MONTREAL, CANADA--(Marketwired - Aug. 14, 2013) - Paladin Labs Inc. (TSX:PLB), a leading specialty pharmaceutical company, today reported its financial results for the quarter ended June 30, 2013.
2013 Second Quarter Highlights
Financial
- Adjusted(2) revenues reached $52.3 million, an increase of 41% over the same period last year
- Adjusted(2) EBITDA(1) reached $22.7 million, an increase of 32% over the same period last year
Product Developments
- Acquired Binotal® from Bayer Pharma AG ("Bayer") for Latin America including Mexico, Brazil, Columbia, Ecuador and select countries in Central America
- Launched Silenor® (doxepin hydrochloride) for the treatment and symptomatic relief of insomnia
- Launched Amniosense™, Canada's first OTC amniotic fluid leak detection test
- Submitted a new drug application ("NDA") to the U.S. Food and Drug Administration (FDA) for Impavido® (miltefosine) and received priority review status
Corporate Developments
- Completed a strategic collaboration to refinance and increase Bioniche's debt for up to US $30 million, to provide new equity of up to $0.5 million, and to enter into a licensing agreement for Bioniche's Phase III bladder cancer product - Urocidin™ for Canada, South Africa and Mexico.
- Amended a secured loan agreement with Nuvo Research Inc. ("Nuvo") to issue a second tranche of $4 million, add a potential third $4 million loan tranche and issue up to 100,000 warrants to acquire Nuvo common shares
- Issued a combined balance of $4.2 million secured loans to two additional undisclosed pharmaceutical companies
- Entered into license agreement with Altus Formulation Inc. ("Altus") for certain Labopharm Inc technology in exchange for a 35% equity ownership interest
Subsequent to the quarter
- Closed the agreements related to Bioniche and Nuvo
- Acquired Allon Therapeutics Inc. ("Allon")
"In the second quarter, Paladin posted record EBITDA(1) while continuing to invest in its product portfolio and pipeline. Paladin further expanded its Latin American footprint with the acquisition of Binotal for Latin America and select Central American countries. In addition, we expanded our product portfolio and pipeline with the launch of Silenor and Amniosense and the in-licensing of Phase III product Urocidin. Furthermore, we deployed nearly $40 million through secured strategic loans to four pharmaceutical companies" said Mark Beaudet, interim President and CEO of Paladin Labs.
Financial Results
Adjusted(2) revenues increased $15.2 million or 41% to $52.3 million for the second quarter of 2013 from $37.1 million for the same period in 2012. The increase is mostly attributable to the proportionate consolidation of Litha's revenues of $11.9 million for the quarter ended June 30, 2013. Paladin's promoted products, including Tridural®, Trelstar®, Testim®, Abstral®, Digifab®, Glucagen®, Oralair® and Pollinex®-R combined increased by 30% for the quarter compared to the same period last year.
Consolidated revenues for the quarter ended June 30, 2013 were $67.2 million, an increase of 81% over the same period last year. The increase is mostly attributable to the consolidation of Litha's revenues of $26.8 million for the quarter.
Second quarter 2013 adjusted(2) EBITDA(1) increased 32% to $22.7 million, compared to adjusted(2) EBITDA(1) of $17.2 million in the second quarter of 2012. This increase is primarily due to the strong sales performance of Paladin's promoted products, partially offset by increased costs associated with the launch of new products. Litha contributed $1.8 million to adjusted(2) EBITDA(1) which includes impact of higher gross income margins as a result of the mix of products sold in the quarter offset by the impact of the continued decline in the South African Rand.
Consolidated EBITDA(1) reached a record $24.9 million, an increase of 44% over the consolidated EBITDA(1) for the quarter ended June 30, 2012. This increase is primarily due to the consolidation of Litha, which contributed $4.0 million in consolidated EBITDA(1) for the quarter.
Net income attributable to shareholders for the quarter was $13.6 million or $0.64 per fully diluted share, compared to net income attributable to shareholders of $10.9 million or $0.52 per fully diluted share the same quarter a year ago.
As at June 30 2013, Paladin's cash, cash equivalents and investments in marketable securities net of bank overdraft totaled $247.7 million. From this strong cash position, Paladin continues to pursue business and corporate development opportunities.
Product Developments
During the second quarter of 2013, Paladin advanced its product portfolio and pipeline.
Paladin grew its international business with the acquisition of Binotal from Bayer for Latin America and select countries in Central America. Binotal is used for the systemic treatment of a wide range of bacterial infections. Binotal has a strong market position in the region and recorded sales in 2012 in excess of $11 million in Latin America with Mexico and Brazil generating two-thirds of the revenues. Bayer will provide certain distribution support services for an interim period.
During the quarter, Paladin added to its prescription and OTC portfolio with the launch of Silenor and Amniosense. Silenor is indicated for the treatment and symptomatic relief of insomnia and competes in the Canadian prescription sleep aid market which in 2012 was valued at over $90 million(3). In addition, Paladin's OTC portfolio was expanded with the launch of Amniosense, Canada's first and only OTC amniotic fluid leak detection test.
During the second quarter, Paladin expanded its product pipeline with the in-licensing of Urocidin and the NDA for Impavido. Paladin entered into an exclusive license to market and sell Bioniche's phase III bladder cancer treatment Urocidin in Canada, South Africa and Mexico. Furthermore, Paladin submitted a NDA to the FDA for Impavido and was granted priority review status. If approved, Paladin will be authorized to commercialize Impavido in the U.S. and will receive a priority review voucher through the FDA's tropical disease priority review voucher program.
Corporate Developments
During the quarter, Paladin entered into a strategic agreement with Bioniche to refinance and increase its debt for up to US $30 million, provide new equity of up to $0.5 million and license Urocidin. Paladin acquired Bioniche's existing secured debt facility with Capital Royalty Partners II L.P. and its affiliates for approximately US $22 million. In addition, Paladin and Bioniche entered into an amended secured loan transaction whereby Paladin provided an additional US $8 million loan to Bioniche, US $5 million of which was paid upon closing and the remaining US $3 million will be available upon meeting certain conditions. The loan bears an interest rate of 13.25% and will mature on July 1, 2014. Furthermore, Paladin was granted warrants to acquire up to 2 million common shares of Bioniche, in addition to another 1 million warrants which may be issued to Paladin under certain conditions.
Paladin also amended its existing loan agreement with Nuvo and issued a second tranche of $4 million bearing an interest rate of 15%. The amendment includes a third $4 million tranche which may be drawn upon achieving certain conditions, the issuance of up to 100,000 warrants to acquire Nuvo common shares and the right to in-license WF10, Nuvo's immune modulation drug candidate, if certain conditions are met.
During the second quarter, Paladin issued a combined balance of $4.2 million in secured loans to two additional unnamed pharmaceutical companies. Paladin also entered into a license agreement for certain intellectual property and related technology of Labopharm Inc. to Altus Formulation Inc. ("Altus") in exchange for a 35% equity ownership interest, option to in-license and royalty rights on future products developed by Altus.
Subsequent to the quarter, Paladin acquired Allon which was restructured under the Bankruptcy and Insolvency Act (Canada) and under the Canada Business Corporations Act. All pre-existing issued and outstanding shares and other securities of Allon were, pursuant to the Court Order, cancelled without payment or other consideration.
(1)EBITDA - Non-IFRS Financial Measures
The term EBITDA (earnings before interest, taxes, depreciation and amortization) does not have any standardized meaning under International Financial Reporting Standards ("IFRS") and therefore may not be comparable to similar measures presented by other companies. The Company defines EBITDA as earnings before interest expense, other expense (income), taxes, depreciation and amortization, foreign exchange gains (losses), share of net income (loss) in associates and joint venture and unusual items; such as write-downs and gains (losses) on intellectual property and investments. EBITDA is calculated and presented consistently from period to period and agrees, on a consolidated basis, with the amount disclosed as "Earnings before under-noted items" on the consolidated statements of income. The Company believes EBITDA to be an important measurement that allows it to assess the operating performance of its ongoing business on a consistent basis without the impact of amortization expenses. The Company excludes amortization expenses because their level depends substantially on non-operating factors such as the historical cost of intangible assets. The Company's method for calculating EBITDA may differ from that used by other issuers and, accordingly, this measure may not be comparable to EBITDA used by other issuers.
| (3) |
IMS Brogan - moving annual total for the 12 months ended December 31, 2012 |
(2)Adjusted
The term "adjusted" refers to the proportionate consolidation of Litha and Ativa's results. Given that Litha and Ativa are being accounted for on a consolidated basis, the consolidated results include amounts attributable to minority shareholders. Consequently, adjusted results have been provided to highlight Paladin's 44.54% and 50.01% economic interest in Litha and Ativa, respectively.
Conference Call Notice
Paladin will host a conference call to discuss its second quarter results today at 10:00 a.m. EST. The dial-in number for the conference call is 1-800-736-4610 or 416-981-9000. The call will be audio-cast live and archived for 30 days at www.paladinlabs.com.
About Paladin Labs Inc.
Paladin Labs Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian and select international markets. With this strategy, a focused Canadian national sales team and proven marketing expertise, Paladin has evolved into one of Canada's leading specialty pharmaceutical companies. For more information, please visit the Company's web site at www.paladinlabs.com.
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