QLT Inc. (Nasdaq:QLTI) (TSX:QLT) ("QLT" or the "Company") is a
biotechnology company dedicated to the development and
commercialization of innovative ocular products that address the
unmet medical needs of patients and clinicians worldwide. The
Company today reported financial results for the third quarter
ended September 30, 2013. Unless specified otherwise, all amounts
are in U.S. dollars and in accordance with U.S. GAAP.
2013 THIRD QUARTER FINANCIAL RESULTS
QLT Expenses / Other Income
Research and Development (R&D) expenses relate to QLT's
synthetic retinoid program. During the third quarter of 2013,
R&D expense was $5.2 million compared to $5.6 million for the
same period in 2012. The $0.4 million decrease was primarily due to
savings from the Company's 2012 R&D workforce reduction.
During the third quarter of 2013, Selling, General and
Administrative (SG&A) expense was $1.7 million compared to $2.7
million for the same period in 2012. The $1.0 million decrease was
primarily due to savings from the Company's 2012 restructuring
initiatives.
Operating Loss
The operating loss for the third quarter of 2013 was $7.5
million, compared to an operating loss of $19.9 million recorded
during the same period in 2012. The $12.4 million improvement in
operating results is primarily due to restructuring charges
recorded in 2012 and savings related to the 2012 restructuring
initiatives.
Income from Discontinued Operations, Net of Income
Taxes
During the third quarter of 2013, we earned $0.1 million of
income from discontinued operations, net of income taxes, compared
to $94.1 million for the same period in 2012. The decrease was
primarily due to a pre-tax gain of $101.4 million related to the
divestment of the Visudyne® business in the third quarter of
2012.
(Loss) / Income Per Share
Loss per share from continuing operations was $0.15 in the third
quarter of 2013 compared to a loss per share from continuing
operations of $0.25 in the third quarter of 2012. The improvement
was primarily due to restructuring charges recorded in 2012 and
savings related to the 2012 restructuring initiatives. These
improvements were partially offset by a lower gain from the Fair
Value Change in Contingent Consideration in the current period, as
well as the 2012 income tax recovery resulting from the recognition
of the tax benefit of our operating losses from continuing
operations.
Income per share from discontinued operations was negligible in
the third quarter of 2013 compared to income per share from
discontinued operations of $1.86 in the third quarter of 2012,
which was primarily due to the $101.4 million pre-tax gain related
to the sale of our Visudyne business.
Cash and Cash Equivalents
As at September 30, 2013, the Company's consolidated cash
balance consisted of $114.1 million of cash and cash equivalents,
down from $307.4 million of cash and cash equivalents at the end of
2012. The decrease was largely due to the $200 million special cash
distribution to the Company's shareholders, which was completed in
June 2013, partially offset by $7.5 million of funds that were
released to us from escrow on September 26, 2013. During the third
quarter of 2013, proceeds received in connection with collection of
the Eligard Contingent Consideration totaled $9.3 million ($28.2
million collected during the nine months ended September 30, 2013).
In addition, we still have up to $48.6 million of Eligard
Contingent Consideration remaining to be collected.
Passive Foreign Investment Company
The Company believes that it was classified as a Passive Foreign
Investment Company (PFIC) for 2008 – 2012, and that it may be
classified as a PFIC in 2013, which could have adverse tax
consequences for U.S. shareholders. Please refer to our Annual
Report on Form 10-K for additional information.
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QLT Inc. - Financial
Highlights |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
INCOME |
In accordance with United States
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 information) |
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Expenses |
|
|
|
|
Research and development |
$5,243 |
$5,639 |
$13,715 |
$19,621 |
Selling, general and
administrative |
1,676 |
2,669 |
5,568 |
12,648 |
Depreciation |
230 |
238 |
717 |
927 |
Restructuring
charges |
354 |
11,402 |
1,847 |
11,402 |
|
7,503 |
19,948 |
21,847 |
44,598 |
|
|
|
|
|
Operating loss |
(7,503) |
(19,948) |
(21,847) |
(44,598) |
|
|
|
|
|
Investment and other
income |
|
|
|
|
Net foreign exchange gains
(losses) |
(54) |
65 |
(36) |
(84) |
Interest income |
39 |
59 |
175 |
147 |
Fair value change in contingent
consideration |
71 |
2,840 |
1,904 |
6,432 |
Other gains |
64 |
21 |
100 |
102 |
|
120 |
2,985 |
2,143 |
6,597 |
|
|
|
|
|
Loss from continuing operations
before income taxes |
(7,383) |
(16,963) |
(19,704) |
(38,001) |
|
|
|
|
|
(Provision for) Recovery of
income taxes |
(109) |
4,345 |
(434) |
3,798 |
Loss from continuing
operations |
(7,492) |
(12,618) |
(20,138) |
(34,203) |
|
|
|
|
|
Income from discontinued operations,
net of income taxes |
96 |
94,078 |
116 |
89,082 |
|
|
|
|
|
Net (loss) income and
comprehensive (loss) income |
($7,396) |
$81,460 |
($20,022) |
$54,879 |
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|
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Basic and diluted net (loss) income
per common share |
|
|
|
|
Continuing operations |
($0.15) |
($0.25) |
($0.40) |
($0.69) |
Discontinued
operations |
$0.00 |
$1.86 |
$0.00 |
$1.80 |
Net (loss) income per
common share |
($0.14) |
$1.61 |
($0.39) |
$1.11 |
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|
|
|
Weighted average number of common
shares outstanding (thousands) |
|
|
|
|
Basic and diluted |
51,082 |
50,600 |
50,851 |
49,592 |
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QLT Inc. - Financial
Highlights |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
In accordance with United States
generally accepted accounting principles |
(Unaudited) |
(In thousands of U.S. dollars) |
September 30,
2013 |
December 31, 2012 |
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ASSETS |
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|
Current assets |
|
|
Cash and cash equivalents |
$ 114,086 |
$ 307,384 |
Restricted cash |
-- |
7,500 |
Accounts receivable |
755 |
3,960 |
Contingent consideration -
current |
40,557 |
41,255 |
Income taxes receivable |
404 |
554 |
Deferred income tax assets -
current |
316 |
644 |
Assets held for sale |
-- |
300 |
Prepaid and other |
1,705 |
1,442 |
Total current assets |
157,823 |
363,039 |
|
|
|
Property, plant and
equipment |
2,180 |
2,655 |
Deferred income tax assets -
non-current |
195 |
370 |
Contingent consideration -
non-current |
9,569 |
35,154 |
Total assets |
169,767 |
401,218 |
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LIABILITIES |
|
|
Current liabilities |
|
|
Accounts payable |
3,924 |
$6,121 |
Accrued liabilities |
1,407 |
2,515 |
Accrued restructuring
charge |
249 |
1,933 |
Deferred income |
-- |
456 |
Total current
liabilities |
5,580 |
11,025 |
|
|
|
Uncertain tax position
liabilities |
1,874 |
1,875 |
Total liabilities |
7,454 |
12,900 |
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SHAREHOLDERS' EQUITY |
|
|
Share capital |
|
|
Authorized |
|
|
500,000,000 common shares
without par value |
|
|
5,000,000 first preference
shares without par value, issuable |
|
|
in series |
Issued and outstanding |
466,229 |
471,712 |
Common shares |
|
|
September 30, 2013 – 51,081,878
shares |
|
|
December 31, 2012 – 51,589,405
shares |
|
|
Additional paid-in
capital |
95,524 |
296,024 |
Accumulated deficit |
(502,409) |
(482,387) |
Accumulated other comprehensive
income |
102,969 |
102,969 |
Total shareholders'
equity |
162,313 |
388,318 |
Total shareholders' equity and
liabilities |
$ 169,767 |
$ 401,218 |
About QLT
QLT is a biotechnology company dedicated to the development and
commercialization of innovative ocular products that address the
unmet medical needs of patients and clinicians worldwide. We are
focused on developing our synthetic retinoid program for the
treatment of certain inherited retinal diseases.
QLT's head office is based in Vancouver, Canada and the Company
is publicly traded on NASDAQ Stock Market (symbol: QLTI) and the
Toronto Stock Exchange (symbol: QLT). For more information about
the Company's products and developments, please visit our web site
at www.qltinc.com.
Visudyne® is a registered trademark of Novartis AG Eligard® is a
registered trademark of Sanofi S.A.
Certain statements in this press release constitute
"forward-looking statements" of QLT within the meaning of the
Private Securities Litigation Reform Act of 1995 and constitute
"forward-looking information" within the meaning of applicable
Canadian securities laws. Forward-looking statements include, but
are not limited to: statements concerning our PFIC status; and
statements which contain language such as: "assuming," "prospects,"
"goal," "future," "projects," "potential," "believes," "expects,"
"hopes," and "outlook." Forward-looking statements are predictions
only which involve known and unknown risks, uncertainties and other
factors that may cause actual results to be materially different
from those expressed in such statements. Many such risks,
uncertainties and other factors are taken into account as part of
our assumptions underlying these forward-looking statements and
include, among others, the following: the Company's future
operating results are uncertain and likely to fluctuate; currency
fluctuations; the risk that sales of Visudyne or Eligard may be
less than expected thereby impacting our contingent consideration;
the risk that we may not receive any or as much additional
contingent consideration as we might expect under our agreements
with respect to the sale of Visudyne, Eligard and the PPDS
Technology; risks and uncertainties concerning the impacts that
QLT's strategic initiatives will have on the market price of our
securities; risks resulting from recent changes in personnel;
uncertainties relating to our development plans, timing and results
of the clinical development and commercialization of our products
and technologies; assumptions related to continued enrollment
trends, efforts and success, and the associated costs of these
programs; outcomes for our clinical trials may not be
favorable or may be less favorable than interim/preliminary results
and/or previous trials; there may be varying interpretations of
data produced by one or more of our clinical trials; risks and
uncertainties associated with the safety and effectiveness of our
technology; the timing, expense and uncertainty associated with the
regulatory approval process for products to advance through
development stages; risks and uncertainties related to the scope,
validity, and enforceability of our intellectual property rights
and the impact of patents and other intellectual property of third
parties; and general economic conditions and other factors
described in detail in QLT's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and other filings with the U.S. Securities and
Exchange Commission and Canadian securities regulatory
authorities. Forward-looking statements are based on the
current expectations of QLT and QLT does not assume any obligation
to update such information to reflect later events or developments
except as required by law.
This press release also contains "forward looking information"
that constitutes "financial outlooks" within the meaning of
applicable Canadian securities laws. This information is provided
to give investors general guidance on management's current
expectations of certain factors affecting our business, including
our financial results. Given the uncertainties, assumptions and
risk factors associated with this type of information, including
those described above, investors are cautioned that the information
may not be appropriate for other purposes.
CONTACT: QLT Inc. Contacts:
Investor & Media Relations
Andrea Rabney or David Pitts
Argot Partners
212-600-1902
andrea@argotpartners.com
david@argotpartners.com
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