Worth ReadingThere are not any fundamental performance on the Cipher business we are delivering that warrant any reduction in share price. We are ahead of budget, continue to execute our plan, generate cash and invest in our growth products.
As you know as a Cipher investor, just 14 months ago Cipher's growth strategy was in question. No products in the pipeline, while Epuris sales in Canada were growing rapidly, Absorica sales in the U.S. had started to plateau, and the risk of the paragraph-4 litigation on Absorica created doubt on Absorica sales beyond the first half of 2016.
We needed to leverage our strong cash position to create a brighter future for Cipher. So far in 2015 we have closed seven deals to deliver on our growth strategy and have de-risked the Absorica litigation, while continuing to grow Epuris in Canada, up 102% Q-2 YTD 2015 over 2014 in Canadian currency.
Our rationale to purchase Innocutis on April 13, 2015 with 31 sales territories, was;
1) to accelerate the sales of Sitavig and Nuvail through prudent sales and marketing programs. While I can not comment on sales of Sitavig since Q-2, I can share that the monthly prescriptions (available publicly) are up 30% in July over June. We have taken recent price increases for both Nuvail and Sitavig that make them more market competitive. And we see that with the current U.S. Business, we will become accretive before 2 years, ie) by the end of 2016. We expect Sitavig sales to surpass $100 Million in 2020 and Nuvail to be north of $30 million in 2020
2) launch products available for the USA in our portfolio, such as Dermadexin and Pruridexin, both which have been recently accepted for review by the FDA as 510-k medical devices. Assuming success with the FDA in gaining approval, we expect to launch both of these products in the first half in the USA with our sales and marketing team. These launches will accelerate the timeline to accretion for our U.S. business, as we expect combined sales of $40 Million by 2020.
3) having US sales and marketing infrastructure now allows us to bid on other dermatology assets for continued growth.
However, we recently received approval for Absorica/Epuris 10 & 30mg in Chile, which we expect our partner to launch in Q-4.
With the seven deals completed so far in 2015, we now see an ability to deliver 5x5 growth strategy with our current portfolio of products by 2020:
1) Deliver $50 Million Canadian sales for our dermatology franchise in Canada.
2) deliver $250 Million U.S. With our dermatology franchise in the USA
3) Deliver $50 Million Canadian in our royalty sales through our partners
4) expand our NA portfolio by 5 products - we have added 14 already
5) Launch 2 new products that are not copy cats. - we have 3 in our portfolio.
Our business is in an investment phase, however we continue to generate a net positive cash flow from operations, and we invest that cash into the growth products we have for Canada and USA.
Delivering on this portfolio potential will allow us to generate over $120,000,000 in EBITDA in 2020.