Cipher Pharmaceuticals Inc. (TSX: DND) today announced its financial and operational results for the three and six months ended June 30, 2010.
Q2 2010 Summary --------------- - Net revenue increased to $2.2 million from $0.7 million in Q2 2009, driven mainly by the achievement of a US$1 million commercial milestone for Lipofen(R). - Net income for the quarter was $0.7 million, or $0.03 per share, compared with a loss of $0.8 million, or $0.03 per share, for Q2 2009. - Achieved final FDA approval for CIP-TRAMADOL ER, the Company's extended-release tramadol product. - Reached 75% enrolment (over 700 patients) in CIP-ISOTRETINOIN Phase III safety study. - Strong balance sheet at quarter end with cash of $10.3 million and no debt, compared with cash of $9.0 million at December 31, 2009.
"The second quarter was highlighted by final FDA approval of our extended-release tramadol - our second product approved in the U.S. market," said Larry Andrews, President and CEO of Cipher. "We are working diligently to finalize a marketing partnership as we prepare for commercial launch, targeted for the first quarter of 2011. Achievement of a sales milestone for Lipofen(R) during the quarter reflects Kowa's continued commercial success in the U.S. and further strengthens our financial position."
Financial Review ----------------
Net revenue in Q2 2010 was $2.2 million, compared with $0.7 million in Q2 2009. The improved performance reflects a continuing trend of higher royalty revenue for the product during the quarter, as well as the achievement of a one-time US$1 million commercial milestone for Lipofen(R).
Gross Research and Development ("R&D") expenditures for Q2 2010 rose to $3.5 million, compared with $1.5 million in Q2 2009, driven by the CIP-ISOTRETINOIN clinical study. The reported R&D expenditure amount of $0.2 million for Q2 2010 is net of $3.3 million of reimbursed expenses by Cipher's U.S. marketing partner. Operating, General and Administrative ("OG&A") expenses for Q2 2010 were $1.1 million, consistent with the prior year.
For the three months ended June 30, 2010, the Company recorded net income of $0.7 million ($0.03 per basic and diluted share), compared with a loss of $0.8 million ($0.03 per basic and diluted share) for Q2 2009.
For the first half of 2010, the Company recorded net revenue of $3.1 million, compared with $1.3 million in the first half of 2009. Net income for the first six months of 2010 was $0.2 million ($0.01 per basic and diluted share), compared with a net loss of $1.6 million ($0.06 per basic and diluted share) in the first half of 2009.
The Company's financial position remained solid at quarter-end. As at June 30, 2010, Cipher had cash of $10.3 million, compared with $9.0 million as at December 31, 2009 and continued to have no debt.
Product Update --------------
During Q2 2010, Lipofen(R) monthly prescriptions showed steady growth, as Kowa increased coverage of the primary care physicians in its targeted regions and expands its sales force. Kowa's sales force grew to approximately 250 at the end of the second quarter to support the recent launch of its pitavastatin product, LIVALO(R).
During Q3 2009, Cipher commenced its Phase III safety trial for CIP-ISOTRETINOIN under a Special Protocol Assessment ("SPA") with the U.S. Food and Drug Administration ("FDA"). The 800-patient study is a double-blind, randomized trial comparing CIP-ISOTRETINOIN to an FDA-approved, commercially available isotretinoin product. The study is being conducted in the U.S. and Canada over an 18-month period. The study is progressing well with enrolment having reached more than 700 patients at the end of Q2 2010. The Company is expecting to complete enrolment toward the end of Q3 2010.
In May 2010, Cipher announced that the FDA has approved CIP-TRAMADOL ER, the Company's extended-release tramadol product, for the treatment of moderate to moderately severe chronic pain in adults. Also during Q2 2010, the United States Court of Appeals upheld the lower court's original decision on patent infringement litigation initiated by Pharma Products L.P against Par Pharmaceutical Companies, Inc. relating to Ultram(R) ER, the reference product in Cipher's New Drug Application for CIP-TRAMADOL ER. This affirmed the invalidity of the asserted claims of the Orange Book-listed patents for Ultram(R) ER. These are the same patents that were originally asserted against Cipher and for which Cipher was granted summary judgment in January 2010. This decision confirms Cipher's long-held view that these patents are invalid, and further mitigates any remaining risk of patent litigation on these patents against CIP-TRAMADOL ER. Cipher is currently preparing for the U.S. commercial launch of the product, which includes securing a marketing partner and finalizing commercial manufacturing requirements. The Company is targeting Q1 2011 for commercial launch.
Cipher continues to actively pursue new early stage pipeline product candidates and advance out-licensing discussions for its current products.