Cipher Pharmaceuticals Inc. (TSX: DND) today announced its financial and operational results for the fourth quarter and fiscal year ended December 31, 2009.
Fiscal 2009 Summary
- Total revenue more than doubled to $3.2 million, driven by growth of
Lipofen(R) prescriptions.
- Strong balance sheet at year end with cash of $9.0 million and no
debt, compared with cash of $9.9 million at December 31, 2008.
- Commenced CIP-ISOTRETINOIN Phase III safety trial in Q3; with 176
patients enrolled at year-end.
- Achieved tentative FDA approval for CIP-TRAMADOL ER; subsequent to
year end, received favourable summary judgment motion relating to
patent litigation.
- Strengthened Board of Directors with the addition of Dr. William
Claypool.
"The continued steady growth of Lipofen(R) prescriptions helped us deliver a strong year-over-year increase in revenue and reduce our cash burn, ensuring that our financial position remains solid," said Larry Andrews, President and CEO of Cipher. "From a clinical perspective, we commenced enrolment on our Phase III safety trial for CIP-ISOTRETINOIN, and this continues to progress well. On the regulatory front, 2009 saw us obtain tentative FDA approval for CIP-TRAMADOL ER. More recently, we received a favourable judgment in pending patent litigation for this product, clearing the way for us to pursue final FDA approval."
Financial Review
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Total revenue in 2009 was $3.2 million, compared with $1.5 million in 2008. Revenue from Lipofen(R) totalled $2.9 million in 2009, reflecting the continued market penetration by Lipofen(R) as Kowa increases the sales and promotion effort behind the product. Revenue from CIP-ISOTRETINOIN was $0.3 million in 2009, which relates to revenue recognized on the Company's share of the US$1 million upfront milestone payment received from Ranbaxy in 2008.
Gross Research and Development ("R&D") expenditures for 2009 were $5.4 million, compared with $2.2 million in 2008. The reported R&D amount of $1.0 million for 2009 is net of reimbursements of $4.4 million from Ranbaxy related to the CIP-ISOTRETINOIN clinical study. As previously disclosed, the Company's U.S. marketing partner, Ranbaxy Pharmaceuticals, is reimbursing Cipher for all costs associated with the clinical studies required to obtain FDA approval, up to a predetermined cap. Any additional development costs associated with initial FDA approval will be shared equally.
Operating, General and Administrative ("OG&A") expenses for 2009 were $4.3 million, compared with $3.6 million in 2008. The year-over-year change reflects the increased level of activity related to pursuing pipeline expansion opportunities. The loss for the 12 months ended December 31, 2009 decreased to $2.7 million ($0.11 per basic and diluted share), compared with a net loss of $3.2 million ($0.13 per basic and diluted share) in 2008.
In Q4 2009, Cipher recorded licensing revenue of $0.8 million, compared with $0.4 million in Q4 2008. Gross R&D expenditures for the fourth quarter were $3.0 million, and reported R&D expenses were $0.3 million. OG&A expenses for Q4 2009 were $1.1 million, compared with $0.9 million in the same period last year. Loss for the three months ended December 31, 2009 was $0.6 million ($0.03 per basic and diluted share), compared with a loss of $0.5 million ($0.02 per basic and diluted share) in the same period last year.
The Company's financial position remained solid at year-end. As at December 31, 2009, Cipher had cash of $9.0 million, compared with $9.9 million as at December 31, 2008.
Product Update
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During 2009, Lipofen(R) monthly prescriptions showed steady growth, and Cipher is hopeful that this trend will continue as Kowa increases penetration of the primary care physicians in its targeted regions and expands its sales force. Kowa's sales force reached approximately 200 at the end of the year, and additional increases are expected in Q1 2010 to support the launch of Kowa's pitavastatin product, LIVALO(R), in the second quarter of 2010.