VANCOUVER, April 28 /PRNewswire-FirstCall/ - QLT Inc. ("QLT" or the "Company") today reported financial results for the first quarter ended March 31, 2009. Unless specified otherwise, all amounts are in U.S. dollars and in accordance with U.S. GAAP.
"We are pleased to report another quarter of profitability, driven by our revenue streams from Visudyne(R) and Eligard(R)," said Bob Butchofsky, President and Chief Executive Officer of QLT. "Our main driver this year however, continues to be our ophthalmology-focused clinical programs and we look forward to sharing the results from our on-going Phase II punctal plug program in the third quarter. In addition, in the second quarter we are anticipating 12-month results from our RADICAL Visudyne combination study and the Novartis-sponsored MONTBLANC Visudyne combination study, which could help drive Visudyne usage."
Visudyne sales for the first quarter were $27.8 million, a decrease of 23.9% from sales in the first quarter of 2008. Sales in the U.S. were $8.7 million, down 6.1% from the prior-year first quarter, while sales outside the U.S. were $19.0 million, down 30.0% from the prior year. The drop in Visudyne sales was primarily due to the approval and reimbursement in Europe of alternative therapeutics for age-related macular degeneration.
Worldwide Eligard sales in the first quarter were $58.6 million, an increase of 16.4% over the first quarter of 2008. U.S. sales of $21.1 million were up 8.2% from last year's first quarter, while sales outside the U.S. increased 21.5% to $37.4 million.
QLT Revenues
For the first quarter, total revenue of $30.1 million was up 12.7% from the first quarter of 2008 due to the increase in revenue related to Eligard. Revenue from Visudyne was $11.8 million in the quarter, down only 1.1% from the prior-year first quarter despite the 23.9% drop in Visudyne sales, as QLT's share of profit from Visudyne sales was 30.3% compared to 21.5% a year ago. The increase in profitability resulted because the reduction in Visudyne marketing and distribution expenses was greater than the drop in top-line product sales. Revenue related to Eligard (royalty and product revenue combined) was $17.9 million, up 24.5% from the first quarter of 2008.
QLT Expenses
For the first quarter of 2009, Research and Development (R&D) expense was $5.9 million compared to $8.0 million in the same period of 2008, while Selling General and Administrative (SG&A) expense was $5.2 million, down from $7.2 million last year. Combined, spending of $11.1 million was down 27.1% from last year as operating savings realized from the restructuring and streamlining efforts initiated in the first quarter of 2008 more than offset higher spending related to our punctal plug program.
Operating Income/Loss
Operating income for the first quarter was $5.5 million, compared to an operating loss of $8.9 million in the prior-year first quarter. Last year's first quarter loss was driven by a $7.6 million restructuring charge. Excluding that charge, there was still a significant improvement in operating income year-over-year, driven by lower operating expenses and higher revenue related to Eligard.
Earnings Per Share (EPS)/Loss Per Share
EPS of $0.02 in the first quarter compared to a loss per share of $0.14 in the prior-year quarter. The improvement was driven by the restructuring charge in last year's loss, as well as lower operating expenses and higher revenue related to Eligard in the first quarter this year. The effective tax rate for the quarter was high, and is expected to remain high throughout the year, since we are providing a valuation allowance against the tax benefit of punctal plug development expenditures. The effective tax rate also includes a provision for income taxes on the earnings of our QLT USA subsidiary, even though on a cash basis loss carryforwards are expected to be available to offset a portion of its taxable income.
In the first quarter, non-GAAP EPS was $0.02, as licensing and milestone revenue, stock compensation expense, litigation charges, a restructuring adjustment, and interest income related to a tax refund were backed out of GAAP EPS. The full reconciliation of GAAP to non-GAAP EPS for the first quarter is provided in Exhibit 1.
Cash and Short-Term Investments
The Company's consolidated cash balance at March 31, 2009 consisted of $130.1 million of cash and cash equivalents and $124.8 million of restricted cash. The restricted cash balance related to the bond posted to stay the execution of the July 17, 2007 judgment in the Massachusetts Eye and Ear Infirmary ("MEEI") litigation. Subsequent to quarter-end, we completed payment of the judgment liability to MEEI, totaling $127.1 million, which was funded from restricted cash plus $2.2 million of cash and cash equivalents.
QLT Inc. will hold an investor conference call to discuss first quarter 2009 results on Tuesday, April 28, 2009 at 8:30 a.m. ET (5:30 a.m. PT). The call will be broadcast live via the Internet at www.qltinc.com. To participate on the call, please dial 1-800-319-4610 (North America) or 604-638-5340 (International) before 8:30 a.m. ET. A replay of the call will be available via the Internet and also via telephone at 1-800-319-6413 (North America) or 604-638-9010 (International), access code 7157, followed by the "number" sign.
About QLT
QLT Inc. is a global biopharmaceutical company dedicated to the discovery, development and commercialization of innovative therapies. Our research and development efforts are focused on pharmaceutical products in the field of ophthalmology. In addition, we utilize three unique technology platforms, photodynamic therapy, Atrigel(R) and punctal plugs with drugs, to create products such as Visudyne(R) and Eligard(R) and future product opportunities. For more information, visit our web site at www.qltinc.com.
A full explanation of how QLT determines and recognizes revenue resulting from Visudyne sales is contained in the financial statements contained in the periodic reports on Forms 10-Q and 10-K, under the heading "Significant Accounting Policies - Revenue Recognition." Visudyne sales are product sales by Novartis under its agreement with QLT.
QLT Inc. is listed on The NASDAQ Stock Market under the trading symbol "QLTI" and on The Toronto Stock Exchange under the trading symbol "QLT."
Certain statements in this press release constitute "forward looking statements" of QLT within the meaning of the Private Securities Litigation Reform Act of 1995 and constitute "forward looking information" within the meaning of applicable Canadian securities laws. Forward looking statements include, but are not limited to: our expectations for the development of our punctal plug platform; our expectations for timing to receive results from our on-going Phase II punctal plug study; our expectations for timing to receive results relating to our Visudyne RADICAL combination study and the Novartis sponsored MONTBLANC Visudyne combination study; our expectation that positive data from the combination studies could help drive Visudyne sales; and statements which contain language such as: "assuming," "prospects," "future," "projects," "believes," "expects" and "outlook." Forward-looking statements are predictions only which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: the Company's future operating results are uncertain and likely to fluctuate; uncertainties relating to the timing and results of the clinical development and commercialization of our products and technologies (including Visudyne and our punctal plug technology) and the associated costs of these programs; the timing, expense and uncertainty associated with the regulatory approval process for products; uncertainties regarding the impact of competitive products and pricing; risks and uncertainties associated with the safety and effectiveness of our technology; risks and uncertainties related to the scope, validity, and enforceability of our intellectual property rights and the impact of patents and other intellectual property of third parties; and general economic conditions and other factors described in detail in QLT's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities. Forward looking statements are based on the current expectations of QLT and QLT does not assume any obligation to update such information to reflect later events or developments except as required by law.
CONTACT: QLT Inc. Media Contact: Vancouver, Canada, Karen Peterson,
Telephone: (604) 707-7000 or 1-800-663-5486, Fax: (604) 707-7001; The Trout
Group Investor Relations Contact: New York, USA, Christine Yang, Telephone:
(646) 378-2929; or Marcy Strickler, Telephone: (646) 378-2927
