cipher obtained exclusive license and distribution
rights in Canada to market the
Betesil® Patch, a novel, patent-protected, self-adhesive
medicated plaster for the treatment of inflammatory skin conditions
such as plaque psoriasis. Based on initial feedback from Canadian
dermatologists, the Betesil® Patch is expected to
provide distinct advantages over existing treatment options,
particularly for patients who suffer from plaque psoriasis in hard
to treat areas such as knees and elbows. The efficacy and
safety of the Betesil® Patch has been established in
three successful phase III trials, and the product is currently
marketed in several European countries. Cipher intends to initiate
the regulatory review process in Canada in Q4 of this year.
The Company is seeking other late-stage to
commercial-stage product candidates to complement its Canadian
commercialization plans for CIP-ISOTRETINOIN and the
Betesil® Patch.
Notice of Conference Call
Cipher will hold a conference call today,
October 24, 2012, at 8:30 a.m (ET) to
discuss its financial results and other corporate developments. To
access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. A live audio webcast of the call will
be available at www.cipherpharma.com. The webcast will be archived
for 90 days.
About Cipher Pharmaceuticals Inc.
Cipher Pharmaceuticals (TSX: DND; OTC: CPHMF) is
a growing specialty pharmaceutical company that commercializes
novel formulations of successful, currently marketed
molecules. Cipher's strategy is to in-license clearly
differentiated products, advance them through the clinical
development and regulatory approval stages, and out-license to
international marketing partners. The Company's first product
is a fenofibrate formulation marketed in the United States as Lipofen®. Cipher's
second product, an extended-release tramadol, is marketed in
the United States as
ConZip® and in Canada as
Durela®. Cipher's third product, a novel formulation of the
acne treatment isotretinoin, was recently approved by the FDA and
is expected to be launched in Q4 2012 as Absorica™. The
product is also currently being reviewed by
Health Canada. For more
information, please visit www.cipherpharma.com.
Forward-Looking Statements
Statements made in this news release, other
than those concerning historical financial information, may be
forward-looking and therefore subject to various risks and
uncertainties. The words "may", "will", "could", "should", "would",
"suspect", "outlook", "believe", "plan", "anticipate", "estimate",
"expect", "intend", "forecast", "objective", "hope" and "continue"
(or the negative thereof), and words and expressions of similar
import, are intended to identify forward-looking statements.
Certain material factors or assumptions are applied in making
forward-looking statements and actual results may differ materially
from those expressed or implied in such statements. Factors
that could cause results to vary include those identified in the
Company's Annual Information Form and other filings with Canadian
securities regulatory authorities. These factors include, but are
not limited to losses; the applicability of patents and proprietary
technology; possible patent litigation; approval of products in the
Company's pipeline; marketing of products; meeting projected drug
development timelines and goals; product liability and insurance;
dependence on strategic partnerships and licensees; concentration
of the Company's revenue; substantial competition and rapid
technological change in the pharmaceutical industry; the
publication of negative results of clinical trials of the Company's
products; the ability to access capital; the ability to attract and
retain key personnel; changes in government regulation or
regulatory approval processes; dependence on contract research
organizations; third party reimbursement; the success of the
Company's strategic investments; the achievement of development
goals and time frames; the possibility of shareholder dilution;
market price volatility of securities; and the existence of
significant shareholders. All forward-looking statements presented
herein should be considered in conjunction with such filings.
Except as required by Canadian securities laws, the Company does
not undertake to update any forward-looking statements; such
statements speak only as of the date made.
Cipher Pharmaceuticals Inc.
Financial Statements
For the Nine Months Ended September 30,
2012
(Unaudited)
Cipher Pharmaceuticals Inc.
Balance Sheets |
|
|
|
|
|
|
|
As at September 30, 2012 and
December 31, 2011 |
|
|
(in thousands of Canadian dollars -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
2012 |
|
2011 |
|
$ |
|
$ |
ASSETS |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
15,081 |
|
9,636 |
|
Accounts receivable |
2,757 |
|
1,782 |
|
Prepaid expenses and other assets |
102 |
|
272 |
|
17,940 |
|
11,690 |
|
|
|
|
|
Property and equipment, net |
21 |
|
25 |
|
|
|
|
|
Intangible assets, net |
2,968 |
|
2,944 |
|
20,929 |
|
14,659 |
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
2,810 |
|
1,912 |
|
Current portion of deferred revenue |
2,318 |
|
917 |
|
5,128 |
|
2,829 |
|
|
|
|
|
Deferred revenue |
4,947 |
|
2,330 |
|
10,075 |
|
5,159 |
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Share capital |
50,294 |
|
50,172 |
|
Contributed surplus |
33,175 |
|
33,032 |
|
Deficit |
(72,615) |
|
(73,704) |
|
10,854 |
|
9,500 |
|
|
|
|
|
20,929 |
|
14,659 |
Cipher Pharmaceuticals
Inc. |
|
|
|
|
|
|
|
Statements of Operations and
Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three and nine month periods ended
September 30, 2012 and 2011 |
|
|
|
|
(in thousands of Canadian dollars,
except per share data - unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
Nine months
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Licensing revenue |
2,118 |
|
1,120 |
|
5,558 |
|
2,522 |
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Research and development |
335 |
|
468 |
|
1,154 |
|
1,593 |
|
Operating, general and administrative |
799 |
|
667 |
|
2,676 |
|
2,462 |
|
Amortization of intangible assets |
277 |
|
234 |
|
747 |
|
353 |
|
Interest income |
(47) |
|
(22) |
|
(108) |
|
(65) |
|
|
|
|
|
|
|
|
|
1,364 |
|
1,347 |
|
4,469 |
|
4,343 |
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
754 |
|
(227) |
|
1,089 |
|
(1,821) |
|
|
|
|
|
|
|
|
Provision for (recovery of) income
taxes |
|
|
|
|
|
|
|
|
Current |
225 |
|
- |
|
352 |
|
- |
|
Deferred |
(225) |
|
- |
|
(352) |
|
- |
|
|
|
|
|
|
|
|
Income (loss) and comprehensive
income (loss)
for the period |
754 |
|
(227) |
|
1,089 |
|
(1,821) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss)
per share |
0.03 |
|
(0.01) |
|
0.04 |
|
(0.08) |
Cipher Pharmaceuticals Inc. |
|
|
|
|
|
|
|
Statements of Changes in Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine month periods ended September
30, 2012 and 2011 |
|
|
|
|
|
|
(in thousands of Canadian dollars -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Capital |
|
Contributed
Surplus |
|
Deficit |
|
Total
Shareholders'
Equity |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
Balance, January 1, 2012 |
50,172 |
|
33,032 |
|
(73,704) |
|
9,500 |
|
|
|
|
|
|
|
|
Income and comprehensive income for the
period |
- |
|
- |
|
1,089 |
|
1,089 |
|
|
|
|
|
|
|
|
Exercise of stock options |
8 |
|
(8) |
|
- |
|
- |
|
|
|
|
|
|
|
|
Shares issued under the share purchase
plan |
114 |
|
- |
|
- |
|
114 |
|
|
|
|
|
|
|
|
Share-based compensation - stock option
plan |
- |
|
151 |
|
- |
|
151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2012 |
50,294 |
|
33,175 |
|
(72,615) |
|
10,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2011 |
49,977 |
|
32,890 |
|
(71,393) |
|
11,474 |
|
|
|
|
|
|
|
|
Loss and comprehensive loss for the
period |
- |
|
- |
|
(1,821) |
|
(1,821) |
|
|
|
|
|
|
|
|
Exercise of stock options |
90 |
|
(43) |
|
- |
|
47 |
|
|
|
|
|
|
|
|
Shares issued under the share purchase
plan |
66 |
|
- |
|
- |
|
66 |
|
|
|
|
|
|
|
|
Share-based compensation - stock option
plan |
- |
|
134 |
|
- |
|
134 |
|
|
|
|
|
|
|
|
Balance, September 30, 2011 |
50,133 |
|
32,981 |
|
(73,214) |
|
9,900 |
Cipher Pharmaceuticals
Inc. |
|
|
|
|
|
|
|
Statements of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three and nine month periods ended
September 30, 2012 and 2011 |
|
|
|
|
|
|
(in thousands of Canadian dollars -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
Nine months |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
Cash provided by (used in) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
Income (loss) for the period |
754 |
|
(227) |
|
1,089 |
|
(1,821) |
|
Items not affecting cash: |
|
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
3 |
|
8 |
|
16 |
|
29 |
|
|
Amortization of intangible assets |
277 |
|
234 |
|
747 |
|
353 |
|
|
Share-based compensation - share purchase
plan |
6 |
|
10 |
|
17 |
|
10 |
|
|
Share-based compensation - stock option plan |
51 |
|
53 |
|
151 |
|
134 |
|
1,091 |
|
78 |
|
2,020 |
|
(1,295) |
|
|
|
|
|
|
|
|
|
Changes in non-cash operating
items: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
(417) |
|
(874) |
|
(975) |
|
(896) |
|
|
Prepaid expenses and other assets |
(27) |
|
117 |
|
170 |
|
375 |
|
|
Accounts payable and accrued liabilities |
795 |
|
784 |
|
898 |
|
173 |
|
|
Deferred revenue |
(698) |
|
507 |
|
4,018 |
|
459 |
|
|
|
|
|
|
|
|
Net cash generated from (used in)
operating activities |
744 |
|
612 |
|
6,131 |
|
(1,184) |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
- |
|
(6) |
|
(12) |
|
(12) |
|
Acquisition of intangible rights |
(100) |
|
- |
|
(771) |
|
- |
|
|
|
|
|
|
|
|
Net cash generated from (used in)
investing activities |
(100) |
|
(6) |
|
(783) |
|
(12) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
Proceeds from shares issued under the
share purchase plan |
34 |
|
56 |
|
97 |
|
56 |
|
Proceeds from exercise of stock
options |
- |
|
- |
|
- |
|
47 |
|
|
|
|
|
|
|
|
Net cash generated from (used in)
financing activities |
34 |
|
56 |
|
97 |
|
103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash and
cash equivalents |
678 |
|
662 |
|
5,445 |
|
(1,093) |
Cash and cash equivalents,
beginning of period |
14,403 |
|
8,573 |
|
9,636 |
|
10,328 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of
period |
15,081 |
|
9,235 |
|
15,081 |
|
9,235 |
SOURCE Cipher Pharmaceuticals Inc.