Labopharm Reports Results for First Quarter Fiscal 2009
- Company's Once-Daily Tramadol Product Now Launched in U.S. -
LAVAL, QC, May 7 /CNW/ - Labopharm Inc. (TSX: DDS; NASDAQ: DDSS) today
reported its results for the first quarter ended March 31, 2009. All figures
are in Canadian dollars unless otherwise stated.
Once-Daily Tramadol Launched in the U.S.
Labopharm's once-daily tramadol is now available in the U.S. Marketed and
distributed in the U.S. by Purdue Pharma Products L.P. under the brand name
Ryzolt(TM), the product is the first and only analgesic that contains both
immediate and extended release components of tramadol. Ryzolt(TM) is now
stocked and available in more than 27,000 retail pharmacies across the U.S.
"We are pleased to announce a major milestone for Labopharm, the U.S.
launch of Ryzolt(TM), our unique once-daily tramadol product," said James R.
Howard-Tripp, President and Chief Executive Officer, Labopharm Inc. "With
Ryzolt(TM), U.S. physicians now have a new option in analgesia for the
millions of American patients suffering from moderate to moderately severe
pain who require continuous treatment."
Pain affects an estimated 76 million Americans and the annual cost of
chronic pain in the U.S. is estimated at US$100 billion, including healthcare
expenses, lost income, and lost productivity.
Labopharm's once-daily tramadol is based on Labopharm's proprietary
Contramid(R) controlled-release technology and is composed of a dual-matrix
delivery system with both immediate-release and extended-release
characteristics. Once-daily tramadol is now available in 17 countries around
the world, including the U.S., Canada, the United Kingdom, France, Spain,
Italy, Germany and Australia, among others.
Financial Summary
Revenue for the first quarter of fiscal 2009 increased to $5.0 million
from $3.2 million for the first quarter of fiscal 2008. Revenue from sales of
the Company's once-daily tramadol product for the first quarter of fiscal 2009
increased to $3.8 million from $2.2 million for the first quarter of fiscal
2008. Adjusted gross margin for the first quarter of fiscal 2009 was 57%
compared with 58% for the first quarter of fiscal 2008. Research and
development expenses, before research and development tax credits, for the
first quarter of fiscal 2009 were $4.3 million compared with $6.9 million for
the first quarter of fiscal 2008. Selling, general and administrative expenses
for the first quarter of fiscal 2009 were $6.7 million compared with $4.9
million for the first quarter of fiscal 2008 and included an accrual of $0.7
million for the Company's share of litigation costs related to patent
enforcement following approval of its once-daily tramadol product in the U.S.
Net loss for the first quarter of fiscal 2009 was $8.0 million, or $0.14 per
share, compared with $9.7 million, or $0.17 per share, for the first quarter
of fiscal 2008.
Recent Developments
Once-Daily Tramadol
Product Ranked Number One in New-to-Brand Prescriptions in Canada -
Labopharm's product (marketed under the brand name Tridural(TM) in Canada)
ranked number one among tramadol products (excluding combination products) in
terms of new-to-brand prescriptions in Canada for the first quarter of 2009.
Market share for Labopharm's product among tramadol products (excluding
combination products) in Canada for the same period was 36%. The number of
prescriptions written for Labopharm's product in Canada for the first quarter
of 2009 increased 19% compared to the fourth quarter of 2008.
In-Market Sales in Europe Continue to Grow - In-market sales of
Labopharm's product in Europe(1) grew 9% for the first two months of 2009
compared to the same period of 2008. Sales to European marketing partners are
continuing to provide a solid contribution to the Company's revenue.
Established Marketing Partnerships for Eleven Additional Countries -
Labopharm signed an agreement with iNova Pharmaceuticals, its marketing
partner for Australia and New Zealand, for distribution of the Company's
product in Singapore, Hong Kong, Malaysia, Philippines, Thailand, Taiwan and
Indonesia. iNova plans to submit regulatory applications in each of these
jurisdictions. The Company also signed licensing and distribution agreements
for Portugal, Brazil, Denmark and Sweden.
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(1) Includes France, Germany, the United Kingdom, Spain and Italy.
Novel Trazodone Formulation
NDA Under Review by FDA/Company in Ongoing Discussions for U.S. Marketing
Partnership - Labopharm's New Drug Application (NDA) for its novel trazodone
formulation is under review by the U.S. Food and Drug Administration (FDA)
with an action date under the Prescription Drug User Fee Act (PDUFA) of July
18, 2009. The Company is in ongoing discussions with potential marketing
partners towards establishing a licensing and distribution agreement for the
United States.
Financial Results
Three-Month Period Ended March 31, 2009
Revenue for the first quarter of fiscal 2009 increased to $5.0 million
from $3.2 million for the first quarter of fiscal 2008. Revenue from product
sales increased to $3.8 million from $2.2 million for the first quarter of
fiscal 2008. The increase in revenue from product sales was primarily the
result of higher sales volumes and higher average selling prices in the first
quarter of fiscal 2009.
Adjusted gross margin (as a percentage of revenue from product sales) for
the first quarter of fiscal 2009 was 57% compared with 58% for the first
quarter of fiscal 2008. Adjusted gross margin for the first quarter of fiscal
2009 excludes the reversal of $240,000 of previously recorded write downs
while adjusted gross margin for the first quarter of fiscal 2008 excludes an
inventory write-off of $152,000 and a favourable adjustment for a royalty
expense over-accrual of $105,000. The slight decrease in adjusted gross margin
was due primarily to a higher average royalty rate paid, which was partially
offset by a higher average selling price per tablet.
Licensing revenue for the first quarter of fiscal 2009 was $1.2 million
and represented a portion of licensing payments received from the Company's
licensing and distribution partners for once-daily tramadol. Licensing revenue
for the first quarter of fiscal 2008 was $1.1 million.
Research and development expenses, before research and development tax
credits, for the first quarter of fiscal 2009 were $4.3 million compared with
$6.9 million for the first quarter of fiscal 2008. The decrease was primarily
the result of lower clinical trial costs in the first quarter of fiscal 2009.
Research and development tax credits for the first quarter of fiscal 2009 were
$0.3 million compared with $1.2 million for the first quarter of fiscal 2008,
a decrease in non-refundable Canadian federal tax credits resulting from a
change in tax planning.
Selling, general and administrative expenses for the first quarter of
fiscal 2009 were $6.7 million compared with $4.9 million for the first quarter
of fiscal 2008. The increase is primarily the result of the accrual of $0.7
million for the Company's share of litigation costs incurred by Purdue Pharma
to enforce certain of Purdue's U.S. patents related to Labopharm's once-daily
tramadol product, as well as higher sales and marketing expenses.
Net loss for the first quarter of fiscal 2009 was $8.0 million, or $0.14
per share, compared with $9.7 million, or $0.17 per share, for the first
quarter of fiscal 2008.
Cash, cash equivalents and marketable securities at March 31, 2009 were
$35.9 million compared with $44.9 million at December 31, 2008. The cash, cash
equivalents and marketable securities position at March 31, 2009 does not
include the Company's Long-Term Notes, received in exchange of the Montreal
Proposal ABCP, that have an estimated fair value of $3.0 million and that are
recorded as a long-term investment.
Conference Call
Labopharm will host a conference call today (Thursday, May 7, 2009) at
8:30 a.m. ET to discuss its first quarter results. To access the conference
call by telephone, dial 416-644-3420 or 1-800-732-0232. Please connect
approximately five minutes prior to the beginning of the call to ensure
participation. The conference call will be archived for replay until Thursday,
May 14, 2009 at midnight. To access the archived conference call, dial
416-640-1917 or 1-877-289-8525 and enter the reservation number 21303738
followed by the number sign. A live audio webcast of the conference call will
be available at www.labopharm.com. Please connect at least 15 minutes prior to
the conference call to ensure adequate time for any software download that may
be required to join the webcast. The webcast will be archived at the above web
site for 30 days.
About Labopharm Inc.
Labopharm is an emerging leader in optimizing the performance of existing
small molecule drugs using its proprietary controlled-release technologies.
The Company's lead product, a unique once-daily formulation of tramadol, is
being commercially launched in key markets globally and its second product, a
novel formulation of trazodone for the treatment of major depressive disorder,
is under regulatory review by the FDA. The Company also has a robust pipeline
of follow-on products in both pre-clinical and clinical development.
Labopharm's vision is to become an integrated, international, specialty
pharmaceutical company with the capability to internally develop and
commercialize its own products. For more information, please visit
www.labopharm.com.
Ryzolt(TM) is a trademark of Purdue Pharma Products L.P.
This press release contains forward-looking statements, which reflect the
Company's current expectations regarding future events. The forward-looking
statements involve risks and uncertainties. Actual events could differ
materially from those projected herein and depend on a number of factors,
including the uncertainties related to the regulatory process in various
countries for the approval of the Company's products and the successful
commercialization of the products throughout the world if they are approved.
Investors should consult the Company's ongoing quarterly filings and annual
reports for additional information on risks and uncertainties relating to
these forward-looking statements. The reader is cautioned not to rely on these
forward-looking statements. The Company disclaims any obligation to update
these forward-looking statements.
Labopharm Inc.
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited)
As at As at
March 31, December 31,
2009 2008
(Restated)
(thousands of Canadian dollars) $ $
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ASSETS
Current
Cash and cash equivalents 12,094 8,373
Marketable securities 23,791 36,520
Accounts receivable 3,909 3,277
Research and development tax credits receivable 1,574 1,274
Income taxes receivable 377 474
Inventories 2,734 1,760
Prepaid expenses and other assets 1,124 641
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Total current assets 45,603 52,319
-------------------------------------------------------------------------
Restricted long-term investments 150 141
Long-term investment 2,979 3,178
Property, plant and equipment 9,796 10,213
Intangible assets 1,766 1,791
Future income tax assets 147 145
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60,441 67,787
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 14,049 13,134
Current portion of deferred revenue 4,775 4,768
Current portion of obligations under capital
leases 280 271
Current portion of long-term debt 5,681 3,378
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Total current liabilities 24,785 21,551
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Deferred revenue 8,333 9,094
Obligations under capital leases 5,269 5,342
Long-term debt 18,642 20,265
-------------------------------------------------------------------------
Total liabilities 57,029 56,252
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Shareholders' equity
Share capital
Common shares, no par value, unlimited
authorized shares, 56,833,696 and
56,826,063 issued as at March 31, 2009
and December 31, 2008, respectively 241,983 241,967
Warrants 751 751
Contributed surplus 15,722 14,937
Deficit (255,489) (247,515)
Accumulated other comprehensive income 445 1,395
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Total shareholders' equity 3,412 11,535
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60,441 67,787
-------------------------------------------------------------------------
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Labopharm Inc.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended: March 31, March 31,
2009 2008
(thousands of Canadian dollars, (Restated)
except share and per share amounts) $ $
-------------------------------------------------------------------------
REVENUE
Product sales 3,802 2,158
Licensing 1,155 1,061
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4,957 3,219
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EXPENSES
Cost of goods sold (excluding amortization) 1,393 951
Research and development expenses, net 4,027 5,691
Selling, general and administrative expenses 6,724 4,907
Financial expenses 1,014 711
Impairment loss on long-term investment - 691
Depreciation and amortization 463 485
Interest income (187) (652)
Foreign exchange gain (503) (272)
-------------------------------------------------------------------------
12,931 12,512
-------------------------------------------------------------------------
Loss before income taxes (7,974) (9,293)
Provision for income taxes
Current - 450
-------------------------------------------------------------------------
Net loss for the period (7,974) (9,743)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net loss per share - basic and diluted (0.14) (0.17)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of common shares
outstanding 56,826,148 56,818,187
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Labopharm Inc.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended: March 31, March 31,
2009 2008
(Restated)
(thousands of Canadian dollars) $ $
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period (7,974) (9,743)
Items not affecting cash:
Depreciation of property, plant and equipment 422 455
Amortization of intangible assets 41 30
Amortization of premiums and discounts on
marketable securities 15 14
Impairment loss on long-term investment - 691
Non-cash financial expenses 142 95
Unrealized foreign exchange loss (gain) 808 (241)
Stock-based compensation 792 884
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(5,754) (7,815)
Net change in non-cash items (2,045) 930
-------------------------------------------------------------------------
(7,799) (6,885)
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of marketable securities (6,568) (23,553)
Proceeds from maturities of marketable securities 13,807 34,061
Proceeds from disposals of marketable securities 4,420 -
Acquisition of restricted long-term investment - (45)
Acquisition of property, plant and equipment (5) (519)
Acquisition of intangible assets (16) (7)
-------------------------------------------------------------------------
11,638 9,937
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of obligations under capital leases (64) (25)
Proceeds from issuance of common shares 9 2
-------------------------------------------------------------------------
(55) (23)
-------------------------------------------------------------------------
Foreign exchange gain (loss) on cash held in
foreign currencies (63) 799
Net increase in cash and cash equivalents
during the period 3,721 3,828
Cash and cash equivalents, beginning of period 8,373 17,173
-------------------------------------------------------------------------
Cash and cash equivalents, end of period 12,094 21,001
-------------------------------------------------------------------------
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Supplemental cash flow information:
Interest paid 701 523
Income taxes received 88 -
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For further information: At Labopharm: Mark D'Souza, Senior
Vice-President and Chief Financial Officer, Tel: (450) 686-0207; At The
Equicom Group: Jason Hogan, Media and Investor Relations, Tel: (416) 815-0700,
jhogan@equicomgroup.com; French: Joe Racanelli, Tel: (514) 844-7997,
jracanelli@equicomgroup.com
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