QLT Inc. Swings to Loss, Cuts Visudyne Sales Outlook
VANCOUVER, British Columbia, Nov 3, 2010 (GlobeNewswire via COMTEX) -- QLT Inc. /quotes/comstock/15*!qlti/quotes/nls/qlti (QLTI 5.67, -0.10, -1.73%) /quotes/comstock/11t!e:qlt (CA:QLT 5.69, 0.00, 0.00%) ("QLT" or the "Company") today reported financial results for the third quarter ended September 30, 2010. Unless specified otherwise, all amounts are in U.S. dollars and in accordance with U.S. GAAP. "We are very pleased to have recently announced the expansion of our Phase 1b trial of QLT091001 into patients with Retinitis Pigmentosa," said Bob Butchofsky, President and Chief Executive Officer of QLT. "We also are pleased to have initiated two important clinical trials in our punctal plug drug delivery platform, a Phase II study of latanoprost for patients with glaucoma, and a Phase II proof-of-concept study with olopatadine for patients with ocular allergies. We expect to announce data from both of these studies in the first half of 2011." 2010 THIRD QUARTER FINANCIAL RESULTS Worldwide Visudyne(R) Product Sales Visudyne sales for the third quarter were $20.5 million, a decrease of 12.9% from the third quarter of 2009. Sales in the U.S. were $5.2 million, down 15.4% from the prior-year third quarter, while sales outside the U.S. were $15.2 million, down 12.0% from the prior year. QLT Revenues For the third quarter, total revenue of $8.6 million was down 2.3% from the third quarter of 2009 primarily due to the 12.9% drop in Visudyne product sales. However, the percentage decline in revenue was less than the percentage decline in Visudyne product sales due to the amendment of our Visudyne agreement with Novartis, which results in QLT booking higher revenue per dollar of product sales than under the previous arrangement. QLT Expenses / Other Income For the third quarter of 2010, Research and Development (R&D) expense was $8.1 million, up 9.8% from $7.4 million in the same period of 2009. The change occurred primarily because increased spending on QLT091001 was only partially offset by reduced spending on punctal plugs and Visudyne. For the third quarter of 2010, Selling, General and Administrative (SG&A) expense was $5.4 million, up from $4.5 million last year primarily due to infrastructure and promotional spending associated with U.S. Visudyne sales. Investment and Other Income of $6.2 million included a $5.2 million gain for the Fair Value Change in Contingent Consideration. This gain occurred primarily because the Contingent Consideration asset is recorded as the present value of expected future payments, and therefore as each quarter elapses, even if no changes are made to the underlying Eligard(R) forecast, we will book a gain related to the time value of money as we move one quarter closer to realizing the full face value of the asset. Also in the third quarter there was additional gain in the Fair Value Change in Contingent Consideration due to a reduction in the discount rate used to estimate the present value of the expected future payments and an improvement in the underlying Eligard sales forecast. Operating Loss The operating loss for the third quarter was $7.0 million, compared to a loss of $6.0 million in the prior-year third quarter. The loss was greater primarily because of the increase in R&D and SG&A expense compared to the prior-year quarter. Earnings Per Share (EPS) / Loss Per Share, Adjusted EBITDA GAAP loss per share of $0.01 in the third quarter compared to GAAP EPS of $0.16 in the prior-year quarter. The decline occurred primarily because the 2009 third quarter results included $6.7 million of Income from Discontinued Operations related to QLT USA, Inc. and its Eligard product line, while the current year third quarter had no Income from Discontinued Operations (QLT USA and Eligard were divested on October 1, 2009). Also, the 2009 third quarter benefited from $7.5 million of foreign exchange gains, primarily related to intercompany debt, compared to just $0.4 million of foreign exchange gains in the 2010 third quarter. In the third quarter, non-GAAP EPS was $0.09. The items that were excluded in the determination of non-GAAP EPS were (i) stock compensation expense, (ii) interest income related to the Note Receivable from the QLT USA divestment, and (iii) the Fair Value Change in Contingent Consideration. We also added back (within Income from Discontinued Operations) $9.2 million of Contingent Consideration earned based on Eligard sales during the third quarter.