- Revenue increases 82%, Company records earnings of
$0.06 per share -
Toronto Stock Exchange Symbol: DND
MISSISSAUGA, ON, May 3, 2013 /CNW/ - Cipher Pharmaceuticals Inc.
(TSX: DND); (OTC: CPHMF) today announced its financial and
operational results for the three months ended March 31, 2013.
Q1 2013 Highlights
- Net revenue increased by 82% over Q1 2012 to $3.3 million.
- EBITDA of $ 1.7 million versus
$0.3 million in Q1 2012.
- Net income was $1.5 million, or
$0.06 per share, compared with net
income of $0.1 million, or
$0.01 per share, in Q1 2012.
- Cash balance increased to $16.5
million at quarter end, compared with $15.8 million at December
31, 2012 and $10.1 million at
March 31, 2012.
- Expanded management team with the addition of Joan Chypyha as Vice President, Marketing and
Sales.
- Subsequent to quarter end, out-licensed Latin American
distribution rights for CIP-TRAMADOL ER to Tecnofarma International
Ltd.
"We delivered record financial performance in
the first quarter, reflecting the addition of new product revenue
streams, especially the strong early results from Absorica," said
Larry Andrews, President and CEO of
Cipher. "Building off this good start to the year, we are working
toward the Canadian launch of Epuris by Q3 and have recently added
experienced marketing and sales leadership to help us build our
commercial presence in Canada. In
addition, we recently licensed out the Latin American rights for
our extended-release tramadol product to Tecnofarma International,
which has deep experience in pain therapeutics and a large sales
team in the region."
Financial Review and Outlook
Net revenue for Q1 2013 was $3.3 million, an increase of 82% compared with
$1.8 million in Q1 2012. The
contribution from Absorica™ was particularly strong in
Q1 2013, with net revenue of $2.0
million, compared with $0.1
million in Q1 2012.
Net revenue from Lipofen® was
$0.8 million in Q1 2013, compared
with $1.4 million in Q1 2012. In Q1
2012, the Company received a milestone payment that contributed
$0.5 million in net revenue for the
quarter. Net revenue from the Company's extended release tramadol
product (ConZip®/Durela®) increased to
$0.5 million in Q1 2013, compared
with $0.3 million in Q1 2012.
Research and Development expense decreased in Q1
2013 to $0.3 million, compared with
$0.5 million in Q1 2012. Operating,
General and Administrative expenses for Q1 2013 were $1.3 million, compared to $1.1 million in Q1 2012.
Net income in Q1 2013 grew to $1.5 million, or $0.06 per share, compared with net income of
$0.1 million, or $0.01 per share, in Q1 2012.
The Company's cash position increased at quarter
end. As at March 31, 2013, Cipher had
cash and cash equivalents of $16.5
million, compared with $15.8
million at December 31,
2012.
For the balance of fiscal 2013, Cipher expects
continued revenue growth from its currently marketed products and
the introduction of Epuris™ in Canada during the second half of 2013. In
particular, the Company expects the full-year contribution of
Absorica™ to be a primary revenue driver. In 2013,
Cipher will be investing in commercial sales and marketing
capabilities in Canada. The
Company expects an increase in operating expenses of approximately
$2.0 million to $2.5 million during
the balance of 2013 related to the launch of Epuris™ in
Canada and to support other growth
initiatives. In addition to one-time launch costs associated with
marketing promotion and market access for Epuris™, the
Company plans to deploy a 6 to 8 person field sales force in the
second half of 2013.
Cipher expects the revenue growth in 2013 to
offset the additional spending required to build its commercial
infrastructure in Canada.
Product Update
CIP-ISOTRETINOIN
(Absorica™/Epuris™)
Absorica™ was released in the U.S. market in late
November 2012. The product has
performed well to date, achieving 7.5% market share by March 2013, based on total isotretinoin
prescriptions. The overall U.S. isotretinoin market grew in
2012, with prescriptions increasing 11% over the prior year, and
this growth has continued into 2013 with Q1 2013 prescriptions
increasing 13% over the same period in the prior year.
The product was also approved by Health Canada
in Q4 2012 under the trade name Epuris™. The Company is
preparing to launch Epuris™ by Q3 2013 and has commenced
pre-commercial activities.
Lipofen®
Lipofen® prescriptions in Q1 2013 were 4% ahead of Q1
2012 levels, and the product continues to be promoted in second
detail position by Cipher's partner.
CIP-TRAMADOL ER
(ConZip®/Durela®)
Cipher's extended-release tramadol was launched in the U.S. by
Vertical Pharmaceuticals in September
2011 under the trade name ConZip®. Subsequent to
year end, Vertical expanded its sales force to 75 representatives,
which has contributed to improved performance. In Q1 2013,
prescriptions grew 15% compared to Q1 2012. In Canada, Medical Futures launched the product
in March 2012 under the trade name
Durela®, with a dedicated sales force comprising 22
representatives. While sales to date have been below expectations,
there was continued steady improvement and growth during Q1
2013.
Cipher is actively pursuing marketing partners
for CIP-TRAMADOL ER and CIP-ISOTRETINOIN in other territories,
including Latin America.
Subsequent to quarter end, Cipher announced that the Latin American
distribution rights to CIP-TRAMADOL ER have been granted to
Tecnofarma International Ltd. Tecnofarma, headquartered in
Uruguay, operates in 18 Latin
American countries and will launch the product in certain
territories, including Brazil and
Mexico.
Other 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. 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 is working toward completion of a New
Drug Submission for the product and will provide additional detail
on expected timelines and plans in the coming months.
In addition, the Company is seeking other late-stage to
commercial-stage product candidates in specialty markets to support
its Canadian commercial strategy.
Notice of Conference Call
Cipher will hold a conference call today,
May 3, 2013, 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 with three commercial
products and a fourth in development. Our product candidates are
typically improved formulations of successful, currently marketed
drugs. We in-license a product, manage the required clinical
development and regulatory approval process, and either out-license
it to a marketing partner, or, in Canada, we may market the product ourselves.
Our core capabilities are in clinical and regulatory affairs,
product licensing, supply chain management, and marketing and
sales. Since the Company was founded in 2000, we have achieved
final regulatory approval in the U.S. and Canada for all three of our original products
and completed six marketing partnerships, generating growing
licensing revenue.
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; 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 Three Months Ended March 31,
2013
(Unaudited)
Cipher Pharmaceuticals Inc. |
|
|
|
Balance Sheets |
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|
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|
|
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|
As at March 31, 2013 and December 31,
2012 |
|
|
(in thousands of Canadian dollars -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
2013 |
|
2012 |
|
$ |
|
$ |
ASSETS |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
16,518 |
|
15,843 |
|
Accounts receivable |
5,342 |
|
3,185 |
|
Prepaid expenses and other assets |
139 |
|
212 |
|
21,999 |
|
19,240 |
|
|
|
|
|
Property and equipment, net |
25 |
|
25 |
|
|
|
|
|
Intangible assets, net |
2,413 |
|
2,690 |
|
|
|
|
|
24,437 |
|
21,955 |
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
4,284 |
|
2,808 |
|
Current portion of deferred revenue |
2,392 |
|
2,392 |
|
6,676 |
|
5,200 |
|
|
|
|
|
Deferred revenue |
3,751 |
|
4,349 |
|
10,427 |
|
9,549 |
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Share capital |
50,374 |
|
50,339 |
|
Contributed surplus |
33,295 |
|
33,227 |
|
Deficit |
(69,659) |
|
(71,160) |
|
14,010 |
|
12,406 |
|
|
|
|
|
24,437 |
|
21,955 |
Cipher Pharmaceuticals Inc. |
|
|
|
Statements of Operations and Comprehensive
Income |
|
|
|
|
|
|
Three month periods ended March 31, 2013 and
2012 |
|
|
(in thousands of Canadian dollars, except per
share data - unaudited) |
|
|
|
|
|
|
|
|
|
March 31, |
|
March 31, |
|
2013 |
|
2012 |
|
$ |
|
$ |
|
|
|
|
Revenues |
|
|
|
|
Licensing revenue |
3,293 |
|
1,811 |
|
|
|
|
Expenses |
|
|
|
|
Research and development |
308 |
|
471 |
|
Operating, general and administrative |
1,262 |
|
1,016 |
|
Amortization of intangible assets |
277 |
|
225 |
|
Interest income |
(55) |
|
(26) |
|
|
|
|
|
1,792 |
|
1,686 |
|
|
|
|
Income before income taxes |
1,501 |
|
125 |
|
|
|
|
Provision for (recovery of) income
taxes |
|
|
|
|
Current |
398 |
|
- |
|
Deferred |
(398) |
|
- |
|
|
|
|
Income and comprehensive income for the
period |
1,501 |
|
125 |
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
0.06 |
|
0.01 |
Cipher Pharmaceuticals Inc. |
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|
|
|
|
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Statements of Changes in Equity |
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Three month periods ended March 31, 2013 and
2012 |
|
|
|
|
|
|
(in thousands of Canadian dollars - unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
Share |
|
Contributed |
|
|
|
Shareholders' |
|
Capital |
|
Surplus |
|
Deficit |
|
Equity |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
Balance, January 1, 2013 |
50,339 |
|
33,227 |
|
(71,160) |
|
12,406 |
|
|
|
|
|
|
|
|
Income and comprehensive income for the period |
- |
|
- |
|
1,501 |
|
1,501 |
|
|
|
|
|
|
|
|
Shares issued under the share purchase plan |
35 |
|
- |
|
- |
|
35 |
|
|
|
|
|
|
|
|
Share-based compensation - stock option plan |
- |
|
68 |
|
- |
|
68 |
|
|
|
|
|
|
|
|
Balance, March 31, 2013 |
50,374 |
|
33,295 |
|
(69,659) |
|
14,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2012 |
50,172 |
|
33,032 |
|
(73,704) |
|
9,500 |
|
|
|
|
|
|
|
|
Income and comprehensive income for the period |
- |
|
- |
|
125 |
|
125 |
|
|
|
|
|
|
|
|
Shares issued under the share purchase plan |
39 |
|
- |
|
- |
|
39 |
|
|
|
|
|
|
|
|
Share-based compensation - stock option plan |
- |
|
49 |
|
- |
|
49 |
|
|
|
|
|
|
|
|
Balance, March 31, 2012 |
50,211 |
|
33,081 |
|
(73,579) |
|
9,713 |
Cipher Pharmaceuticals Inc. |
|
|
|
Statements of Cash Flows |
|
|
|
|
|
|
|
Three month periods ended March 31, 2013 and
2012 |
|
|
|
(in thousands of Canadian dollars -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
March 31, |
|
2013 |
|
2012 |
|
$ |
|
$ |
Cash provided by (used in) |
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
Income for the period |
1,501 |
|
125 |
|
Items not affecting cash: |
|
|
|
|
|
Depreciation of property and
equipment |
5 |
|
7 |
|
|
Amortization of intangible
assets |
277 |
|
225 |
|
|
Share-based compensation - share
purchase plan |
5 |
|
6 |
|
|
Share-based compensation - stock
option plan |
68 |
|
49 |
|
1,856 |
|
412 |
|
|
|
|
|
Changes in non-cash operating items: |
|
|
|
|
|
Accounts receivable |
(2,157) |
|
(155) |
|
|
Prepaid expenses and other
assets |
73 |
|
92 |
|
|
Accounts payable and accrued
liabilities |
1,476 |
|
300 |
|
|
Deferred revenue |
(598) |
|
(195) |
|
|
|
|
Net cash generated from operating
activities |
650 |
|
454 |
|
|
|
|
Investing activities |
|
|
|
|
Purchase of property and equipment |
(5) |
|
(10) |
|
|
|
|
Financing activities |
|
|
|
|
Proceeds from shares issued under the share
purchase plan |
30 |
|
33 |
|
|
|
|
|
|
|
|
Increase in cash |
675 |
|
477 |
Cash and cash equivalents, beginning of
period |
15,843 |
|
9,636 |
|
|
|
|
Cash and cash equivalents, end of
period |
16,518 |
|
10,113 |
SOURCE Cipher Pharmaceuticals Inc.