(All figures are in U.S. dollars)
- Drove 60% increase in EPS to $0.08
- Demonstrated a focus on execution as EBITDA increased 38% to $3.1 million
- Total operating expenses declined 25% to $2.5 million
- Bolstered isotretinoin portfolio through extended distribution and supply agreement with Sun Pharmaceutical to December 31, 2026
- Partner, Moberg Pharma AB, submitted regulatory filling for clinical Phase 3 study
- Strong balance sheet with $21.9 million in cash at March 31, 2022
MISSISSAUGA, ON, May 12, 2022 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: CPH) ("Cipher" or "the Company") today announced its financial and operating results for the three months ended March 31, 2022. Unless otherwise noted, all figures are in U.S. dollars.
Q1 2022 Financial Highlights
(All figures in U.S. dollars, compared to Q1 2021, unless otherwise noted)
- As at March 31, 2022, the Company had $21.9 million (CDN$27.31 million) in cash or $0.85(CDN$1.06) per share
- 463,100 shares were repurchased and cancelled under the Normal Course Issuer Bid at an average price of CDN$2.05
- Total operating expenses decreased 25% to $2.5 million, compared to $3.4 million
- EBITDA2 increased 38% to $3.1 million, compared to $2.2 million
- Net income increased to $2.1 million from $1.3 million
- Earnings per common share increased 60% to $0.08 from $0.05
Management Commentary
Craig Mull, Interim CEO commented, "We are pleased to report that our first quarter results delivered a meaningful increase in profitability, highlighted by a 60% increase in our earnings per share. Our strong results have been driven by our reduced cost structure in addition to improved distribution and supply agreements."
Through 2021 and continuing into 2022, a key focus for Cipher was to negotiate extended distribution and supply agreements with key partners for the Company's portfolio, with an emphasis on improving visibility and long-term profitability. During the first quarter, Cipher announced an extension of the distribution and supply agreement with Sun Pharmaceutical Industries ("Sun Pharma") through December 31, 2026. This extension will provide Cipher with an additional four years of visibility into stable revenue and cashflow on the isotretinoin portfolio.
In March, the Company's partner, Moberg Pharma AB, ("Moberg") submitted a regulatory filing for the next clinical Phase 3 study for MOB-015 (nail fungus treatment) to the U.S. Food and Drug Administration ("FDA"). Cipher holds the exclusive Canadian rights to MOB-015. In Canada, according to IQVIA, the total prescription market for Onychomycosis was greater than $75 million CDN at December 31, 2021, with a single product having over 90% market share.
Commenting on the Moberg filing, Mr. Mull said, "We are pleased to see the continued progress that Moberg is making to commercialize MOB-015. The product is showing promising results and we look forward to competing in this large market with an innovative topical product that would provide a new safe and effective treatment option for the many Canadians who suffer from this common nail infection."
"With disciplined cost reductions and the extension of the agreement with Sun Pharma, we believe that that Cipher now has a stable runway for growth. Aligned with our stated strategy, we remain focused on identifying and evaluating profitable product and company acquisitions that will accelerate our growth and drive shareholder value and are continuing to build cash reserves in anticipation of such transactions," concluded Mr. Mull.
Q1 2022 Financial Review
(All figures are in U.S. dollars)
Total revenue was $5.4 million for Q1 2022, compared to $5.4 million for Q1 2021.
Licensing revenue was $2.1 million for the three months ended March 31, 2022, compared to $2.8 million for the three months ended March 31, 2021.
Licensing revenue from Absorica in the US was $1.4 million for the three months ended March 31, 2022, a decrease of $0.9 million or 39% compared to $2.3 million for the three months ended March 31, 2021. Licensing revenue in Q1 2021 contained a full quarter of Brand Absorica sales. Absorica's market share was approximately 4.3% compared to 4.2% for the Q1 2021, according to Symphony Health. Market share including Sun's Absorica LD was approximately 5.2%.
Licensing revenue from Lipofen and the authorized generic version of Lipofen was $0.7 million for Q1 2022, a 73% increase compared to revenue of $0.4 million for Q1 2021.
Product revenue increased by $0.6 million or 24% to $3.3 million for Q1 2022, compared to $2.7 million for the comparable period in 2021. Product revenue from Epuris was $3.1 million for Q1 2022, an increase of 19% from $2.6 million in the comparative period.
Product revenue for Ozanex, Beteflam, Actikerall, Brinavess, Aggrastat and Vaniqa was $0.2 million for Q1, 2022, compared to $0.1 million for the three months ended March 31, 2021.
Selling, general and administrative expenses were $1.3 million for Q1 2022, compared to $1.2 million for Q1 2021.
Total operating expenses were $2.5 million for Q1 2022, compared to $3.4 million for Q1 2021.
Net income was $2.1 million, or $0.08 per basic and diluted share, in Q1 2022, compared to $1.3 million, or $0.05 per basic and diluted share, in Q1 2021. Adjusted EBITDA for Q1 2022 was $3.1 million, compared to $3.6 million in Q1 2021.
The Company had $21.9 million in cash and no debt at March 31, 2022. The Company generated $2.1 million in cash from operating activities for the three months ended March 31, 2022.
Outlook
Cipher anticipates several key milestones in 2022 that will continue to enhance long term value, including:
- Full-year benefit of the cost reduction plan
- Reinforced commitment to our hospital business with a distribution partnership that is expected to result in improved growth and profitability
- Collaboration with Galephar on key products in the Lucy product portfolio
- Continue to repurchase shares for cancellation under our normal course issuer bid
- Work closely with Moberg on continued development of MOB-015
- Selectively pursue product and business acquisitions in a prudent manner with a focus on high growth potential and near-term profitability
Financial Statements and MD&A
Cipher's Financial Statements for the year ended March 31, 2022, and Management's Discussion and Analysis (the "MD&A") for the three months ended March 31, 2022, 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 May 13, 2022, at 8:30 a.m. (ET) to discuss its financial results and other corporate developments.
- To access the conference call by telephone, dial (647) 484-0477 or (888) 458-4121 and use conference 6137413.
A live audio webcast will be available at https://produceredition.webcasts.com/starthere.jsp?ei=1548662&tp_key=a2eab0e46f
- or the Investor Relations section of the Company's website at https://www.cipherpharma.com.
- An archived replay of the webcast will be available until May 20, 2022.