QLT Inc. (NASDAQ:QLTI) (TSX:QLT) (“QLT” or the “Company”) reported
financial results today for the third quarter ended
September 30, 2016. Unless otherwise specified, all amounts
are reported in U.S. dollars and in accordance with U.S. GAAP.
2016 THIRD QUARTER FINANCIAL
RESULTS
Operating Expenses/Income
During the third quarter of 2016, research and
development (“R&D”) expenditures were $2.9 million compared to
$2.1 million for the same period in 2015. The $0.8 million
(38%) increase was primarily due to higher costs related to
preparatory activities for our upcoming Phase III pivotal trial for
QLT091001.
During the third quarter of 2016, we incurred $1.9
million of consulting and advisory fees on activities to support
our pending merger transaction with Aegerion Pharmaceuticals, Inc.
(“Aegerion”), which is described below. In comparison, we
incurred $2.2 million of similar costs in 2015 related to: (i) the
pursuit of our merger transaction with InSite Vision Incorporated
(“InSite”), which was terminated by InSite on September 15, 2015,
and (ii) activities to support our investment in Aralez
Pharmaceuticals, Inc. (“Aralez”), which was subsequently
distributed to our shareholders on April 5, 2016 (the “Aralez
Distribution”).
Excluding the strategic consulting and advisory
fees described above, selling, general and administrative
(“SG&A”) expenditures for the third quarter of 2016 were
relatively consistent with SG&A expenditures incurred during
the same period in 2015.
Operating Loss and Net Loss per
Share
The operating loss for the third quarter of 2016
was $6.0 million, compared to $2.8 million for the same period in
2015. The net $3.2 million change in our operating loss was
primarily due to a $2.7 million non-recurring termination fee
received from InSite in September 2015, in connection with InSite’s
termination of the merger agreement, as well as higher R&D
costs in the third quarter of 2016 associated with preparatory
activities for our upcoming Phase III pivotal trial for
QLT091001.
Net loss per common share was $0.11 in the third
quarter of 2016, compared to $0.05 for the same quarter in 2015.
The change in our net loss per common share was primarily due to
the same factors described above.
Cash and Cash Equivalents
As at September 30, 2016, the Company’s
consolidated cash and cash equivalents were $73.1 million compared
to $141.8 million at December 31, 2015. The $68.7 million
decrease was primarily due to: (i) the $45.0 million
investment in Aralez and subsequent Aralez Distribution (as
described above), (ii) $9.2 million of strategic consulting
and advisory fees related to the proposed merger with Aegerion, the
Aralez Distribution, and the exploration of other strategic
alternatives, (iii) $3.0 million advanced to Aegerion pursuant
to the terms of the interim loan agreement with Aegerion, and
(iv) cash used in operating activities during the period.
AEGERION MERGER TRANSACTION
UPDATE
As previously announced, on June 14, 2016, Aegerion
and QLT agreed to a merger (the “Merger”) under the terms of an
Agreement and Plan of Merger by and among Aegerion, QLT and Isotope
Acquisition Corp., an indirect wholly-owned subsidiary of QLT.
While the proposed Merger has been approved by the boards of
directors of both companies, the closing of the Merger is subject
to various conditions, including but not limited to (i) receipt of
the required approvals of the shareholders at the special meetings
of each QLT and Aegerion on November 7, 2016, and (ii) completion
of the $21.8 million QLT private placement contemplated by the unit
subscription agreement entered into with certain investors in
connection with the Merger. The Merger is expected to close in the
fourth quarter of 2016.
SYNTHETIC RETINOID UPDATE
The Company continues its Phase III pivotal trial
start-up activities to test the safety and efficacy of its Fast
Track and Orphan Drug Designated investigational drug product,
QLT091001 in subjects with Inherited Retinal Disease phenotypically
diagnosed as LCA or RP caused by RPE65 or LRAT gene mutations, with
a goal of initiating the pivotal trial in the fourth quarter of
2016.
In addition to the Fast Track and Orphan Drug
Designations previously granted to us by the FDA for QLT091001, the
Company is currently exploring the potential of submitting to the
FDA a request for a Rare Pediatric Disease Designation of
QLT091001. Under the Federal Food, Drug, and Cosmetic Act, a
sponsor who receives an approval of a New Drug Application (NDA)
for a Rare Pediatric Disease and meets certain additional criteria,
may be eligible to be awarded a Rare Pediatric Disease Priority
Review Voucher (PRV). A PRV can be redeemed to receive a
priority review for any subsequent marketing application for a
different product. A PRV, if obtained by a sponsor, may be sold or
transferred to another sponsor. The FDA’s authority to award
Rare Pediatric Disease PRVs is currently set to expire December 31,
2016. The authority has been extended multiple times
previously, and while it is possible that it may be further
extended or made permanent in the future, there is no guarantee of
any such extension.
In addition, U.S. Patent No. 9,403,765
relating to various methods of use of various synthetic retinal
esters, including QLT091001, for the treatment of diseases
associated with an endogenous 11-cis-retinal deficiency, including
LCA and RP, was granted by the USPTO on August 2, 2016. This patent
is currently projected to expire on June 20, 2025. This newly
issued patent further enhances the Company’s key patent portfolio
around methods of using QLT091001 in the treatment of IRD.
Passive Foreign Investment
Company
The Company believes that it was classified as a
Passive Foreign Investment Company (“PFIC”) for 2008 through 2015,
and that it may be classified as a PFIC in 2016, which could have
adverse tax consequences for U.S. shareholders. Please refer to our
2015 Annual Report on Form 10-K (as amended by the Form 10-K/A
filed on April 29, 2016) for additional information.
QLT Inc. -
Financial Highlights |
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS |
|
|
|
(Unaudited) |
|
|
|
|
|
(In
thousands of U.S. dollars except share and per share
information) |
|
|
|
|
|
|
Three months
ended |
Nine months
ended |
|
September
30, |
September
30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
Research and development |
$ |
2,855 |
|
$ |
2,142 |
|
$ |
8,774 |
|
$ |
7,754 |
|
|
Selling, general and
administrative |
|
3,138 |
|
|
3,166 |
|
|
13,487 |
|
|
13,939 |
|
|
Depreciation |
|
24 |
|
|
141 |
|
|
85 |
|
|
508 |
|
|
Termination fee |
|
- |
|
|
(2,667 |
) |
|
- |
|
|
(2,667 |
) |
|
|
|
6,017 |
|
|
2,782 |
|
|
22,346 |
|
|
19,534 |
|
|
Operating
loss |
|
(6,017 |
) |
|
(2,782 |
) |
|
(22,346 |
) |
|
(19,534 |
) |
|
Other (expense)
income |
|
|
|
|
|
Net foreign exchange losses |
|
(105 |
) |
|
(43 |
) |
|
(214 |
) |
|
(5 |
) |
|
Interest income |
|
110 |
|
|
152 |
|
|
240 |
|
|
235 |
|
|
Fair value loss on investment |
|
- |
|
|
- |
|
|
(10,704 |
) |
|
- |
|
|
Other |
|
(39 |
) |
|
(6 |
) |
|
(30 |
) |
|
(8 |
) |
|
|
|
(34 |
) |
|
103 |
|
|
(10,708 |
) |
|
222 |
|
|
Loss before
income taxes |
|
(6,051 |
) |
|
(2,679 |
) |
|
(33,054 |
) |
|
(19,312 |
) |
|
Recovery of (Provision
for) income taxes |
|
115 |
|
|
(3 |
) |
|
104 |
|
|
(17 |
) |
|
Net loss and comprehensive loss |
$ |
(5,936 |
) |
$ |
(2,682 |
) |
$ |
(32,950 |
) |
$ |
(19,329 |
) |
|
|
|
|
|
|
|
Basic and
diluted net loss per common
share |
|
|
|
|
|
Net loss per common share |
$ |
(0.11 |
) |
$ |
(0.05 |
) |
$ |
(0.62 |
) |
$ |
(0.37 |
) |
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding
(thousands) |
|
|
|
|
|
Basic and diluted |
|
52,829 |
|
|
52,829 |
|
|
52,829 |
|
|
51,949 |
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
(Unaudited) |
|
|
|
(In
thousands of U.S. dollars) |
September 30, 2016 |
December 31, 2015 |
|
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
$ |
73,056 |
|
$ |
141,824 |
|
|
Accounts receivable, net of
allowances for doubtful accounts |
|
186 |
|
|
287 |
|
|
Loan receivable |
|
3,073 |
|
|
- |
|
|
Income taxes receivable |
|
14 |
|
|
14 |
|
|
Prepaid and
other assets |
|
450 |
|
|
611 |
|
|
Total current
assets |
|
76,779 |
|
|
142,736 |
|
|
Accounts
receivable |
|
2,000 |
|
|
2,000 |
|
|
Property,
plant and equipment |
|
270 |
|
|
430 |
|
|
Total assets |
$ |
79,049 |
|
$ |
145,166 |
|
|
LIABILITIES |
|
|
|
Current
liabilities |
|
|
|
Accounts payable |
$ |
3,308 |
|
$ |
1,656 |
|
|
Accrued
liabilities |
|
1,058 |
|
|
1,827 |
|
|
Total current
liabilities |
|
4,366 |
|
|
3,483 |
|
|
Uncertain tax position
liabilities |
|
- |
|
|
342 |
|
|
Total liabilities |
|
4,366 |
|
|
3,825 |
|
|
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 common
shares |
$ |
475,333 |
|
$ |
475,333 |
|
|
September 30, 2016 – 52,829,398
shares |
|
|
|
December 31, 2015 – 52,829,398
shares |
|
|
|
Additional paid-in
capital |
|
63,669 |
|
|
97,377 |
|
|
Accumulated
deficit |
|
(567,288 |
) |
|
(534,338 |
) |
|
Accumulated other
comprehensive income |
|
102,969 |
|
|
102,969 |
|
|
Total shareholders'
equity |
|
74,683 |
|
|
141,341 |
|
|
Total shareholders' equity and liabilities |
$ |
79,049 |
|
$ |
145,166 |
|
|
|
|
|
|
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.
About QLT091001
QLT091001 is an orally administered synthetic
retinoid replacement for 11-cis-retinal, which is a key biochemical
component of the visual retinoid cycle. We are currently developing
QLT091001 for the treatment of Inherited Retinal Disease caused by
retinal pigment epithelium protein 65 and lecithin:retinol
acyltransferase gene mutations, which indication comprises Leber
Congenital Amaurosis and Retinitis Pigmentosa.
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 the proposed merger with
Aegerion and the proposed private placement for $21.8 million, and
the timing and financial and strategic benefits thereof; our future
strategies, plans and expectations for the Company and QLT091001;
statements concerning our exploration of, and the potential ability
to be granted, Rare Pediatric Disease Designation by the FDA for
QLT091001 and, if so designated, the potential to subsequently
qualify for a Priority Review Voucher; the potential benefits of a
Rare Pediatric Disease Designation and transferability of a
Priority Review Voucher under the current Rare Pediatric Disease
Priority Review Voucher program (the “Voucher Program”); our
anticipated development plans and potential approvals for, and the
commercial potential of, QLT091001; 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 we will be treated as a PFIC
in 2016 and future years; the failure to receive, on a timely basis
or otherwise, the required approvals by Aegerion and QLT
shareholders; the risk that a condition to closing of the merger
with Aegerion may not be satisfied; the possibility that the
anticipated benefits and synergies from the proposed merger with
Aegerion cannot be fully realized or may take longer to realize
than expected; the possibility that costs or difficulties related
to the integration of Aegerion and QLT operations will be greater
than expected; the ability of the companies to retain and hire key
personnel and maintain relationships with customers, suppliers or
other business partners; the risks and uncertainties associated
with our ability to be granted a Rare Pediatric Disease Designation
and any subsequent qualification for a Rare Pediatric Disease
Priority Review Voucher, including the risk that the QLT091001
program will not qualify under the current or any future applicable
criteria for designation as a Rare Pediatric Disease or that an NDA
for QLT091001 will not qualify for a Priority Review Voucher, and
the risk that future changes to the QLT091001 program and/or the
Voucher Program, including related to the transferability of the
Priority Review Voucher, limit the future benefits of the Rare
Pediatric Disease Designation and/or Priority Review Voucher; the
impact of legislative, regulatory, competitive and technological
changes, including changes in tax laws or interpretations, and the
impact of the integration process, any of which could increase the
consolidated tax liabilities of the companies following the
proposed Merger; the risk that the Company will determine it is not
feasible to submit a Marketing Authorization Application for
conditional approval with the European Medicines Agency in a timely
manner or at all, due to lack of placebo controlled data or other
reasons deemed relevant by the Company or regulatory agencies;
uncertainties related to the timing of and our ability to commence
a pivotal trial for QLT091001 in accordance with the current
development plans which we evaluate on an ongoing basis; risks and
uncertainties concerning the impact that QLT’s success or failure
in pursuing various future strategic initiatives will have on the
market price of our securities; uncertainties relating to our
development plans, timing and results of the clinical development
and commercialization of our products and technologies, including
pivotal clinical trials; assumptions related to enrollment trends,
efforts and success, and the associated costs of our current and
future 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.
QLT Inc. Contacts:
Investor & Media Relations
Andrea Rabney or David Pitts
Argot Partners
212-600-1902
andrea@argotpartners.com
david@argotpartners.com
Novelion Therapeutics (NASDAQ:NVLN)
Historical Stock Chart
From Apr 2024 to May 2024
Novelion Therapeutics (NASDAQ:NVLN)
Historical Stock Chart
From May 2023 to May 2024