- Revenue for nine months ended September 30, 2021increases 4.1% to $16.1 million
- Adjusted EBITDA1 for nine months ended
September 30, 2021 increases to
$9.8 million
- Basic EPS for the nine months ended September 30, 2021 increases 12% to $0.19 (CDN$0.242)
- Excluding one-time charges, EPS for the nine months ended
September 30, 2021 was $0.263 (CDN$0.33)
- The Canadian product revenue increased 30% during the nine
months ended September 30, 2021
compared to the similar period in 2020.
- During the quarter, the Company assigned the office lease
for its corporate head office which will result in a savings of
CAD$2.2 million over the remainder of
the lease term.
OAKVILLE, ON, Nov. 11, 2021 /CNW/ - Cipher Pharmaceuticals Inc.
(TSX: CPH) ("Cipher" or "the Company") today
announced its financial and operating results for the three and
nine months ended September 30, 2021. Unless otherwise noted,
all figures are in U.S. dollars.
Year-to-Date (Nine months ended September 30, 2021) Financial
Highlights
(All figures in U.S. dollars, compared to nine
months ended September 30, 2020,
unless otherwise noted)
- Total revenue increased 4.1% to $16.1
million compared to $15.5
million
- SG&A decreased 7% to $4.1
million compared to $4.4
million
- Adjusted EBITDA1 increased to $9.8 million
- Basic EPS increased 12% to $0.19
compared to $0.17
- Excluding one-time charges, basic and diluted EPS was
$0.263 (CDN$0.33) compared to basic and diluted EPS of
$0.17 and $0.16 respectively
- As at September 30, 2021, the
Company had $15.6 (CDN$19.9) million in cash or $0.59 per share (CDN$0.75)
- Normal Course Issuer Bid 864,100 shares repurchased and
cancelled to the end of September 30,
2021
Q3 2021 Financial Highlights
(All figures are in
U.S. dollars)
- Total revenue $4.5 million
compared to $4.8 million in Q3
2021
- Adjusted EBITDA decreased to $2.2
million compared to $2.8
million
- Basic EPS $0.03 compared to
$0.06
- Excluding one-time charges, basic and diluted EPS for the three
months ended September 30, 2021 was
$0.064 (CDN$0.08) compared to $0.06 in Q3 2020
- Normal Course Issuer Bid 233,100 shares repurchased and
cancelled during the three months ended September 30, 2021
Management Commentary
Craig Mull, Interim CEO
commented, "Our year-to-date results continue to trend
positively. Revenue, Adjusted EBITDA and EPS all showed growth
compared to the same period last year. We generated $8.1 million in cash from operating activities in
the nine months ending September 30,
2021, ending the period with $15.6
million in cash, placing us in an excellent position as we
continue to actively pursue profitable growth opportunities and
maximize the income generated from our distribution
agreements."
"During the quarter, the Company elected to assign the office
lease for its corporate head office to a third party, which will
result in a savings of CAD$2.2
million over the remainder of the lease term. As a
result of this transaction, the Company paid an inducement payment
which impacted EPS. Excluding this charge, EPS for the quarter
would have been $0.06 and EPS for the
nine months ended September
30th would have been $0.21. Our year-to-date EPS was also impacted by
the legal provision we took earlier this year, if you exclude this,
EPS would have been $0.26 for the
nine months ended September 30,
2021."
"Our product revenue increased 30% year-to-date and increased
27% in Q3 compared to the same period in the prior year. Product
revenue continues to be driven by the strength of Epuris which
ended the quarter with 43% market share, compared to 41% in the
prior year. Subsequent to quarter end, Italmex, our distribution
partner for isotretinoin products in Mexico, received approval of Epuris 10mg, and
20mg in Mexico by COFEPRIS. Under
the terms of the agreement with Italmex, Cipher is eligible for a
royalty on Epuris sales in Mexico."
"During the second quarter, we launched Absorica AG with our
marketing partner Sun Pharmaceutical Industries, Inc. ("Sun
Pharma"). During the third quarter, license fees were down
sequentially, due to the combination of normal draw down of
launched quantities at the wholesale level, as well as seasonality
associated with the product. Q3 is the seasonally weakest
quarter of the year for isotretinoin products due to the summer
months, which reduce prescribing trends."
Outlook
Cipher anticipates several key milestones in 2021 that will
continue to enhance long term value, including:
- Realignment of distribution to increase royalty income.
- Improved profitability of our hospital business through a
distribution agreement with Verity
- Normal Course Issuer Bid - 864,100 shares repurchased and
cancelled to the end of September 30,
2021
- Actively pursuing product and business acquisitions with a
focus on high growth potential and near-term profitability
Financial Statements and MD&A
Cipher's Financial Statements for the quarter
ended September 30, 2021 and Management's Discussion and
Analysis (the "MD&A") for the three and nine-months
ended September 30, 2021 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 12, 2021,
at 8:30 a.m. (ET) to discuss its financial results and
other corporate developments.
- To access the conference call by telephone, dial 647-792-1241
or 866-248-8441 and use conference ID 9256970.
- A live audio webcast will be available at
https://produceredition.webcasts.com/starthere.jsp?ei=1511252&tp_key=b261dfbc7e
- An archived replay of the webcast will be available until
November 19, 2021.
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.
1)
|
EBITDA is a
non-IFRS financial measure. 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, loss on
debt extinguishment, non-cash share-based compensation, changes in
fair value of derivative financial instruments, impairment of
intangible assets and goodwill and foreign exchange gains and
losses from the translation of Canadian cash
balances.
|
2)
|
At the CAD/USD
exchange rate September 30, 2021(1.2741)
|
3)
|
Excluding the
provision for legal settlement of $1.25 million, loss on disposal
of assets of $0.7 million and loss on extinguishment of lease of
$0.1 million, income from continuing operations per common share on
both a basic and diluted basis for the nine months ended September
30, 2021 was $0.26 (CDN$0.33) compared to income per common share
on both a basic and diluted basis of $0.17 and $0.16, respectively,
for the nine months ended September 30, 2020.
|
4)
|
The loss on
disposal of assets of $0.7 million and loss on extinguishment of
lease of $0.1 million, Income from continuing operations per common
share on both a basic and diluted basis for the three months ended
September 30, 2021 was $0.06 (CDN$0.08) compared to $0.06 in Q3
2020
|
Forward-Looking Statements
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, 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, 2020, 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.
The following is a summary of how EBITDA and Adjusted EBITDA are
calculated:
(IN THOUSANDS
OF U.S. DOLLARS)
|
Three months
ended
September 30,
2021
|
Three months
ended
September 30,
2020
|
Nine
months ended
September 30,
2021
|
Nine
months
ended
September 30,
2020
|
|
$
|
$
|
$
|
$
|
Income from
continuing operations
|
796
|
1,603
|
4,948
|
4,486
|
Add back:
|
|
|
|
|
Depreciation and
amortization
|
155
|
306
|
550
|
907
|
Interest expense,
net
|
13
|
95
|
92
|
278
|
Income
taxes
|
515
|
670
|
2,196
|
3,855
|
EBITDA
|
1,479
|
2,674
|
7,784
|
9,526
|
Change in fair value
of derivative financial instrument
|
—
|
(12)
|
(5)
|
4
|
Restructuring
costs
|
—
|
147
|
—
|
147
|
Loss (gain) from the
translation of Canadian cash balances
|
(58)
|
(27)
|
(67)
|
(11)
|
Loss on disposal of
assets
|
658
|
—
|
658
|
—
|
Loss on
extinguishment of lease
|
100
|
—
|
100
|
—
|
Provision for legal
settlement
|
—
|
—
|
1,250
|
—
|
Share-based
compensation
|
34
|
50
|
114
|
140
|
Adjusted
EBITDA
|
2,213
|
2,832
|
9,834
|
9,806
|
Adjusted EBITDA per
share – basic
|
0.08
|
0.10
|
0.37
|
0.36
|
Adjusted EBITDA per
share – dilutive
|
0.08
|
0.10
|
0.36
|
0.36
|
SOURCE Cipher Pharmaceuticals Inc.