(All figures are presented in U.S. dollars)
- EPS increased YoY by $0.08 to
$0.11 in the third quarter;
- Strengthened balance sheet and demonstrated continued
positive cash flow, ending Q3 with $27.5
million in cash and Adjusted EBITDA2 increased
19% to $2.6 million;
- EBITDA2 increased 67% to
$2.5 million.
MISSISSAUGA, ON, Nov. 10,
2022 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: CPH)
("Cipher" or "the Company") today announced its
financial and operating results for the three and nine month
periods ended September 30, 2022. Unless otherwise noted,
all figures are in U.S. dollars.
Q3 2022 Financial Highlights
(All figures in U.S.
dollars, compared to Q3 2021, unless otherwise noted)
- Net income in the quarter increased by $1.9 million to $2.7
million
- EBITDA2 increased 67% to $2.5
million in Q3 2022
- As at September 30, 2022, the
Company had $27.5 million in cash or
$1.09 per share
- Repurchased and cancelled $0.3
million under the Normal Course Issuer Bid at an average
price of $2.49 Canadian dollars
Management Commentary
Craig Mull, Interim CEO
commented, "Cipher's third quarter results demonstrated growth
across revenue, EPS and Adjusted EBITDA over the prior year,
highlighting the continued strength of our cash flows and the
resilient nature of our business. Cipher has benefitted from the
impacts of its cost reduction plan, enhanced sales and distribution
agreements, key leadership appointments and the strength of our
isotretinoin portfolio. These factors have combined to drive a
meaningful increase in profitability in the third quarter,
underlined by a 252% increase in earnings per share."
In August, Cipher bolstered its management team with the
appointment of senior financial executive Bryan Jacobs as Chief Financial Officer.
Bryan Jacobs, CFO
commented, "I am delighted to join the Cipher team. My
commitment is simple, to support the continued and demonstrated
profitability of Cipher, as well as a focus on growing the
business. In Q3, we continued to enhance our liquidity, ending the
quarter with a cash balance of $27.5
million, placing us in an excellent position to drive
organic growth and fund our development pipeline as well as
evaluate profitable product and company acquisitions to accelerate
growth and drive shareholder value."
Q3 2022 Financial Review
(All figures are in U.S.
dollars)
- Total revenue increased 6.2% to $4.8
million for Q3 2022, compared to $4.5
million for Q3 2021.
- Licensing revenue was $2.0
million for the three months ended September 30, 2022, compared to $2.0 million for the three months ended
September 30, 2021.
- Product revenue increased by $0.3
million or 12% to $2.8 million
for Q3 2022, compared to $2.5 million
for the comparable period in 2021. Product revenue from Epuris was
$2.4 million for Q3 2022, up from
$2.3 million in the comparative
period. Epuris experiences seasonality with a lower level of
quarterly sales in Q3 annually.
- Net income was $2.7 million, or
$0.10 per diluted share, in Q3 2022,
compared to $0.8 million, or
$0.03 per diluted share, in Q3 2021.
Adjusted EBITDA for Q3 2022 was $2.6
million, compared to $2.2
million in Q3 2021.
- The Company had $27.5 million in
cash and no debt at September 30,
2022. The Company generated $9.1
million in cash from operating activities for the nine
months ended September 30, 2022.
Outlook
Cipher believes it has a strong outlook in the remainder of 2022
and beyond that will continue to enhance long term shareholder
value, including:
- In September 2022, the Company's
partner, Canfite Biopharma, ("Canfite") announced information
related to its phase III COMFORT study of Piclidenoson used in the
treatment of moderate to severe psoriasis met its primary endpoint
of superiority and achieved a better tolerability profile in a
comparative analysis. An estimated 1 million Canadians suffer from
psoriasis and Cipher holds the Canadian marketing rights to this
novel product, which the Company believes holds substantial
commercial potential.
- Continue to collaborate with our partner Moberg Pharma on its
phase III clinical trial in the U.S. for MOB-015, which started in
May 2022, a novel product for the
treatment of foot fungus, and whereby Cipher has the exclusive
Canadian market rights
- Actively progressing and supporting proof-of-concept studies
for our DTR-001 topical product treatment for the removal of
tattoos
- Reinforced commitment to our hospital business with a
distribution partnership and supporting physician research
activities that is expected to result in improved growth and
profitability
- Selectively repurchase shares for cancellation under normal
course issuer bid
- Pursue product and business acquisitions in a prudent manner
with a focus on high growth potential and near-term
profitability
Financial Statements and MD&A
Cipher's Financial Statements for the three and nine months
ended September 30, 2022, and Management's Discussion and
Analysis (the "MD&A") for the three and nine months
ended September 30, 2022, are available on the Company's
website at www.cipherpharma.com in the "Investors"
section under "Financial Reports" and on SEDAR
at www.sedar.com.
Notice of Conference Call
Cipher will hold a conference call on November 11, 2022,
at 8:30 a.m. (ET) to discuss its financial results and
other corporate developments.
- To access the conference call by telephone, dial (416) 764-8650
or (888) 664-6383 and use conference 59484713
A live audio webcast will be available at
https://app.webinar.net/ApnV68m4x1k
- or the Investor Relations section of the Company's website at
http://www.cipherpharma.com.
- An archived replay of the webcast will be available until
November 18, 2022.
About Cipher Pharmaceuticals Inc.
Cipher Pharmaceuticals (TSX: CPH) is a specialty pharmaceutical
company with a robust and diversified portfolio of commercial and
early to late-stage products. Cipher acquires products that fulfill
unmet medical needs, manages the required clinical development and
regulatory approval process, and currently markets those products
either directly in Canada or indirectly through partners
in Canada, the U.S., and South America. For more
information, visit www.cipherpharma.com.
Forward-Looking Statements and Non-IFRS Measures
This document includes forward-looking statements within the
meaning of applicable securities laws. These forward-looking
statements include, among others, statements with respect to the
impact of the Company's cost reduction plan, the potential for
improved profitability of our hospital business, increased adoption
of ABSORICA LD, discussions with Galephar regarding new product
opportunities, the impact of the partnership with Verity on the
Company's ability to manage its costs efficiently and drive
profitability within its hospital business, our objectives and
goals and strategies to achieve those objectives and goals, as well
as statements with respect to our beliefs, plans, expectations,
anticipations, estimates and intentions. 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.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, which
give rise to the possibility that predictions, forecasts,
projections and other forward-looking statements will not be
achieved. 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. We
caution readers not to place undue reliance on these statements as
a number of important factors, many of which are beyond our
control, could cause our actual results to differ materially from
the beliefs, plans, objectives, expectations, anticipations,
estimates and intentions expressed in such forward-looking
statements. These factors include, but are not limited to, the
extent and impact of the coronavirus (COVID-19) outbreak on our
business including any impact on our contract manufacturers and
other third party service providers, our ability to enter into
development, manufacturing and marketing and distribution
agreements with other pharmaceutical companies and keep such
agreements in effect; our dependency on a limited number of
products; our dependency on protection from patents that will
expire; integration difficulties and other risks if we acquire or
in-license technologies or product candidates; reliance on third
parties for the marketing of certain products; the product approval
process is highly unpredictable; the timing of completion of
clinical trials, regulatory submissions and regulatory approvals;
reliance on third parties to manufacture our products and events
outside of our control that could adversely impact the ability of
our manufacturing partners to supply products to meet our demands;
we may be subject to future product liability claims; unexpected
product safety or efficacy concerns may arise; we generate license
revenue from a limited number of distribution and supply
agreements; the pharmaceutical industry is highly competitive;
requirements for additional capital to fund future operations;
products in Canada may be subject
to pricing regulation; dependence on key managerial personnel and
external collaborators; no assurance that we will receive
regulatory approvals in the U.S., Canada or any other jurisdictions and current
uncertainty surrounding health care regulation in the U.S.; certain
of our products are subject to regulation as controlled substances;
limitations on reimbursement in the healthcare industry; limited
reimbursement for products by government authorities and
third-party payor policies; products may not be included on list of
drugs approved for use in hospitals; hospital customers may make
late payments or not make any payments; various laws pertaining to
health care fraud and abuse; reliance on the success of strategic
investments and partnerships; the publication of negative results
of clinical trials; unpredictable development goals and projected
time frames; rising insurance costs; ability to enforce covenants
not to compete; risks associated with the industry in which we
operate; we may be unsuccessful in evaluating material risks
involved in completed and future acquisitions; we may be unable to
identify, acquire or integrate acquisition targets successfully;
legacy risks from operations conducted in the U.S.; inability to
meet covenants under our long term debt arrangement; compliance
with privacy and security regulation; our policies regarding
returns, allowances and chargebacks may reduce revenues; certain
current and future regulations could restrict our activities;
additional regulatory burden and controls over financial reporting;
reliance on third parties to perform certain services; general
commercial litigation, class actions, other litigation claims and
regulatory actions; the difficulty for shareholders to realize in
the United States upon judgments
of U.S. courts predicated upon civil liability of the Company and
its directors and officers who are not residents of the United States; the potential violation of
intellectual property rights of third parties; our efforts to
obtain, protect or enforce our patents and other intellectual
property rights related to our products; changes in U.S., Canadian
or foreign patent laws; litigation in the pharmaceutical industry
concerning the manufacture and supply of novel and generic versions
of existing drugs; inability to protect our trademarks from
infringement; shareholders may be further diluted if we issue
securities to raise capital; volatility of our share price; the
fact that we have a significant shareholder; we do not currently
intend to pay dividends; our operating results may fluctuate
significantly; and our debt obligations will have priority over the
common shares of the Company in the event of a liquidation,
dissolution or winding up.
We caution that the foregoing list of important factors that
may affect future results is not exhaustive. When reviewing our
forward-looking statements, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events. Additional information about factors that may
cause actual results to differ materially from expectations, and
about material factors or assumptions applied in making
forward-looking statements, may be found in the "Risk Factors"
section of the Company's Annual Information Form for the year ended
December 31, 2021, and elsewhere in
our filings with Canadian securities regulators. Except as required
by Canadian securities law, we do not undertake to update any
forward-looking statements, whether written or oral, that may be
made from time to time by us or on our behalf; such statements
speak only as of the date made. The forward-looking statements
included herein are expressly qualified in their entirety by this
cautionary language.
1)
|
At the September 30,
2022 exchange rate – 1.3707
|
|
|
2)
|
EBITDA and adjusted
EBITDA are non-IFRS financial measures. The term EBITDA
(earnings before interest, taxes, depreciation and amortization,)
does not have any standardized meaning under IFRS and therefore may
not be comparable to similar measures presented by other companies.
Rather, these measures are provided as additional information to
complement IFRS measures by providing a further understanding of
operations from management's perspective. The Company defines
Adjusted EBITDA as earnings before interest expense, income taxes,
depreciation of property and equipment, amortization of intangible
assets, non-cash share-based compensation, changes in fair value of
derivative financial instruments, provision for legal settlement,
loss on disposal of assets and loss on extinguishment of lease,
impairment of intangible assets, restructuring costs and foreign
exchange gains and losses from the translation of Canadian cash
balances.
|
|
|
The following is a summary of how EBITDA and Adjusted EBITDA are
calculated:
(IN THOUSANDS
OF U.S.
DOLLARS)
|
Three months
ended
September 30,
2022
|
Three months
ended
September 30,
2021
|
Nine
months
ended
September 30,
2022
|
Nine months
ended
September 30,
2021
|
|
$
|
$
|
$
|
$
|
Income from
continuing
operations
|
2,654
|
796
|
6,956
|
4,948
|
Add back:
|
|
|
|
|
Depreciation and
amortization
|
338
|
155
|
648
|
550
|
Interest expense,
net
|
(157)
|
13
|
(197)
|
492
|
Income
taxes
|
(359)
|
515
|
1,590
|
2,196
|
EBITDA
|
2,476
|
1,479
|
8,997
|
7,784
|
Change in fair value of
derivative
financial instrument
|
—
|
—
|
—
|
(5)
|
Loss (gain) from the
translation of
Canadian cash balances
|
72
|
(58)
|
129
|
(67)
|
Loss on disposal of
assets and
extinguishment of lease
|
—
|
758
|
—
|
758
|
Provision for legal
settlement
|
—
|
—
|
—
|
1,250
|
Share-based
compensation
|
84
|
34
|
169
|
114
|
Adjusted
EBITDA
|
2,632
|
2,213
|
9,295
|
9,834
|
Adjusted EBITDA per
share – basic
|
0.10
|
0.08
|
0.37
|
0.37
|
Adjusted EBITDA per
share – dilutive
|
0.10
|
0.08
|
0.36
|
0.36
|
SOURCE Cipher Pharmaceuticals Inc.