Cipher Pharmaceuticals Reports Fiscal 2010 Financial Results
Published: Mar 09, 2011
Fiscal 2010 Summary
- Net revenue increased 70% to $5.4 million versus $3.2 million in 2009.
- Total royalties from Lipofen® increased 64% over 2009.
- Recorded positive annual net income for the first time in the Company's history.
- Strong balance sheet at year end with cash of $10.3 million and no debt.
- Received final FDA approval of CIP-TRAMADOL ER.
- Received Patent Notice of Allowance for CIP-TRAMADOL ER from the U.S. Patent and Trademark Office and Canadian Intellectual Property Office.
- Completed patient enrolment in CIP-ISOTRETINOIN Phase III safety trial.
"Increased royalties from Lipofen® helped drive a substantial increase in revenue this year, enabling the Company to achieve profitability and strengthen our cash balance," said Larry Andrews, President and CEO of Cipher. "The year was also highlighted by important product milestones, including final FDA approval on our extended-release tramadol and excellent progress with our pivotal Phase III safety study for CIP-ISOTRETINOIN - the largest, most comprehensive trial conducted on isotretinoin. We expect to disclose top-line data in early Q3 2011 followed by an FDA submission in Q4 2011. Among other milestones, we are also working to finalize a U.S. partnership for CIP-TRAMADOL ER and commercialize that product, adding another revenue stream to support our growth plans."
Net revenue in 2010 was $5.4 million, compared with $3.2 million in 2009, mainly reflecting increased royalty and milestone revenues from Lipofen®. Revenue from Lipofen® totalled $5.0 million, an increase of $2.1 million over 2009. The increase was primarily a result of higher Lipofen® royalty revenues and a US$1 million milestone in Q2 2010 for the achievement of a cumulative net sales milestone. Revenue from CIP-ISOTRETINOIN was $0.4 million in 2010, which relates to revenue recognized on Cipher's share of the three milestone payments received from its U.S. marketing and distribution partner.
Gross Research and Development ("R&D") expenditures for 2010 were $12.8 million, compared with $5.4 million in 2009. The reported R&D expense of $0.7 million, which does not include the reimbursement of $11.8 million from Cipher's U.S. partner related to the CIP-ISOTRETINOIN Phase III clinical study, decreased by $0.2 million compared to 2009, reflecting the advanced stage of development of the Company's current products.
Operating, General and Administrative ("OG&A") expenses for 2010 were $3.9 million, compared with $4.3 million in 2009. Net income for the 12 months ended December 31, 2010 increased to $0.1 million ($0.00 per share), compared with a net loss of $2.7 million ($0.11 per share) in 2009.
In Q4 2010, Cipher recorded licensing revenue of $1.2 million, compared with $0.8 million in Q4 2009. Gross R&D expenditures during Q4 2010 were $2.3 million, which represents a decrease of $0.7 million compared to Q4 2009. The reported amount of R&D expense of $0.0 million for Q4 2010 is net of $2.3 million of reimbursed R&D costs related to the CIP-ISOTRETINOIN Phase III clinical study. OG&A expenses for Q4 2010 were $0.9 million, compared with $1.1 million in the same period last year. Net income for the three months ended December 31, 2010 was $0.1 million or ($0.00 per share), compared with a loss of $0.6 million ($0.03 per share) in the same period last year.
The Company's financial position remained solid at year-end. As at December 31, 2010, Cipher had cash of $10.3 million, compared with $9.0 million as at December 31, 2009.
During 2010, Cipher saw steady growth in royalty revenue from Lipofen® as Kowa continued its penetration of primary care physicians in its targeted regions and expanded its sales force to approximately 250. Total royalties from Lipofen® increased 64% over 2009. In addition, a cumulative net sales milestone was achieved in 2010 resulting in a US$1 million payment to Cipher.
During Q4 2010, Cipher completed patient enrolment in a Phase III safety trial for CIP-ISOTRETINOIN. The study is a double-blind, randomized trial comparing CIP-ISOTRETINOIN to an FDA-approved, commercially available isotretinoin product. A total of 934 patients were enrolled and 61 patients are still in the process of completing the study, which the Company expects will occur in early Q2 2011. A trial-related milestone achieved in Q4 2010 resulted in the receipt of a US$1 million payment from the Company's U.S. partner. Cipher expects to publish top-line results in early Q3 2011 and complete its FDA submission in Q4 2011. The FDA review is expected to take six months.
Cipher received FDA approval for CIP-TRAMADOL ER, the Company's extended-release formulation of tramadol, in Q2 2010. In Q3 2010, Cipher received Patent Notice of Allowances for CIP-TRAMADOL ER from the U.S. Patent and Trademark Office and Canadian Intellectual Property Office. Cipher is currently preparing for the U.S. commercial launch of CIP-TRAMADOL ER, which includes securing a marketing partner and finalizing commercial manufacturing requirements.
Notice of Conference Call
Cipher will hold a conference call today, March 9, 2011, 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 is a commercial-stage drug development company focused on commercializing novel formulations of successful, currently marketed molecules using advanced drug delivery technologies. Cipher's strategy is to in-license products that incorporate proven drug delivery technologies and advance them through the clinical development and regulatory approval stages, after which the products are out-licensed to international partners. Because Cipher's products are based on proven technology platforms applied to currently marketed drugs, they are expected to have lower approval risk, shorter development timelines and significantly lower development costs. The Company's lead compound is being marketed in the United States by Kowa Pharmaceuticals America under the label Lipofen®. Cipher's second product, an extended-release version of the pain reliever tramadol, received FDA approval in May 2010 and the Company's third product, a novel formulation of the acne treatment isotretinoin, is in its final Phase III safety study.
Cipher is listed on the Toronto Stock Exchange under the symbol 'DND' and has approximately 24 million shares outstanding. 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, such as the applicability of patents and proprietary technology; possible patent litigation; regulatory approval of products in the Company's pipeline; changes in government regulation or regulatory approval processes; government and third-party payer reimbursement; dependence on strategic partnerships for product candidates and technologies, marketing and R&D services; meeting projected drug development timelines and goals; intensifying competition; rapid technological change in the pharmaceutical industry; anticipated future losses; the ability to access capital to fund R&D and the ability to attract and retain key personnel. 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.