Feb 25 2010
- Company Preparing for Q3 2010 U.S. Launch of OLEPTRO(TM) -
Labopharm Inc. (TSX: DDS; NASDAQ: DDSS) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2009. All figures are in Canadian dollars unless otherwise stated.
"On February 2, Labopharm realized an important milestone - the FDA's approval of our once-daily antidepressant, OLEPTRO(TM), for the U.S. market," said James R. Howard-Tripp, President and Chief Executive Officer, Labopharm Inc.
Labopharm expects to launch OLEPTRO(TM) in the third quarter of 2010. The Company is focused on securing a marketing partnership that would allow Labopharm to participate in OLEPTRO(TM)'s marketing and sales effort. Labopharm's recently completed equity offering allows the Company to continue to prepare for the commercial launch of OLEPTRO(TM) in parallel with its partnering discussions.
"We have invested a considerable amount of time and effort to understand our physician, patient and payor audiences, are in the process of finalizing a commercial strategy, including positioning, market access and distribution, and are pleased with the preliminary indications regarding our payor status," added Mr. Howard-Tripp.
Financial Summary
Revenue from sales of the Company's once-daily tramadol product for the fourth quarter of fiscal 2009 increased to $4.7 million from $3.3 million for the fourth quarter of fiscal 2008 and was composed of product sales outside of the U.S. of $4.5 million and product sales in the U.S. of $0.2 million. Total revenue for the fourth quarter of fiscal 2009 was $6.7 million compared with $4.4 million for the fourth quarter of fiscal 2008.
Gross margin for sales outside of the U.S. for the fourth quarter of fiscal 2009 was 55% compared with 56% for the fourth quarter of fiscal 2008. Research and development expenses, net of research and development tax credits, for the fourth quarter of fiscal 2009 were $2.6 million compared with $5.2 million for the fourth quarter of fiscal 2008. Selling, general and administrative expenses for the fourth quarter of fiscal 2009 were $5.2 million compared with $10.6 million for the fourth quarter of fiscal 2008 and included an accrual of $1.2 million in 2009 compared to $4.8 million in 2008, for the Company's share of litigation costs for patent enforcement related to its once-daily tramadol product in the U.S. Net loss for the fourth quarter of fiscal 2009 was $6.4 million, or $0.11 per share, compared with $14.6 million, or $0.26 per share, for the fourth quarter of fiscal 2008.
Other Key Developments
OLEPTRO(TM) (Antidepressant)
Awaiting Canadian Regulatory Approval - Labopharm's New Drug Submission for OLEPTRO(TM) is currently under regulatory review in Canada with an anticipated action date of August 4, 2010.
Twice-Daily Tramadol-Acetaminophen Formulation
Initiated Regulatory Approval Process in Europe - Labopharm initiated the regulatory approval process for its twice-daily tramadol-acetaminophen formulation for a number of European countries under the Decentralized Procedure (DCP), which provides an efficient mechanism that allows a company to simultaneously pursue regulatory approval for a medicinal product in multiple jurisdictions in Europe. The countries for which the DCP has been initiated represent more than 25% of the European market for tramadol-acetaminophen products.
Once-Daily Tramadol
Global In-Market Sales Continue to Grow - In-market sales (in U.S. dollars) of Labopharm's product (that is, sales of Labopharm's product by its licensing and distribution partners to end users) for the 12-months ended September 30, 2009 grew by 63% compared to the comparable period of 2008.
Tridural is Canada's Best-Selling Once-Daily Tramadol Product for 2009 - Labopharm's product (marketed under the brand name Tridural(TM) in Canada) was the best-selling once-daily tramadol product in Canada for 2009.
Abuse-Misuse-Deterrent Platform
Initiated Clinical Development Program - Labopharm initiated the clinical program for its first product, an abuse- and misuse-deterrent formulation of a widely prescribed combination opioid pain product.
Financial Results
Three-Month Period Ended December 31, 2009
Revenue from product sales in all territories for the fourth quarter of fiscal 2009 increased to $4.7 million from $3.3 million for the fourth quarter of fiscal 2008. Revenue from product sales to territories other than the U.S. was $4.5 million compared with $3.3 million for the fourth quarter of fiscal 2008. The increase was the result of both higher sales volumes and a higher average selling price in the fourth quarter of 2009. Total revenue for the fourth quarter of fiscal 2009 was $6.7 million compared with $4.4 million for the fourth quarter of fiscal 2008.
Under its licensing and distribution agreement with Purdue Pharma Products L.P. for RYZOLT(TM) in the United States, Labopharm is currently entitled to royalty payments of 20% of Purdue's net sales of the product. Royalty revenue recorded on sales of RYZOLT(TM) in the U.S., which is recognized for accounting purposes upon dispensing of the product to the patient based on third-party prescription data (the "sell-through" method), was $0.6 million for the fourth quarter of 2009.
Labopharm supplies finished packaged RYZOLT(TM) product at cost to Purdue, for which the Company records revenue from product sales that generate essentially no gross margin. As a result, gross margin figures discussed below exclude sales and cost of goods sold for product sold in the U.S. to provide a more meaningful understanding of those figures. Gross margin (as a percentage of revenue from product sales) for territories outside the U.S. for the fourth quarter of fiscal 2009 was 55% compared with 56% for the fourth quarter of fiscal 2008.
Licensing revenue for the fourth quarter of fiscal 2009 was $1.2 million and represented a portion of licensing payments received from the Company's licensing and distribution partners for its once-daily tramadol product and twice-daily tramadol-acetaminophen formulation. Licensing revenue for the fourth quarter of fiscal 2008 was $1.2 million.
Research and development expenses, before research and development tax credits, for the fourth quarter of fiscal 2009 were $3.0 million compared with $4.2 million for the fourth quarter of fiscal 2008. The decrease was primarily the result of lower clinical trial costs in the fourth quarter of fiscal 2009. Research and development tax credits for the fourth quarter of fiscal 2009 were $0.4 million compared with negative $1.0 million in the fourth quarter of 2008. Negative R&D tax credits for the fourth quarter of 2008 were the result of a reversal due to a change in tax planning strategy in 2008.
Selling, general and administrative expenses for the fourth quarter of fiscal 2009 were $5.2 million compared with $10.6 million for the fourth quarter of fiscal 2008. The decrease is primarily the result of lower accruals for the Company's share of litigation costs incurred by Purdue to enforce certain of Purdue's U.S. patents related to Labopharm's once-daily tramadol product, which were $1.2 million for the fourth quarter of 2009 compared with $4.8 million for the fourth quarter of 2008. The Company also incurred a $0.9 million restructuring charge during the fourth quarter of 2009 as a result of the reduction in workforce announced in November 2009.
Net loss for the fourth quarter of fiscal 2009 was $6.4 million, or $0.11 per share, compared with $14.6 million, or $0.26 per share, for the fourth quarter of fiscal 2008.
Cash, cash equivalents and marketable securities as at December 31, 2009 were $24.5 million compared with $23.8 million as at September 30, 2009. During the fourth quarter of fiscal 2009, the Company received a 4.0 million Euros (CAD$6.2 million) payment under its distribution and supply agreement with Grunenthal GmbH. Subsequent to quarter end, the Company completed a draw down under its standby equity distribution agreement (SEDA) and an underwritten public offering of units that, combined, generated net proceeds of approximately US$21.9 million (CAD$22.9 million).
Twelve-Month Period Ended December 31, 2009
Revenue for fiscal 2009 was $24.6 million compared with $22.0 million for fiscal 2008. Revenue from product sales in all territories for fiscal 2009 increased to $18.5 million from $13.2 million for fiscal 2008. Revenue from product sales to territories other than the U.S. increased to $15.8 million from $13.2 for fiscal 2008. The increase in product sales to territories other than the U.S. is primarily the result of a higher average selling price per tablet in 2009 due to more favourable country and product dosage strength mixes. Product sales to the U.S. were $2.7 million. Royalty revenue recorded on U.S. sales was $1.0 million.
Gross margin (as a percentage of revenue from product sales) for territories outside the U.S. for fiscal 2009 was 62% compared with 56% for fiscal 2008. The increase is primarily the result of higher average selling prices per tablet during fiscal 2009.
Licensing revenue for fiscal 2009 was $4.9 million and represented a portion of licensing payments received from the Company's licensing and distribution partners for its once-daily tramadol product and twice-daily tramadol-acetaminophen formulation. Licensing revenue for fiscal 2008 was $8.9 million, including the non-recurring licensing revenue of $4.4 million related to the Company's reacquisition of the rights to its once-daily tramadol product for the United Kingdom.
Net loss for fiscal 2009 was $26.1 million, or $0.46 per share, compared with $40.6 million, or $0.72 per share, for fiscal 2008. The decrease in net loss is primarily the result of lower research and development costs, a higher foreign exchange gain and the absence of an impairment loss, which were partially offset by lower interest income, higher financial expenses and the restructuring charge incurred in fiscal 2009.
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