Cipher Pharmaceuticals Inc. (TSX: DND) today announced its financial and operational results for the three months ended March 31, 2010.
Q1 2010 Summary ---------------
- Total revenue increased 52% to $0.9 million, driven by growth of Lipofen(R) prescriptions. - Net loss narrowed to $0.5 million, or $0.02 per share, compared with a loss of $0.8 million, or $0.03 per share, in Q1 2009. - Reached enrolment mid-point of CIP-ISOTRETINOIN Phase III safety trial. - Received favourable summary judgement motion for CIP-TRAMADOL ER, lifting 30-month stay of approval. - New Drug Submission ("NDS") for CIP-TRAMADOL ER accepted for review by Health Canada. - Strong balance sheet at quarter end with cash of $9.1 million and no debt, compared with cash of $9.0 million at December 31, 2009.
"Lipofen(R) prescriptions have grown solidly in recent quarters with the increased promotion behind the product, which drove a strong year-over-year increase in our revenue and enabled us to narrow our operating loss," said Larry Andrews, President and CEO of Cipher. "The first quarter was highlighted by the achievement of our 50% enrolment milestone in the Phase III safety trial for CIP-ISOTRETINOIN. More than 500 patients are currently enrolled and the trial continues to progress well. We also received a favourable judgment related to patent litigation on our extended-release tramadol, enabling us to move forward with final FDA approval. In addition, we advanced our plans to target additional markets for our existing products as we received notice that our New Drug Submission to Health Canada for CIP-TRAMADOL ER was accepted for review."
Financial Review ----------------
Total revenue in Q1 2010 was $0.9 million, compared with $0.6 million in Q1 2009. The improved performance reflects the continued market penetration by Lipofen(R) as Kowa increases the sales and promotion effort behind the product.
Gross Research and Development ("R&D") expenditures for Q1 2010 rose to $4.1 million, compared with $0.3 million in Q1 2009, driven by the CIP-ISOTRETINOIN clinical study. The reported R&D expenditure amount of $0.3 million for Q1 2010 is net of $3.8 million of reimbursed expenses by Cipher's U.S. marketing partner. Operating, General and Administrative ("OG&A") expenses for Q1 2010 were $1.0 million, consistent with the prior year. The loss for the three months ended March 31, 2010 decreased to $0.5 million ($0.02 per basic and diluted share), compared with a net loss of $0.8 million ($0.03 per basic and diluted share) in Q1 2009.
The Company's financial position remained solid at quarter-end. As at March 31, 2010, Cipher had cash of $9.1 million, compared with $9.0 million as at December 31, 2009.
Product Update --------------
During Q1 2010, Lipofen(R) monthly prescriptions showed steady growth, as Kowa increases coverage of the primary care physicians in its targeted regions and expands its sales force. Kowa's sales force grew to approximately 250 at the end of the first quarter to support the launch of Kowa's pitavastatin product, LIVALO(R), in Q2 2010.
During Q3 2009, Cipher commenced its Phase III safety trial for CIP-ISOTRETINOIN under a Special Protocol Assessment ("SPA") with the U.S. Food and Drug Administration ("FDA"). The 800-patient study is a double-blind, randomized trial comparing CIP-ISOTRETINOIN to an FDA-approved, commercially available isotretinoin product. The study is being conducted in the U.S. and Canada over an 18-month period. The study is progressing well with enrolment having reached more than 400 patients (the mid-point of the enrolment period) at the end of Q1 2010. Reaching this enrolment milestone triggered a US$2.0 million payment to be paid to Cipher in Q2 from its marketing partner. Current enrolment is over 500 patients.
Cipher received tentative FDA approval for CIP-TRAMADOL ER, the Company's extended-release formulation of tramadol, in February 2009. During Q4 2009, the Company announced that Purdue Pharma Products L.P. and Napp Pharmaceutical Group Ltd. filed a complaint against Cipher in the United States District Court for the Eastern District of Virginia, for alleged infringement of two U.S. patents. Under the applicable provisions of the Hatch-Waxman Act, this patent challenge could have delayed final FDA approval of Cipher's NDA by 30 months, or until the patent challenge was resolved, whichever occurred first. In early Q1 2010, the Company announced that a final summary judgment had been entered in favour of Cipher in relation to the above litigation. The judgment terminates any further stay of FDA approval of Cipher's NDA under the applicable provisions of the Hatch-Waxman Act. The final judgment holds that the patents-in-suit are invalid for obviousness based on a prior decision of the United States District Court for the District of Delaware, dated August 14, 2009, invalidating the Orange Book-listed patents for Ultram(R) ER in litigation filed by Purdue against Par Pharmaceutical, Inc. ("Par"). That decision in the Par litigation is currently under appeal before the United States Court of Appeals for the Federal Circuit and the Court's decision is not expected until the latter half of 2010. If Par is successful in the appeal, Cipher believes CIP-TRAMADOL ER will no longer face any further risk of litigation from Purdue in connection with the Orange Book-listed patents that were asserted against Cipher.
The Company is moving forward to obtain CIP-Tramadol's FDA final approval and expects a response in Q2 2010. As part of its broader CIP-TRAMADOL ER commercialization strategy, Cipher also announced that its New Drug Submission to Health Canada was accepted for review during the first quarter. The Company expects the review to be completed by early 2011.
Cipher continues to actively pursue new early stage pipeline product candidates and advance out-licensing discussions for its current products.
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