Lastly our extended release tramadol product that's ConZip in the U.S. and Dulera in Canada contributed $0.5 million of net revenue in Q2 2014, which was the same as reported in Q2 of 2013, however, the underlying performance of both products actually improved compared to prior year, but because non-cash revenue recognized on pre-commercial milestones declined due to an extension of useful life of the product at the end of last year. We actually reported the same net number externally.
Following, general and administrative expenses increased to $2.3 million in Q2 2014 compared with $ 1.9 million in the comparable period of last year. The year-over-year increase in SGNA was primarily a result of additional resources for business development as well as higher stock option expense due to the increase in share price compared to prior year. Research and development expenses were down modestly to $360,000 in Q2 versus $341,000 in the prior year.
Profitability continues to be very strong. EBITDA in Q2 2014 was $6.5 million an increase of 86% over prior year primarily reflecting the impact of the increase in revenue compared to Q2 of 2013.
In terms of our total product performance Q2 EBITDA was actually a record for the company after excluding a one-time Absorica commercial milestone from our Q4 2013 performance.
Net income for Q2 was $4.5 million or $0.18 per basic share, compared with net income of $3.1 million or $0.13 per basic share in Q2 2013. Net income for Q2 2014 included non-cash income tax expense of $1.4 million compared with nil in the prior year.
Excluding the impact of that non-cash tax expense, normalized net income would have been $5.9 million or $0.24 per basic share for Q2 2014.
With regard to that tax expense -- in Q4 2013 our tax assets of $6.5 million was recorded as a result of recent history of profitability to extend back to early 2012. The tax provision recorded in Q2 relates to the deferred tax asset on our balance sheet and does not reflect tax that is actually payable.
On a year-to-date basis, our results are excellent, Revenue of $16.6 million basically double the $8.8 million we reported for the same period last year. In addition EBITDA rolled is 123% to $1.9 million and net income increased by 83% to $8.4 million.
Our strong operative performance enabled us to grow our cash balance again in Q2 and we ended the quarter with $39.7 million in cash an increase of $5.2 million from Q1 of this year.
With three products in the market and no debt with strong cash position, we're well positioned to continue to execute on our growth plan.
I’ll turn over to Shawn who will discuss our products and future plans in more detail. Shawn?
Thanks Norm. Over the past six quarters Cipher has shown sequential record performance in sales EBITDA and net income on a like-for-like basis. Let me start with an update on our current portfolio beginning with our acne product isotretinoin.
As Norm mentioned, Absorica continues to perform well achieving 20.3% market share by June 24 based on total ISO prescriptions. If you recall the market share actually reached 22% at the end of March, which we attributed to especially strong sales in the 30 milligram strength as a result of supply shortage from our generic competitive.
While down to that level, product unquestionably continues to perform above our initial expectation and overall the market continues to grow.
In the 12-month period end of June 30, 2014, prescription rose by 9%. Total U.S. ISO prescription decreased in Q2 2014 compared to Q1, which is consistent with historical season pattern that we see in the coming summer months.
With respect to our peers in Canada, prescription market share rose to 11.6% by June, marking the one-year anniversary since product was launched in Canada. We expect to build our solid base through 2014 in part to expanded private and public coverage in Canada. Since achieving our arterial drug benefit formulary in March, we added no [risk] (ph) negotiate in June and managed it in mid July.
We are hopeful of gaining public formulary coverage in the remaining provinces through 2014, the main one being Coreg. In total public coverage in Canada represents approximately 16% of the ISO market, but the influences is probably coverage especially in Quebec. On the private side by the 2014, we expect to have more than 80% of all peradventures with open plants outside of Quebec.
I recently had the opportunity to attend the Canadian Dermatology Association Conference here in Taranto and conversations there underscore that our product is well differentiated and has high potential.
The overall ISO market in Canada is up 8% over last year and is almost $15 million in annual sales. I see an excellent opportunity to add products to the bag for our Canadian sales force.
With respect to our development stage derm candidate Betesil Patch we are working with our partner [Epsa] (ph) to finalize the regulatory package to submit to the Health Canada by the end of this year.
Turning to Lipofen as we discussed at last calls the pattern on this product expires in January 2015. Recall that the product has been on the market since 2007.
With this date quickly approaching and Cipher chose to pre-launch an authorized generic version of the product during Q2. For those who are not familiar with the term authorized generics are prescription drugs produced by brand pharmaceuticals companies and market under private label at generic prices. They are not prompted like typical brand products.
In our case [indiscernible] continues to prompt the brand version of Lipofen while also offering an authorized generic through their partner.
During Q2 the prescriptions were split roughly 85% brand and 15% authorized generic. Over time, we anticipate shifting towards their authorized generic.
The combined performance of the product was encouraging. Though it's too early to identify a trend, I should note that the volume of the product shipped in the quarter was exceptional, which contributed to the lift in Q2 revenue.
Now turning to our extended release tramadol product, in Q2 ConZip prescription increased by 11% compared to the same period last year and in Canada sales of Durela were 73% higher than the same period last year. While off a small base, we are encouraged by the growth trend over the past four quarters.
Now looking ahead Cipher is exceptionally well positioned for growth. This was a big factor in my decision to lead this company. The balance sheet is strong we are generating meaningful cash each quarter from the current portfolio.
We have a small, but high performing team that has succeeded in economically bringing new products to the market, which is not a small task from my experience.
In fact Cipher has been able to invest only $60 million total RND dollars over the years to bring these two products to the Canadian and U.S. markets and generate over $540 million in cumulative net retail sales in U.S. and Canada for all three products through our partners and through our peers sales team.
We have a clear mandate to grow our product portfolio and are pursuing a multiple pronged strategy. First using our established infrastructure in Canada we will add products to product devolvement or acquisitions. That will be our obvious focus initially.
Second, using our proven clinical developmental capabilities to licence in and develop early and late stage assets for North America and we will expand our commercial infrastructure in the U.S. and Canada accordingly. The opportunities we pursue will continue to be especially Pharma based.
And third leveraging our regulatory approvals in U.S. and Canada we will continue to pursue licence agreement and other markets for our ISO product line in markets where we will have attractive pricing opportunity.
In executing these strategies we will consider acquisitions of specific products and of companies. I look forward updating you on our progress at the end of the next quarter at the latest.
Thank you operator and now over to you for the questions.
(Operator instructions) Your first question comes from the line of David Dean with Cormark Securities. Your line is open.
David Dean - Cormark Securities Inc.
Thanks for the call and congratulations on a good quarter. You talked about expanding into the U.S. as it relates to operation. What do you envision there Shawn?
Shawn Patrick O'Brien - President and CEO
Thanks David. Our strategy there is to acquire companies or products that will be accretive within the first two years in the specialty Pharma space.
David Dean - Cormark Securities Inc.
Okay, I know it's still extremely early days for you, but has there been any progress on that front? Have you started a kind of prospecting effort or anything like that?
Shawn Patrick O'Brien - President and CEO
The team is fully engaged on driving activities in this area.
David Dean - Cormark Securities Inc.
Okay, and how would you envision financing something like that specifically would you consider using that or how would you structure them?
Shawn Patrick O'Brien - President and CEO
Obviously the financing has to be reflective of the assets of the company that you end up doing the deal with and reflective of the relative risks with it. So that can be used obviously depending on the cash flow you can generate from the future sales of the products and equity accordingly for the relative risk of the portfolio.
David Dean - Cormark Securities Inc.
Okay. As far as Lipofen is concerned as far as the branded generic for the authorized generics, how do you think we should think about this going forward like should be use a blended price for a market share or what would you guide us to do?
Norman Evans - CFO
In terms of your forecasting going forward.
David Dean - Cormark Securities Inc.
Yes like…
Norman Evans - CFO
We see a continuous trend to an increase in the authorized generic as a percentage of market share it was about [85 15] (ph) between the brand in the AG during the quarter, but again this is a just launch period.
So it's little early for us to give any specific guidance on that at this point in time. We are going to track and see how things move over the next quarter or so, but definitely it will be a change in that mix moving towards the authorized generic over time.
David Dean - Cormark Securities Inc.
And are you seeing anything about relative pricing?
Shawn Patrick O'Brien - President and CEO
Well I guess, the best thing on pricing what I can tell you is if you look back on the market for Lipofen brand and look what happened to the pricing over the last two years and the authorized generic priced is below that you can see that there has been healthy price increases for the brand in the market place over the last 24 months. So that's given the opportunity for good pricing for the authorized generic going forward.
David Dean - Cormark Securities Inc.
Okay just two more questions. You are burning to your tax losses what would you envision as far as tax strategy going forward.
Shawn Patrick O'Brien - President and CEO
Well I wouldn’t call burning through, we are using the -- I would see those tax losses lasting through 2015 and into 2016.
We are looking at different strategies, but it is going to be tied to whatever acquisitions we make going down the road and we are going to do the right tax strategy for whatever that involves whether its an M&A, whether it’s a product acquisitions, and the jurisdiction and the nature of the product. So its going to be a well plotted tax strategy. We've done a lot of preparation for it, but in my opinion you don’t trigger a tax strategy until you know what you are dealing with and that’s our game plan going forward.
Norman Evans - CFO
And, David it's fair to say, our tax strategy is to be efficient.
David Dean - Cormark Securities Inc.
Okay. One last one, what was the exchange rate that you realized during the quarter?
Shawn Patrick O'Brien - President and CEO
The quarter rate was [1.0676] (ph) the average for the quarter would have been in about 1.8 range.
Norman Evans - CFO
If your question is relative to Q1 it was about two points lower.
David Dean - Cormark Securities Inc.
Okay. Thank you very much guys. Good quarter.
Shawn Patrick O'Brien - President and CEO
Thank you.
Operator
Your next question comes from the line of Douglas Loe with Euro Pacific Canada. Please go ahead.
Douglas Loe - Euro Pacific Canada
Thanks very much and good morning gentlemen. Congratulations on financial results in the quarter. Just a couple of fall of follow-up questions from me.
Shawn, you were certainly aware that Latin American and Asia Pacific markets are targetable partnerable market attractive for Cipher. I was just wondering if you can may be -- now that U.S. Canada, Chilly and Brazil are either at commercial stage or about to be, can you just kind of prioritize for us what the residual target markets might be and what timeframe you think that regulatory filings could be consummated with subjective partnership discussion? Just some color around how you are thinking about all residual markets would be helpful there?
And then second of all we're encouraged to hear that betazole filing was eminent and even into of course by yearend; you haven’t talked about that product since it was originally acquired a couple of years ago. I wondered if you just may be flush out what the commercial opportunities could be there and what timeframe you would expect regulatory review and product launch and I'll leave it there? Thanks.
Shawn Patrick O'Brien - President and CEO
So on your first question Doug, on the residual market, I assume this is for ISO in particular we would like to penetrate where attractive to rest of the South American markets and Latin American markets and elsewhere we don’t really see a significant opportunity for the product in other regions of the world based on the pricing that I have seen so far.
So if I could answer your Betazole, our customer feedback on this compound as a patch for psoriasis has been very positive and we think it has a great opportunity here in the Canadian marketplace and so we are taking the actions to ensure our program will be submitted to the authorities by the end of the year and that should result in an approval which would give us a launch in the first quarter of 2016 if everything goes to plan.
Douglas Loe - Euro Pacific Canada
Okay, so any sort of changes in your own physician surveys or market intelligence that changed your mind on whether that was sufficiently attractive product to launch or just some of the elements that you have been considering so that you have now decided to file?
Shawn Patrick O'Brien - President and CEO
I don’t think anything changed my mind because I didn't have an opinion before I came here Doug. I looked at the data that the team is sharing the data with me and what they thought they could do with it and it’s an attractive opportunity for the company.
Douglas Loe - Euro Pacific Canada
Okay. That’s great. Thanks Shawn.
Operator
Your next question comes from the line of Jason Napodano with Zacks. Please go ahead.
Jason Napodano - Zacks Investment Research
Good morning guys. Congrats on a great quarter.
Shawn Patrick O'Brien - President and CEO
Thank you.
Jason Napodano - Zacks Investment Research
Just from a modeling standpoint trying to get a sense of the upfront payment for Brazil or pre-commercialization milestones from you agreement in Brazil and then get a sense of where Ranbaxy is with regard to that filing in Brazil.
Shawn Patrick O'Brien - President and CEO
So the way the deals in Latin America structured are not royalty based. So we get a margin on cost of good sold with regard to the Ranbaxy transaction for Brazil, we did not disclose the amount of the milestone. There are three commercial milestones under the arrangement, but they have been disclosed.
Jason Napodano - Zacks Investment Research
Okay, that's quick and better purposes. But the deals are structured as not as royalty, which we have historically done, but as mark-ups on finished product deliveries ?
Shawn Patrick O'Brien - President and CEO
So we will see some sought of upfront payment booked in the third quarter.
Norman Evans - CFO
Yes on the cash receipts, yes.
Shawn Patrick O'Brien - President and CEO
And because these are pre-commercial, they will not go into income immediately. They will be amortized over the life of the product consistent with our accounting treatment with that.
Jason Napodano - Zacks Investment Research
Okay. And where are they in terms of their filing?
Shawn Patrick O'Brien - President and CEO
I think the timing of the filing we are looking at the year for approval.
Shawn Patrick O'Brien - President and CEO
There are different CMC requirements for those market and that were being finished up. So the filing I don’t think will happen il next year and with the approval to get in the market into 2016-2017 timeframe.
Jason Napodano - Zacks Investment Research
Okay. And in terms of year desire to in-license products in the U.S. Shawn you mentioned the stuff that was accretive in the next may be one or two years, but I though also I heard you say you would potentially in-licence early stage stuff. So just want to get a sense of those two things, How much R&D are you guys willing to do on a U.S. product if you find something attractive.
Shawn Patrick O'Brien - President and CEO
So, trying to answer your question. One being accretive within two-year timeframe you got that right and two on earlier stage assets as I highlighted if you look at the amount of money that factors invested in RND including the money that are partners put into it is $60 million over the period of the life of the company and that's generated $540 million in the marketplace so far and ISO continues to grow rapidly and we ISO continue to grow in the forecast period significantly.
And that’s remarkably efficient machine compared to some of the other machines I have had the opportunity to operate over the past and in fact leverage of that efficiency and effectiveness that I want to ensure that we use going forward and so as far as doing RND obviously we are not going to do anything that category unless we see there is a sustainable as a first in class or best in class opportunity in the specially pharma area.
Jason Napodano - Zacks Investment Research
Okay. And then just last question. Tax inversion are big topic here in the US. Especially in specialty Pharma just curious as your thoughts on that if you are involved in any discussion you guys are already in outside the U.S. I don’t know just in terms of the strategy as a whole is there something that Cipher is considering or being approached by?
Shawn Patrick O'Brien - President and CEO
Well as we said I think in one of the pervious questions, we are in the more tax efficient jurisdiction on the cooperation standpoint based being a Canadian entity and that can give us opportunity to get assets that we can leverage more effectively than maybe other people can that can be accretive faster than other people can from the tax standpoint, but the bottom line is we're just focused on building this company on quality and having an efficient tax plan to drive back quality through.
Jason Napodano - Zacks Investment Research
All right. Thanks for taking the questions.
Operator
There are no further questions at this time. I'll turn the call back to Mr. O’Brien.
Shawn Patrick O'Brien - President and CEO
Well thank you everyone for listening to our Q2 earnings. We are delighted with the results and look forward to working with you in the future. Have a good day.