Toronto Stock Exchange Symbol: DND
MISSISSAUGA, ON, Feb. 26, 2014 /CNW/ - Cipher Pharmaceuticals Inc. (TSX:
DND) today announced its financial and operational results for the
three and twelve months ended December 31, 2013.
Fiscal 2013 Highlights
Total revenue of $27.0 million, compared with $8.5 million in 2012
Q4 2013 revenue was a quarterly record $12.5 million, which included a
non-recurring, US$5 million milestone.
EBITDA1 of $20.0 million versus $3.8 million in 2012.
Net income in 2013 was $25.0 million, or $1.02 per basic share, compared
with net income of $2.5 million, or $0.10 per basic share, in 2012
Q4 2013 net income was $17.0 million, or $0.69 per basic share, which
included the recognition of a deferred tax asset of $6.6 million.
Cash balance increased to $24.2 million at year end, compared with $15.8
million at December 31, 2012. The US$5 million sales milestone was
received in Q1 2014 and is not included in the year-end cash balance.
Established commercial presence in Canada and launched Epuris®.
"Strong performance from Absorica, including a sales milestone we
achieved in the fourth quarter, helped drive significant revenue and
earnings growth in 2013," said Larry Andrews, President and CEO of
Cipher. "Our other products also made solid contributions in 2013 and
we built a commercial footprint in Canada to launch our first product -
Epuris - which has been well received by the Canadian dermatology
community. We are focused on using our growing cash balance to acquire
new products in specialist-driven markets, such as dermatology."
1 EBITDA - Non-IFRS Financial Measure: the term EBITDA (earnings before
interest, taxes, depreciation and amortization) does not have any
standardized meaning under International Financial Reporting Standards
("IFRS") and therefore may not be comparable to similar measures
presented by other companies. The Company defines EBITDA as earnings
before interest expense, income taxes, depreciation of property and
equipment, amortization of intangible assets and non-cash share-based
Total revenue for 2013 was $27.0 million, an increase of 219% compared
with $8.5 million in 2012. The year-over-year change mainly reflects
the strong performance of Absorica™ in its first full year on the market. Absorica™ contributed $21.2 million of revenue in 2013, compared with $2.6
million in 2012, reflecting strong product sales and the achievement of
a non-recurring, US$5.0 million milestone in the fourth quarter.
Revenue from Epuris® was $0.4 million in 2013, versus nil in 2012 as the product was
launched in June 2013. Revenue from Lipofen® was $3.4 million in 2013, compared with $4.6 million in 2012. Sales
performance for Lipofen® in 2013 was consistent with the prior year, however, results for 2012
included a US$1.0 million non-recurring milestone payment. Revenue from
the Company's extended release tramadol product (ConZip®/Durela®) was $2.0 million in 2013, compared with $1.3 million in 2012.
Research and Development expense decreased during 2013 to $1.4 million,
compared with $1.5 million in 2012. Selling, General and Administrative
("SG&A") expenses for 2013 were $6.2 million, compared with $3.5
million in 2012. The increase in SG&A primarily reflects the build out
of the Company's commercial organization in Canada to support the
launch of Epuris® and future products.
Net income in 2013 grew to $25.0 million, or $1.02 per basic share,
compared with $2.5 million, or $0.10 per basic share, in 2012. The
increase in net income reflects the strong growth in revenue, the
achievement of the one-time net sales milestone for Absorica™, and the recognition of a deferred tax asset of $6.6 million.
Excluding the impact of the milestone and the deferred tax asset, net
income would have been $13.1 million, or $0.53 per basic share.
In Q4 2013, Cipher recorded revenue of $12.5 million, compared with $2.9
million in Q4 2012. Net income for the three months ended December 31,
2013 was $17.0 million, or $0.69 per basic share, compared with net
income of $1.5 million, or $0.06 per basic share, in the same period
The Company's cash position increased at year end. As at December 31,
2013, Cipher had cash and cash equivalents of $24.2 million, compared
with $15.8 million at December 31, 2012. The Company's 50% share of the
US$10 million Absorica™ sales milestone was received in Q1 2014 and is therefore not reflected
in the Company's cash balance at year-end.
Absorica™ was released in the U.S. market in late November 2012. The product has
performed well to date, achieving 17.4%2 market share by December 2013, based on total isotretinoin
prescriptions. In Q4 2013, cumulative sales of Absorica™ reached a level which resulted in the achievement of a US$5 million
(net) milestone. The overall U.S. isotretinoin market also continues to
show growth, with prescriptions increasing by 15%3 in 2013 and by 14%4 in Q4 2013 over the comparable period in the prior year.
2 Source: IMS Health. Market share calculated based on total isotretinoin
3 Source: IMS Health
4 Source: IMS Health
In September 2013, Cipher's partner Ranbaxy received a Paragraph IV
Certification Notice of filing from Watson Laboratories Inc. of an
Abbreviated New Drug Application to the FDA for a generic version of
Absorica™. Ranbaxy and Cipher intend to vigorously defend Absorica's intellectual
property rights and pursue all available legal and regulatory pathways
in defense of the product. Cipher has been advised by Ranbaxy that
this development has no impact on current sales and marketing plans for
the product, and that Ranbaxy plans to continue to invest significantly
CIP-ISOTRETINOIN was approved by Health Canada in Q4 2012 under the
trade name Epuris® and launched by Cipher in June 2013. The Company has deployed a field
sales force of six full-time representatives and one part-time
representative. In the six-month period following launch of the
product, Epuris® has achieved market penetration of 5.5% and feedback from the Canadian
dermatology community has been very encouraging.
Cipher is actively pursuing marketing partners for CIP-ISOTRETINOIN in
other territories, including Latin America.
During 2013, Lipofen prescriptions decreased slightly (5%) but the
product maintained a market share of 1.5% of the total fibrate market.
Cipher's U.S. marketing partner for Lipofen® continues to promote the product in a second detail position.
ConZip®/Durela® (CIP-TRAMADOL ER)
Cipher's extended-release tramadol is marketed in the U.S. by Vertical
Pharmaceuticals under the trade name ConZip®. In Q1 2013, Vertical expanded its sales force from 60 to 75
representatives, which has contributed to modestly improved
performance. In Q4 2013, prescriptions grew 3% compared to Q4 2012. In
late Q4 2013, Avista Capital Partners, a US-based private equity firm,
acquired a controlling equity interest in Vertical with stated plans to
invest in additional selling resources while maintaining current
In Canada, Medical Futures launched the product in March 2012 under the
trade name Durela®, with a dedicated sales force comprising 22 representatives. Following
strong performance in Q3 2013, Durela continued to demonstrate steady
improvement, with a 38% growth in sales during Q4 2013 compared to the
In Q3 2012, Cipher obtained exclusive license and distribution rights in
Canada to market the Betesil® Patch, a novel, patent-protected, self-adhesive medicated plaster for
the treatment of inflammatory skin conditions such as plaque psoriasis.
The Company believes additional development work may be required prior
to a New Drug Submission to Health Canada. Cipher is currently
discussing the plans and parameters of this work with its partner,
Institut Biochimique SA.
In addition, Cipher plans to license in and/or acquire other products,
with an emphasis on late-stage to commercial-stage product candidates
in specialty markets for North America.
Notice of Conference Call
Cipher will hold a conference call today, February 26, 2014, 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 will be available through http://www.cipherpharma.com or http://bit.ly/1ezdlc7. An archived replay of the webcast will be available for 365 days.
About Cipher Pharmaceuticals Inc.
Cipher Pharmaceuticals (TSX: DND) is a growing specialty pharmaceutical
company with three commercial products and a fourth in development. Our
product candidates are typically improved formulations of successful,
currently marketed drugs. We in-license a product, manage the required
clinical development and regulatory approval process, and either
out-license it to a marketing partner, or, in Canada, we may market the
product ourselves. Our core capabilities are in clinical and regulatory
affairs, product licensing, supply chain management, and marketing and
sales. Since the Company was founded in 2000, we have achieved final
regulatory approval in the U.S. and Canada for all three of our
original products and completed six marketing partnerships, generating
growing licensing revenue.
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. These factors include, but are not
limited to; the applicability of patents and proprietary technology;
possible patent litigation; approval of products in the Company's
pipeline; marketing of products; meeting projected drug development
timelines and goals; product liability and insurance; dependence on
strategic partnerships and licensees; concentration of the Company's
revenue; substantial competition and rapid technological change in the
pharmaceutical industry; the ability to access capital; the ability to
attract and retain key personnel; changes in government regulation or
regulatory approval processes; dependence on contract research
organizations; third party reimbursement; the success of the Company's
strategic investments; the possibility of shareholder dilution; market
price volatility of securities; and the existence of significant
shareholders. 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
SOURCE Cipher Pharmaceuticals Inc.