Concordia Kills Phase III Trial, Terminates Contract Sales, and Leaves Nasdaq Biotech Index

December 19, 2016
By Mark Terry, BioSpace.com Breaking News Staff

Oakville, Ontario-based Concordia International Corp. announced a number of changes today. First off was that it had paid the first installment of its earn-out to Cinvent1 related to its acquisition of Amdipharm Mercury Limited in October 2015.

Concordia acquired Amdipharm Mercury from Cinven1 for about $3.5 billion, which was to be paid through a combination of cash, common shares of Concordia, and performance-based earn-out payable in cash. Today’s payment was 72 million pounds and paid in cash. This leaves Concordia with another $410 million (US) due.

Concordia has also decided to terminate its Phase III clinical trial of Phododynamic Therapy (PDT) with Photofrin to treat cholangiocarcinoma, a rare cancer. PTD with Photofrin is marketed for a number of cancers, including esophageal cancer, high-grade dysplasia in Barrett’s esophagus and non-small cell lung cancer.

The company decided to end the trial because of the difficulties in getting enough patients enrolled. It indicates that the company still felt confident in its potential as a commercial product.

In addition, Concordia terminated its contract sales team that was promoting Donnatal, for irritable bowel syndrome. This was to reduce expenses, because after evaluation, the company decided that the expenses were not matching the outcomes and expectations. It still values the product, but wants to look at more cost-effective marketing strategies, including co-promotion deals.

And finally, Concordia is being removed from the Nasdaq Biotech Index (NBI) effective today. The company stated, “On an annual basis, Nasdaq re-ranks the NBI based on market capitalization parameters that Concordia currently does not meet.”

“A few weeks into my new role as CEO, and having met the majority of our employers, key shareholders and debtholders, I am looking forward to working with our senior management team and board of directors to chart a path forward that will help us rebuild value for all stakeholders,” said Allan Oberman, Concordia’s chief executive officer, in a statement. “This plan will focus on management’s key priorities for the Company, which include operational excellence, portfolio expansion, financial management and stakeholder outreach. We are working to execute on each of these priorities, and in furtherance of our focus on operational excellence, we have recently implemented the termination of the Company’s phase III trial for Photodynamic Therapy with Photofrin and the elimination of the Company’s contract sales force in the first phase of this plan. We look forward to providing a progress update during our regular year-end reporting, anticipated in March 2017.”

Much of this is undoubtedly due to its third-quarter financial results. Although the company reported an increase in third-quarter revenue of $185.5 million, an increase of 99.5 percent from the same quarter in 2015, it was a drop of 19.9 percent from the second quarter of this year. Its GAAP net loss from continuing operations was $75.1 million and GAAP loss per share of $1.47.

Still, it’s a very active company. Its International segment launched 24 new products since October 21, 2015, and plans to hit a total of 60 launches by the end of 2018.

In its third-quarter report, it stated, “Concordia’s International segment, on a constant currency basis, delivered consistent results in the third quarter compared to the second quarter of 2016. In addition, the International segment remains on track to meet or exceed our target of 60 new product launches by the fourth quarter of 2018. The Company continues to assess the competitive environment affecting the North America and International segments, and is implementing actions to manage these challenges. Due to recent pressures from generic competition on Plaquenil and Nilandron, as well as increased pressure on Donnatel from competition in the category and what we consider to be an illegal commercial product, we have experienced variability in forecasting the North American business.”