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From the Wires
QLT announces third quarter results for 2008
By: PR Newswire
Oct. 28, 2008 07:30 AM
"This has been a very productive quarter for QLT," said In a separate matter, QLT's worldwide Visudyne licensee, Novartis, recently announced a restructuring of its U.S. commercial organization. As part of the restructuring, Novartis will no longer have a dedicated Ophthalmic sales force, however it will continue to support Visudyne in the U.S. with indirect sales methods. In the near term, we expect profitability to increase as a result of reduced selling and administrative expenses. 2008 Q3 FINANCIAL RESULTS Worldwide Product Sales As previously announced, global Visudyne sales for the third quarter were Worldwide Eligard sales in the third quarter were QLT Revenues For the third quarter, total revenue of QLT Expenses For the third quarter of 2008, expenditures for research and development (R&D) were Gains on Asset Divestments QLT reported gains on the three divestments that occurred during the third quarter. The gain on the sale of the building and land of Operating Income/Loss Operating income for the third quarter was Income from Discontinued Operations, Net of Income Taxes Income from discontinued operations, net of income taxes, was Earnings Per Share (EPS)/Loss Per Share QLT reported EPS of In the third quarter, non-GAAP EPS was Cash and Short-Term Investments The Company's consolidated cash balance at RECENT COMPANY HIGHLIGHTS * Released data from the Phase 2 CORE trial that is a study using QLT's punctal plug delivery technology in combination with Xalatan(R) and a conventional plug in patients with glaucoma or ocular hypertension. * Completed the previously disclosed agreement to sell the land and building comprising the Company's corporate headquarters and the adjacent undeveloped parcel of land in * Entered into an exclusive license agreement with Reckitt Benckiser Pharmaceuticals Inc. for Atrigel, a sustained-release drug delivery technology, except for certain rights being retained by QLT USA and its prior licensees. Under the terms of the license agreement and related asset purchase agreement, QLT USA received an aggregate upfront payment of * Initiated a Phase I safety study in healthy adults of QLT091001, an orally administered synthetic retinoid replacement therapy for 11-cis-retinal, which is a key biochemical component of the visual retinoid cycle. The drug is being developed under a Co-Development agreement with Retinagenix LLC for the potential treatment of Leber's Congenital Amaurosis (LCA), an inherited progressive retinal degenerative disease that leads to retinal dysfunction and visual impairment beginning at birth. Phase I data is expected to be reported in the first half of 2009. * Completed the redemption of UPCOMING EVENTS On
PA034 Enhancing Patient Compliance Using a Punctal Plug Delivery
System for Reduction of Elevated IOP in the Management of Glaucoma
Date and Time: Monday Nov 10, 08:42 AM - 08:50 AM
Location: Georgia World Congress Center,
Room: A411
On The Company expects to present six-month results from its RADICAL trial before year-end. The RADICAL trial is a Phase II, multicenter, randomized, single-masked study comparing reduced-fluence Visudyne-Lucentis combination therapies and Lucentis monotherapy in subjects with choroidal neovascularization (CNV) secondary to age-related macular degeneration (AMD). Conference call information QLT Inc. will hold an investor conference call to discuss third quarter 2008 results on 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.
QLT Inc.-Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In accordance with United States generally accepted accounting
principles)
(In thousands of United Three months ended Nine months ended
States dollars, except September 30, September 30,
per share information) 2008 2007 2008 2007
-------------------------------------------------------------------------
(Unaudited)
Revenues
Net product revenue $ 10,868 $ 14,606 $ 36,462 $ 54,170
Costs and expenses
Cost of sales 1,969 2,805 7,331 9,432
Accrued cost of sales
re: MEEI(1) 1,020 1,461 3,332 1,461
Research and development 6,887 9,081 23,049 26,236
Selling, general and
administrative 4,422 5,989 15,519 15,980
Depreciation 464 1,334 2,566 3,910
Litigation - 265 864 110,162
Gain on sale of long-
lived assets (21,289) - (21,289) -
Restructuring charge 349 174 9,439 668
-------------------------------------------------------------------------
(6,178) 21,109 40,811 167,849
-------------------------------------------------------------------------
Operating income (loss) 17,046 (6,503) (4,349) (113,679)
Investment and other
(expense) income
Net foreign exchange losses (296) (863) (58) (1,285)
Interest income 1,853 3,818 5,789 11,163
Interest expense (2,743) (2,735) (8,811) (5,965)
Other 26 3,165 288 4,429
-------------------------------------------------------------------------
(1,160) 3,385 (2,792) 8,342
-------------------------------------------------------------------------
Income (loss) from continuing
operations before income
taxes 15,886 (3,118) (7,141) (105,337)
(Provision) recovery of
income taxes (3,749) 1,316 (144) 36,233
-------------------------------------------------------------------------
Income (loss) from continuing
operations 12,137 (1,802) (7,285) (69,104)
-------------------------------------------------------------------------
Income from discontinued
operations, net of income
taxes 134,789 2,153 136,302 5,653
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net Income (loss) $ 146,926 $ 351 $ 129,017 $ (63,451)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic net income (loss) per
common share
Continuing operations $ 0.16 $ (0.02) $ (0.10) $ (0.92)
Discontinued operations 1.81 0.03 1.83 0.08
-------------------------------------------------------------------------
Net income (loss) $ 1.97 $ 0.00 $ 1.73 $ (0.85)
Diluted net income (loss) per
common share
Continuing operations $ 0.16 $ (0.02) $ (0.10) $ (0.92)
Discontinued operations 1.81 0.03 1.83 0.08
-------------------------------------------------------------------------
Net income (loss) $ 1.97 $ 0.00 $ 1.73 $ (0.85)
Weighted average number of
common shares outstanding
(in thousands)
Basic 74,620 74,618 74,620 75,003
Diluted 74,620 74,624 74,620 75,003
-------------------------------------------------------------------------
(1) Amount accrued on Visudyne sales since June 30, 2007 pursuant to
and pending outcome of appeal of the judgment rendered in the MEEI
litigation.
QLT Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In accordance with United States generally accepted accounting
principles)
September 30, December 31,
(In thousands of United States dollars) 2008 2007
-------------------------------------------------------------------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 155,945 $ 126,731
Restricted cash 123,964 123,495
Accounts receivable 29,834 25,257
Income taxes receivable 64,523 48,421
Inventories 12,433 18,511
Current portion of deferred income tax assets 11,843 19,392
Other 8,467 11,930
-------------------------------------------------------------------------
407,009 373,737
-------------------------------------------------------------------------
Property, plant and equipment 3,943 11,643
Assets held for sale 48 41,107
Deferred income tax assets 31,375 7,041
Goodwill 23,145 94,903
Mortgage receivable 11,276 -
Long-term inventories and other assets 23,640 20,556
-------------------------------------------------------------------------
$ 500,436 $ 548,987
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable $ 9,442 $ 8,486
Accrued restructuring charge 800 153
Accrued liabilities 131,509 123,294
Convertible debt - 172,500
Current portion of deferred revenue 7,459 8,431
Current portion of deferred income tax
liabilities - 11,291
-------------------------------------------------------------------------
149,210 324,155
Uncertain tax position liabilities 2,122 2,070
Deferred revenue 1,837 2,939
-------------------------------------------------------------------------
153,169 329,164
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common shares 702,221 702,221
Additional paid in capital 122,676 119,779
Accumulated deficit (585,438) (714,455)
Accumulated other comprehensive income 107,808 112,278
-------------------------------------------------------------------------
347,267 219,823
-------------------------------------------------------------------------
$ 500,436 $ 548,987
-------------------------------------------------------------------------
-------------------------------------------------------------------------
As at September 30, 2008, there were 74,620,328 issued and outstanding
common shares and 6,064,688 outstanding stock options.
QLT Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
2008 Third Quarter Reconciliation of GAAP Earnings
to Adjusted Non-GAAP Earnings Exhibit 1
-------------------------------------------------------------------------
Three months
Three months ended
(In millions of United ended September 30,
States dollars, except September 30, 2008
per share information) 2008 GAAP Adjustments Non-GAAP(1)
-------------------------------------------------------------------------
(Unaudited)
Revenues
Net product revenue $ 10.9 $ - $ 10.9
Cost and expenses
Cost of sales (2.0) 0.0 (a) (2.0)
Accrued cost of sales re: MEEI (1.0) 1.0 (b) -
Research and development (6.9) 0.2 (a) (6.7)
Selling, general and administrative (4.4) 0.5 (a) (3.9)
Depreciation (0.5) - (0.5)
Litigation - - -
Gain on sale of long-lived assets 21.3 (21.3)(c) -
Restructuring (0.3) 0.3 (d) -
-------------------------------------------------------------------------
6.2 (19.2) (13.0)
-------------------------------------------------------------------------
Operating income (loss) 17.0 (19.2) (2.2)
Investment and other (expense)
income
Net foreign exchange losses (0.3) - (0.3)
Interest income 1.9 - 1.9
Interest expense (2.7) 1.5 (b) (1.2)
Other 0.0 - 0.0
-------------------------------------------------------------------------
(1.2) 1.5 0.4
-------------------------------------------------------------------------
Income (loss) from continuing
operations before income taxes 15.9 (17.7) (1.8)
Provision for income taxes (3.7) 3.7 (e) (0.0)
-------------------------------------------------------------------------
Income (loss) from continuing
operations 12.1 (14.0) (1.8)
-------------------------------------------------------------------------
Income from discontinued
operations, net of income taxes 134.8 (129.3)(a)(d) 5.4
(f)(g)
-------------------------------------------------------------------------
Net income $ 146.9 $(143.3) $ 3.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic net income per common
share:
Continuing operations $ 0.16 $ (0.02)
Discontinued operations 1.81 0.07
-------------------------------------------------------------------------
Net income $ 1.97 $ 0.05
Diluted net income per common
share:
Continuing operations $ 0.16 $ (0.02)
Discontinued operations 1.81 0.07
-------------------------------------------------------------------------
Net income $ 1.97 $ 0.05
Weighted average number of common
shares outstanding (in millions)
Basic 74.6 74.6
Diluted 74.6 74.6
Adjustments:
------------
(a) Remove stock based compensation.
(b) Remove accrued cost of sales re: MEEI and related interest expense.
(c) Remove gain on sale of long-lived assets.
(d) Remove restructuring charge.
(e) Remove income tax impact of the above adjustments.
(f) Remove gain on sale of assets, net of tax.
(g) Remove recognition of tax asset related to reversal of valuation
allowance.
(1) The adjusted non-GAAP financial measures have no standardized meaning
under GAAP and are not comparable between companies. Management
believes that the adjusted non-GAAP financial measures are useful for
the purpose of financial analysis. Management uses these measures
internally to evaluate the Company's operating performance before
items that are considered by management to be outside of the
Company's core operating results.
QLT Inc.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
----------------------------------------------
2008 Third Quarter Reconciliation of GAAP Earnings
to Adjusted Non-GAAP Earnings Exhibit 2
-------------------------------------------------------------------------
Nine months
Nine months ended
(In millions of United ended September 30,
States dollars, except September 30, 2008
per share information) 2008 GAAP Adjustments Non-GAAP(1)
-------------------------------------------------------------------------
(Unaudited)
Revenues
Net product revenue $ 36.5 $ (0.4)(a) $ 36.0
Cost and expenses
Cost of sales (7.3) 0.9 (a)(b) (6.4)
Accrued cost of sales re: MEEI (3.3) 3.3 (c) -
Research and development (23.0) 0.8 (b) (22.2)
Selling, general and
administrative (15.5) 1.3 (b) (14.2)
Depreciation (2.6) 0.2 (d) (2.4)
Litigation (0.9) 0.9 (e) -
Gain on sale of long-lived assets 21.3 (21.3)(f) -
Restructuring (9.4) 9.4 (g) -
-------------------------------------------------------------------------
(40.8) (4.5) (45.3)
-------------------------------------------------------------------------
Operating loss (4.3) (4.9) (9.2)
Investment and other (expense)
income
Net foreign exchange gains (0.1) - (0.1)
Interest income 5.8 - 5.8
Interest expense (8.8) 4.3 (c) (4.5)
Other 0.3 - 0.3
-------------------------------------------------------------------------
(2.8) 4.3 1.5
-------------------------------------------------------------------------
Loss from continuing operations
before income taxes (7.1) (0.6) (7.7)
Provision for income taxes (0.1) (1.1)(h) (1.3)
-------------------------------------------------------------------------
Loss from continuing operations (7.3) (1.7) (9.0)
-------------------------------------------------------------------------
Income from discontinued operations,
net of income taxes 136.3 (125.1)(a)(b) 11.2
(g)(i)
(j)
-------------------------------------------------------------------------
Net income $ 129.0 $(126.8) $ 2.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic net income per common share:
Continuing operations $ (0.10) $ (0.12)
Discontinued operations 1.83 0.15
-------------------------------------------------------------------------
Net income $ 1.73 $ 0.03
Diluted net income per common
share:
Continuing operations $ (0.10) $ (0.12)
Discontinued operations 1.83 0.15
-------------------------------------------------------------------------
Net income $ 1.73 $ 0.03
Weighted average number of common
shares outstanding (in millions)
Basic 74.6 74.6
Diluted 74.6 74.6
Adjustments:
------------
(a) Remove inventory write-down.
(b) Remove stock based compensation.
(c) Remove accrued cost of sales re: MEEI and related interest expense.
(d) Remove impairment of fixed assets.
(e) Remove litigation expense.
(f) Remove gain on sale of long-lived assets.
(g) Remove restructuring charge.
(h) Remove income tax impact of the above adjustments.
(i) Remove gain on sale of assets, net of tax.
(j) Remove recognition of tax asset related to reversal of valuation
allowance.
(1) The adjusted non-GAAP financial measures have no standardized meaning
under GAAP and are not comparable between companies. Management
believes that the adjusted non-GAAP financial measures are useful for
the purpose of financial analysis. Management uses these measures
internally to evaluate the Company's operating performance before
items that are considered by management to be outside of the
Company's core operating results.
QLT Plug Delivery, Inc. is a wholly-owned subsidiary of QLT Inc.
Atrigel is a registered trademark of QLT USA, Inc.
Visudyne is a registered trademark of Novartis AG.
Eligard is a registered trademark of Sanofi-aventis.
Aczone is a registered trademark of Allergan Sales, LLC.
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." 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. 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 plans to divest certain of our assets; our expectations for timing to receive data from our CORE study and our Visudyne RADICAL study; our expectation in the near term of increased profitability from Visudyne sales as a result of reduced selling and administration expenses; 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; our ability to successfully complete the sale of one or more of our assets or operations at an acceptable price and the time period necessary to complete such sales are uncertain; 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. SOURCE QLT Inc.
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