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TORONTO, Aug. 13, 2014 /PRNewswire/ - Concordia Healthcare Corp. ("Concordia" or the "Company") (TSX: CXR) (OTCQX: CHEHF), a diverse healthcare company focused on
legacy pharmaceutical products, orphan drugs, and medical devices for
the diabetic population, today announced its financial and operational
results for the three and six months ended June 30, 2014.
All financial references are in U.S. dollars unless otherwise noted.
||Three Months Ended June 30,|
|Six Months Ended June 30,|
Net income (loss)
Loss per share basic
Loss per share diluted
Cash and cash equivalents
Second Quarter 2014 Operational Highlights
On May 14, 2014, the Company entered into a secured credit facility
having a principal amount of up to $195 million, consisting of a $170
million term loan and a $25 million operating line.
On May 15, 2014, the Company completed the acquisition of Donnatal®, an adjunctive therapy in the treatment of irritable bowel syndrome and
acute enterocolitis, for $200 million in cash and an aggregate of
4,605,833 common shares of Concordia. During 2013, Donnatal generated
revenues of $49.1 million and EBITDA1 of $40.2 million.
- Concordia's board of directors approved a $0.075 dividend per common
share. A record date of October 15, 2014 is expected to be declared
with a distribution of proceeds expected to occur on October 31, 2014.
Declarations and payments will be made in U.S. dollars. All future
quarterly dividends will be subject to quarterly financial review and
Subsequent to quarter end, Thomas Jefferson University Hospital
in Philadelphia became the first site authorized to begin screening
patients in the Company's randomized Phase 3 clinical trial to treat a
rare form of bile duct cancer, cholangiocarcinoma, using photodynamic
therapy (PDT) with PHOTOFRIN®. The Company expects more sites to be operational in the near-term.
Subsequent to quarter end, the Company announced that its subsidiary Pinnacle Biologics, Inc. enrolled the first patients in a randomized Phase 2 trial to evaluate
PDT with PHOTOFRIN for patients with epithelioid malignant pleural
mesothelioma. The study is expected to enroll 102 patients over four
years, and is being supported by an $8 million grant from the National
Going forward, Concordia plans to grow its businesses by:
supplementing its existing portfolio by acquiring or in-licensing
additional legacy products;
expanding its Specialty Healthcare Distribution Division by distributing
developing PHOTOFRIN® for new indications including cholangiocarcinoma; and
acquiring additional orphan drugs.
"Closing the Donnatal transaction this quarter was a significant gain
for Concordia; both in the quality of the product we have added to our
legacy portfolio and in the revenue-generating capability of the
asset," said Mark Thompson, Chief Executive Officer of Concordia. "In
addition to the positive impact from Donnatalon our balance sheet, we have seen sequential growth from our Legacy
Pharmaceuticals Division and Specialty Healthcare Distribution since
going public in December 2013. These divisions provide a stable revenue
stream for the continued development of PDT with PHOTOFRIN in orphan
indications, and allow us to consider further acquisition opportunities
in the future."
Second Quarter 2014 Financial Results
The Company's net revenue was $26,053,000 and $42,863,000 for the three
and six months ended June 30, 2014, respectively, while gross profit
for the same periods was $21,499,000 and $34,455,000.
Net revenue and gross profit are derived from Concordia's Legacy
Pharmaceuticals Division, its Orphan Drugs Division, and its Specialty
Legacy Pharmaceuticals Division
Net revenues for the Legacy Pharmaceuticals Division were $19,546,000
and $28,855,000 for the three and six months ended June 30, 2014,
respectively, related to the sales of Kapvay®, Orapred ODT®, Orapred OS®, Ulesfia® and Donnatal after subtracting deductions from Gross Sales such as
chargebacks, returns and allowances, rebates and other deductions that
are customary in the industry.
Cost of sales were $4,002,000 and $6,212,000 for the three and six
months ended June 30, 2014, and reflect the costs of active
pharmaceutical ingredients, excipients, packaging and freight costs and
Gross Profit was $15,544,000 and $22,643,000 for the three and six
months ended June 30, 2014.
Orphan Drugs Division
The operations of Concordia's Orphan Drugs Division commenced on
December 20, 2013 with the acquisition of Pinnacle Biologics, Inc. The
Orphan Drugs Division is intended to provide growth opportunities
through the expansion into new indications for existing products or the
acquisition of approved orphan drugs and further expansion within their
identified markets and new indications.
Net revenues for the Orphan Drugs Division were $778,000 and $4,348,000
for the three and six months ended June 30, 2014, respectively,
primarily related to sales of PDT with PHOTOFRIN. PDT with PHOTOFRIN is
Concordia's commercial oncology drug for the treatment of certain forms
Cost of sales were ($405,000) and $295,000 for the three and six months
ended June 30, 2014, and reflect the cost of manufactured products
sold, quality assurance and distribution.
Gross Profit was $1,183,000 and $4,053,000 for the three and six months
ended June 30, 2014.
Specialty Healthcare Distribution Division
Net revenues for the Specialty Healthcare Distribution division were
$5,729,000 and $9,660,000 for the three and six months ended June 30,
2014, respectively, related primarily to sales and distribution of
diabetes testing supplies and orthotics for diabetic patients.
Costs of sales were $957,000 and $1,901,000 for the three and six months
ended June 30, 2014, and reflect the cost of products, warehousing and
Gross profit was $4,772,000 and $7,759,000 for the three and six months
ended June 30, 2014.
Overall for the Company, operating income was $2,731,000 and $7,670,000
for the three and six months ended June 30, 2014.
Operating expenses were $18,768,000 for the three months ended June 30,
2014, including general and administrative expenses, which were
$4,931,000, selling expenses of $2,196,000, acquisition-related costs
of $8,314,000, share-based compensation of $1,380,000, and research and
development costs of $1,931,000. Operating expenses were $26,785,000
for the six months ended June 30, 2014.
Net cash used in operating activities was $6,353,000 and $9,395,000 for
the three and six months ended June 30, 2014, and was primarily related
to the payment of liabilities, deposits on inventory purchases and
advanced funding of clinical trial costs. Net cash used in operating
activities also included $8,488,000 in acquisition related payments
during the six months ended June 30, 2014.
As at June 30, 2014 the Company had 28,511,239 common shares issued and
outstanding, and 30,768,519 on a fully diluted basis.
Conference Call Notification
Management will host a conference call to discuss the second quarter
2014 results on Thursday, August 14, 2014 at 8:30 am ET. Following
management's presentation, there will be a question-and-answer session.
To participate in the conference call, please dial (888) 231-8191 or
A digital conference call replay will be available until midnight on
August 28, 2014 (ET) by calling (855) 859-2056 or (416) 849-0833.
Please enter the password 79382932 when instructed. A webcast replay
will be available for 365 days by accessing a link through the Events
section at visit www.concordiarx.com
Concordia is a diverse healthcare company focused on legacy
pharmaceutical products, orphan drugs, and medical devices for the
diabetic population. The Company's pharmaceutical business consists of
ADHD-treatment Kapvay® (clonidine extended release tablets), Head Lice Treatment Ulesfia® (benzyl alcohol) Lotion, Asthma-related medication Orapred ODT® (prednisolone sodium phosphate orally disintegrating tablets)and Irritable Bowel Syndrome treatment Donnatal® (belladonna alkaloids, phenobarbital).Concordia's Specialty Healthcare Distribution (SHD) division, Complete
Medical Homecare, distributes medical supplies targeting diabetes and
related conditions. Concordia's orphan drug division, Pinnacle, markets
PHOTOFRIN® in the United States.
Concordia operates out of facilities in Oakville, Ontario; Lenexa,
Kansas (near Kansas City, Missouri); Chicago, Illinois; Bridgetown,
Barbados; and Charlottesville, Virginia.
1As used herein, EBITDA is defined as net income adjusted for net
interest expense, income tax expense, depreciation and amortization.
Management uses EBITDA to assess the Company's operating performance. A
reconciliation of net income to EBITDA is provided below.
2As used herein, adjusted EBITDA is defined as EBITDA adjusted for
one-time charges associated with acquisitions, one-time charges
associated with the Company's listing on the TSX, non-cash items such
as unrealized gains / losses on derivative instruments, change in fair
value of contingent consideration, share-based compensation and
realized / unrealized gains/losses related to foreign exchange
revaluation. Management uses adjusted EBITDA as a key metric in
assessing business performance when comparing actual results to budgets
and forecasts. Management believes adjusted EBITDA is an important
measure of operating performance and cash flow, and provides useful
information to investors because it highlights trends in the underlying
business that may not otherwise be apparent when relying solely on IFRS
This press release makes reference to certain non-IFRS measures. These
non-IFRS measures are not recognized measures under IFRS and do not
have a standardized meaning prescribed by IFRS, and are therefore
unlikely to be comparable to similar measures presented by other
companies. When used, these measures are defined in such terms as to
allow the reconciliation to the closest IFRS measure. These measures
are provided as additional information to complement those IFRS
measures by providing further understanding of the Company's results of
operations from management's perspective. Accordingly, they should not
be considered in isolation nor as a substitute for analyses of the
Company's financial information reported under IFRS. Management uses
non-IFRS measures such as EBITDA and Adjusted EBITDA to provide
investors with a supplemental measure of the Company's operating
performance and thus highlight trends in the Company's core business
that may not otherwise be apparent when relying solely on IFRS
financial measures. Management also believes that securities analysts,
investors and other interested parties frequently use non-IFRS measures
in the evaluation of issuers. Management also uses non-IFRS measures
in order to facilitate operating performance comparisons from period to
period, prepare annual operating budgets, and to assess its ability to
meet future debt service, capital expenditure, and working capital
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Concordia and
its business, which may include, but are not limited to, the impact of
the acquisition of pharmaceutical products on Concordia's financial
performance, the revenue-generating capabilities of Concordia's assets,
Concordia's financial strength, the ability of Concordia's products
and/or business divisions to generate a stable revenue stream for the
development of products and/or acquisition opportunities, the payment
of dividends in respect of Concordia's common shares, Concordia's
growth, the expansion into new indications for Concordia's existing
and/or future products, the acquisition of additional products
(including orphan drugs and legacy products), in-licencing additional
products, the distribution of additional products, the addition of new
sites approved to enroll patients into clinical trials, the ability to
obtain necessary approvals, the approval and development of PDT with
PHOTOFRIN® as a new treatment for certain forms of cancer, the ability
of PDT with PHOTOFRIN® to combat certain forms of cancer, enrollment of
patients into clinical trials, the outcomes and success of clinical
trials and other factors. Often, but not always, forward-looking
statements can be identified by the use of words such as "plans", "is
expected", "expects", "scheduled", "intends", "contemplates",
"anticipates", "believes", "proposes" or variations (including negative
and grammatical variations) of such words and phrases, or state that
certain actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Such statements are based on the
current expectations of Concordia's management, and are based on
assumptions and subject to risks and uncertainties. Although
Concordia's management believes that the assumptions underlying these
statements are reasonable, they may prove to be incorrect. The
forward-looking events and circumstances discussed in this release may
not occur by certain specified dates or at all and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting Concordia, including risks regarding clinical
trials and/or patient enrollment into clinical trials, risks relating
to the use of Concordia's products to treat certain diseases, the
pharmaceutical industry, the failure to obtain regulatory approvals,
risks associated with the acquisition of pharmaceutical products,
economic factors, market conditions, the equity markets generally,
risks associated with growth and competition and many other factors
beyond the control of Concordia. Although Concordia has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or
results to differ from those anticipated, estimated or intended. No
forward-looking statement can be guaranteed. Except as required by
applicable securities laws, forward-looking statements speak only as of
the date on which they are made and Concordia undertakes no obligation
to publicly update or revise any forward-looking statement, whether as
a result of new information, future events, or otherwise.
SOURCE Concordia Healthcare Corp.