Cardiome Pharma Corp. (NASDAQ: CRME / TSX: COM) today reported financial results for the first quarter ended March 31, 2010. Amounts, unless specified otherwise, are expressed in U.S. dollars and in accordance with generally accepted accounting principles used in the United States of America (U.S. GAAP).
We recorded net income of $15.5 million ($0.26 per common share) for the three months ended March 31, 2010 (Q1-2010), compared to a net loss of $9.2 million ($0.14 per common share) for the three months ended March 31, 2009 (Q1-2009). The net income for the current quarter was largely due to revenue recognized from the payments from Merck pursuant to the collaboration and licence agreement and decreased research and development expenditures.
Total revenue for Q1-2010 was $23.0 million, an increase of $22.8 million from $0.2 million in Q1-2009.
Research and development expenditures were $3.8 million for Q1-2010 compared to $6.2 million for Q1-2009. General and administration expenditures for Q1-2010 were $3.4 million compared to $3.3 million for Q1-2009. Other expenses for Q1-2010 were $0.2 million compared to other income of $0.3 million for Q1-2009.
Stock-based compensation, a non-cash item included in operating expenses, increased to $0.8 million for Q1-2010, as compared to $0.3 million for Q1-2009.
Liquidity and Outstanding Share Capital
At March 31, 2010, the Company had cash and cash equivalents of $63.5 million. As of May 11, 2010, the Company had 60,636,438 common shares issued and outstanding and 6,218,052 common shares issuable upon the exercise of outstanding stock options at a weighted-average exercise price of CAD $7.49 per share.
Adoption of U.S. GAAP
The Company has adopted U.S. GAAP as its basis of financial reporting commencing January 1, 2010 on a retrospective basis, and comparative financial information has been recast to reflect the Company's results as if they had been historically reported in accordance with U.S. GAAP. These adjustments resulted in an increase in deficit of $13.7 million, a decrease in intangible assets of $13.9 million, an increase in common share capital of $0.4 million, and an increase in additional paid-in capital of $0.1 million, at January 1, 2010.
The functional currency of each of the Company's operations changed to U.S. dollars from Canadian dollars on January 1, 2010 based on management's analysis of the primary economic environment in which the Company and its wholly owned subsidiaries operate. The change in functional currency is accounted for prospectively from January 1, 2010 and prior year financial statements have not been restated for the change in functional currency.
The Company has also adopted the U.S. dollar as its reporting currency effective January 1, 2010 to better reflect its business and to improve comparability of its financial information with other publicly traded businesses in the life sciences industry. Prior year financial statements and all comparative financial information contained herein have been recast to reflect the Company's results as if they had been historically reported in U.S. dollars. All revenues, expenses and cash flows for each period were translated into the reporting currency using average rates for the period, or the rates in effect at the date of the transaction for significant transactions. Assets and liabilities were translated using the exchange rate at the end of the period and shareholders' equity was translated at historical rates. The resulting translation adjustment is recorded as cumulative translation adjustment (CTA) in accumulated other comprehensive income. The cumulative impact of the change in reporting currency was to increase accumulated other comprehensive income by $18.2 million as at December 31, 2009.