Cipher Pharmaceuticals Inc. (TSX: DND) today announced its financial and operational results for the three and nine months ended September 30, 2010.
Q3 2010 Summary : Net revenue of $1.1 million for Q3 2010, consistent with Q3 2009, and $4.2 million for the 2010 fiscal year to date, an increase of 80% over the same nine-month period last year. - Net loss for the third quarter was $0.3 million ($0.01 per share), compared with a loss of $0.5 million ($0.02 per share) for Q3 2009. - Increased cash to $10.5 million at quarter end, compared with cash of $9.0 million at December 31, 2009. - Announced that the U.S. Patent and Trademark Office issued a Patent Notice of Allowance for the Company's extended-release tramadol product, CIP-TRAMADOL ER. - Subsequent to quarter end, also received Patent Notice of Allowance from the Canadian Intellectual Property Office.
"We are pleased to see continued strength in Lipofen(R) prescriptions, which is providing a steadily increasing royalty stream that is substantially offsetting our operating expenses," said Larry Andrews, President and CEO of Cipher. "In the past several months, we achieved another important commercialization milestone as we received patent Notice of Allowances in the U.S. and Canada for our extended-release tramadol, providing important IP protection as we prepare to launch the product. In addition, we made excellent progress with our Phase III CIP-ISOTRETINOIN safety study during the quarter, and patient enrolment is expected to be completed this month - ahead of our original schedule. With more than 800 patients, this is the most comprehensive trial ever conducted on isotretinoin."
Financial Review :
Net revenue in Q3 2010 was $1.1 million, the same as in Q3 2009. However, royalty revenue from Lipofen(R) product sales increased by $0.4 million year-over-year as revenue for Q3 2009 included a one-time $0.4 million payment from Cipher's marketing partner related to a minimum guarantee on Lipofen(R) sales.
Gross Research and Development ("R&D") expenditures for Q3 2010 were $2.7 million, which represents an increase of $2.2 million compared with Q3 2009, driven by the CIP-ISOTRETINOIN clinical study. The reported R&D expenditure amount of $0.2 million for Q3 2010 is net of $2.5 million ($0.2 million in Q3 2009) of reimbursed expenses from Cipher's U.S. marketing partner. Operating, General and Administrative expense for Q3 2010 was $1.0 million, $0.2 million lower than the same period in the prior year.
For the three months ended September 30, 2010, the Company recorded a net loss of $0.3 million ($0.01 per share), compared with a loss of $0.5 million ($0.02 per share) in Q3 2009.
Net revenue for the first nine months of 2010 was $4.2 million, an increase of 80% over the $2.3 million recorded in first nine months of 2009. Net loss for the first nine months of 2010 was $0.03 million ($0.00 per share), compared with a net loss of $2.1 million ($0.09 per share) for the corresponding period last year.
Cipher's financial position remained solid at quarter-end. As at September 30, 2010, the Company had cash of $10.5 million, compared with $9.0 million as at December 31, 2009 and $10.3 as at June 30, 2010.
Product Update :
During Q3 2010, Lipofen(R) monthly prescriptions in the U.S. market remained strong. Total monthly prescriptions for Q3 2010 rose 7% over Q2 2010.
During Q3 2009, Cipher commenced its final 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. During Q3 2010, the Company completed patient screening, and enrolment is expected to be completed in October 2010. Following an approximate six-month treatment period and two months to compile and review the data, Cipher expects to disclose top-line study results in Q3 2011.
In May 2010, Cipher announced that the FDA has approved CIP-TRAMADOL ER, the Company's extended-release tramadol product, for the treatment of moderate to moderately severe chronic pain in adults. Also during Q2 2010, the United States Court of Appeals upheld the lower court's original decision on patent infringement litigation initiated by Pharma Products L.P against Par Pharmaceutical Companies, Inc. relating to Ultram(R) ER, the reference product in Cipher's New Drug Application for CIP-TRAMADOL ER. This decision further mitigates any remaining risk of litigation on these patents against CIP-TRAMADOL ER.
During Q3 2010, Cipher announced that the U.S. Patent and Trademark Office issued a Patent Notice of Allowance for CIP-TRAMADOL ER. Subsequent to quarter end, the Company also received Patent Notice of Allowance from the Canadian Intellectual Property Office. Both patents are expected to be issued this quarter. Cipher is currently preparing for the U.S. commercial launch of CIP-TRAMADOL ER, which includes securing a marketing partner and finalizing commercial manufacturing requirements. Cipher is targeting the first half of 2011 for commercial launch, at which point the product will provide a second royalty revenue stream to the Company.
Cipher continues to actively pursue new early stage pipeline product candidates and advance out-licensing discussions for its current products.