Quarterly financials...$185 million cad in cash
QLT loses $4.93-million (U.S.) in Q3
2014-10-28 07:10 ET - News Release
An anonymous director reports
QLT ANNOUNCES THIRD QUARTER 2014 RESULTS
QLT Inc. released financial results today for the third quarter ended Sept. 30, 2014. Unless otherwise specified, all amounts are reported in U.S. dollars and in accordance with U.S. GAAP.
2014 THIRD QUARTER FINANCIAL RESULTS
QLT Expenses
Research and Development (R&D) expenses relate to QLT's synthetic retinoid program. During the third quarter of 2014, QLT incurred R&D expenses of $2.8 million compared to $5.2 million for the same period in 2013. The net $2.4 million decrease was primarily due to higher costs incurred in 2013 related to certain toxicity studies, which commenced in the second half of 2013, and our Leber Congenital Amaurosis and Retinitis Pigmentosa Phase Ib retreatment study, which was substantially completed in 2013. The period-over-period decrease in R&D expenditures was further positively affected by savings realized in 2014 related to the continuing impact of our 2012 workforce reduction and other restructuring activities.
During the third quarter of 2014, Selling, General and Administrative (SG&A) expenses were $2.4 million compared to $1.7 million for the same period in 2013. The net $0.7 million increase in SG&A expenses was primarily due to $1.2 million of consulting and transaction fees incurred in connection with the proposed merger with Auxilium Pharmaceuticals, Inc. ("Auxilium") described below. These costs were partially offset by net overall savings realized in 2014 related to the continuing impact of our 2012 workforce reduction and other restructuring activities.
Operating Losses and Loss per Share
The operating loss for the third quarter of 2014 was $5.4 million compared to $7.5 million for the same period in 2013. The net $2.1 million decrease in operating losses is primarily due to lower R&D and restructuring expenses. These cost savings were partially offset by $1.2 million of consulting and transaction fees incurred during the period in connection with the proposed merger with Auxilium.
Loss per share from continuing operations was $0.10 in the third quarter of 2014 compared to $0.14 in the same period in 2013. The decrease in loss per share is due to the same factors described above, as well as a $0.4 million income tax recovery recorded in connection with a decrease in our provision for uncertain tax positions due to the expiration of the statute of limitations.
Cash and Cash Equivalents
As at September 30, 2014, the Company's consolidated cash and cash equivalents were $137.8 million compared to $118.5 million of cash and cash equivalents at the end of 2013. The increase was primarily due to $38.1 million of proceeds received from Tolmar in connection with the Eligardtrademark related contingent consideration, which was partially offset by cash used in operating activities.
Termination of Merger Agreement with Auxilium
As previously reported, on October 8, 2014, Auxilium terminated the Agreement and Plan of Merger dated June 25, 2014 (the "Merger Agreement") among QLT, Auxilium, QLT Holding Corp. and QLT Acquisition Corp. The Merger Agreement contemplated a business combination whereby Auxilium would have become an indirect wholly-owned subsidiary of QLT (the "Combined Company") and Auxilium's stockholders would have received common shares representing approximately 76% of the Combined Company. On October 8, 2014, Auxilium terminated the Merger Agreement after receiving from Endo International plc what Auxilium's board of directors determined to be a "superior proposal" to acquire all of the issued and outstanding shares of Auxilium. In accordance with the termination provisions of the Merger Agreement, on October 9, 2014, Auxilium paid QLT a termination fee of $28.4 million. On October 22, 2014, pursuant to the terms of our financial advisory services agreement with Credit Suisse, our financial advisor in the transaction, we paid Credit Suisse a fee of $5.7 million in connection with the termination of the Merger Agreement.
Passive Foreign Investment Company
The Company believes that it was classified as a Passive Foreign Investment Company (PFIC) for 2008 through 2013, and that it may be classified as a PFIC in 2014, which could have adverse tax consequences for U.S. shareholders. Please refer to our 2013 Annual Report on Form 10-K for additional information. QLT Inc. - Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS In accordance with United Stated generally accepted accounting principles (Unaudited) Three months ended Nine months ended September 30, September 30, (In thousands of U.S. dollars except share and per share amounts) 2014 2013 2014 2013 Expenses Research and development $ 2,792 $ 5,243 $ 11,684 $ 13,715 Selling, general and administrative 2,388 1,676 8,642 5,568 Depreciation 222 230 680 717 Restructuring charges -- 354 744 1,847 5,402 7,503 21,750 21,847 Operating loss (5,402) (7,503) (21,750) (21,847) Investment and other (expenses) income Net foreign exchange losses -- (54) (74) (36) Interest income 27 39 80 175 Fair value change in contingent consideration -- 71 1,466 1,904 Other 17 64 115 100 44 120 1,587 2,143 Loss from continuing operations before income taxes (5,358) (7,383) (20,163) (19,704) Recovery of (provision for) income taxes 432 (109) 194 (434) Loss from continuing operations (4,927) (7,492) (19,969) (20,138) (Loss) income from discontinued operations, net of income taxes (6) 96 (63) 116 Net loss and comprehensive loss $ (4,932) $ (7,396)($20,032) $ (20,022) Basic and diluted net loss per common share Continuing operations ($0.10) ($0.15) ($0.39) ($0.40) Discontinued operations (0.00) 0.00 (0.00) 0.00 Net loss per common share ($0.10) ($0.14) ($0.39) ($0.39) Weighted average number of common shares outstanding (in thousands) Basic and diluted 51,151 51,082 51,105 50,851
We seek Safe Harbor.