(All figures are presented in
- Cash on hand grew by
$4.6 million to$33.4 million - EPS increased 25% year-over-year to
$0.10 - Adjusted EBITDA1 of
$3.2 million was higher than Q1 2022 and Q4 2022 by$0.1 million
Q1 2023 Financial Highlights
(All figures in
- Total revenue was
$4.9 million compared to$5.4 million , a decrease of 10% - Adjusted EBITDA1 increased 3% to
$3.2 million in Q1 2023 - Continued emphasis on managing the business with a focus on earnings and strong free cash flow
- Ended the quarter with
$33.4 million in cash (CDN$45.2 2) or$1.33 per share (CDN$1.80 2) - Announced the closing of a new
US$35 million credit facility with Royal Bank of Canada
Management Commentary
Q1 2023 Financial Review
(All figures are in
- Total revenue was
$4.9 million for Q1 2023, compared to$5.4 million for Q1 2022. - Licensing revenue was
$1.7 million for Q1 2023, compared to$2.1 million for Q1 2022. - Product revenue was
$3.2 million for Q1 2023, compared to$3.3 million for Q1 2022. - Cash SG&A costs were
$0.8 million for Q1 2023, compared to$1.1 million for Q1 2022. - Net income was
$2.7 million , or$0.10 per diluted share in Q1 2023, compared to$2.1 million , or$0.08 per diluted share in Q1 2022. - Adjusted EBITDA for Q1 2023 was
$3.2 million , compared to$3.1 million in Q1 2022. - The Company had
$33.4 million in cash and no debt as at Q1 2023. Cipher generated$4.7 million in cash from operating activities during Q1 2023.
Business Strategy & Outlook
Cipher anticipates executing on its business strategy in 2023 to enhance long term value, including:
- Focusing on acquiring cash flow positive pharmaceutical assets to further diversity our product portfolio
- Continuing to be responsive to opportunities being presented to us and whereby long-term shareholder value can be enhanced
- Operating the business in an efficient and prudent manner to deliver continued earnings, being our management philosophy
- Continuing to collaborate with our partners on our product pipeline, such as with Moberg Pharma on its phase III clinical trial in the
U.S. for MOB-015, which started inMay 2022 , a novel product for the treatment of foot fungus, and whereby Cipher has the exclusive Canadian market rights
Financial Statements and MD&A
Cipher's Financial Statements for the three months ended March 31, 2023, and Management's Discussion and Analysis (the "MD&A") for the three months ended
Notice of Conference Call
Cipher will hold a conference call on May 12, 2023, at 8:30 a.m. (ET) to discuss its financial results and other corporate developments.
- To access the conference call by telephone, dial (416) 764-8650 or (888) 664-6383 and use conference 40452017
A live audio webcast will be available at https://app.webinar.net/wOPDyeLaKb0
- or the Investor Relations section of the Company's website at http://www.cipherpharma.com.
- An archived replay of the webcast will be available until
May 19, 2023 .
About
Forward-Looking Statements and Non-IFRS Measures
This document includes forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to the impact of the Company's cost reduction plan, the potential for improved profitability of our hospital business, increased adoption of ABSORICA LD, discussions with Galephar regarding new product opportunities, the impact of the partnership with Verity on the Company's ability to manage its costs efficiently and drive profitability within its hospital business, our objectives and goals and strategies to achieve those objectives and goals, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", "hope" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on these statements as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the extent and impact of the coronavirus (COVID-19) outbreak on our business including any impact on our contract manufacturers and other third party service providers, our ability to enter into development, manufacturing and marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect; our dependency on a limited number of products; our dependency on protection from patents that will expire; integration difficulties and other risks if we acquire or in-license technologies or product candidates; reliance on third parties for the marketing of certain products; the product approval process is highly unpredictable; the timing of completion of clinical trials, regulatory submissions and regulatory approvals; reliance on third parties to manufacture our products and events outside of our control that could adversely impact the ability of our manufacturing partners to supply products to meet our demands; we may be subject to future product liability claims; unexpected product safety or efficacy concerns may arise; we generate license revenue from a limited number of distribution and supply agreements; the pharmaceutical industry is highly competitive; requirements for additional capital to fund future operations; products in
We caution that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found in the "Risk Factors" section of the Company's Annual Information Form for the year ended
1) EBITDA and adjusted EBITDA are non-IFRS financial measures. The term EBITDA (earnings before interest, taxes, depreciation and amortization,) does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management's perspective. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, non-cash share-based compensation, changes in fair value of derivative financial instruments, provision for legal settlement, loss on disposal of assets and loss on extinguishment of lease, impairment of intangible assets, restructuring costs and foreign exchange gains and losses from the translation of Canadian cash balances.
2) At the
The following is a summary of how EBITDA and Adjusted EBITDA are calculated:
(IN THOUSANDS OF | Three months ended | Three months ended |
$ | $ | |
Income and comprehensive income | 2,626 | 2,149 |
Add back: | ||
Depreciation and amortization | 343 | 155 |
Interest income | (355) | (7) |
Income taxes | 82 | 774 |
EBITDA | 2,696 | 3,071 |
Unrealized foreign exchange gain | (7) | (17) |
Restructuring costs | 38 | — |
Share-based compensation | 444 | 38 |
Adjusted EBITDA | 3,171 | 3,092 |
Adjusted EBITDA per share – basic | 0.12 | 0.12 |
Adjusted EBITDA per share – dilutive | 0.12 | 0.12 |
Condensed interim consolidated statements of income and comprehensive income
Three months ended | ||
2023 | 2022 | |
(IN THOUSANDS OF | $ | $ |
Revenue | ||
Licensing revenue | 1,676 | 2,099 |
Product revenue | 3,210 | 3,317 |
Net revenue | 4,886 | 5,416 |
Operating expenses | ||
Cost of products sold | 977 | 1,124 |
Research and development | 3 | 65 |
Depreciation and amortization | 343 | 155 |
Selling, general and administrative | 1,217 | 1,173 |
Total operating expenses | 2,540 | 2,517 |
Other (income) expenses | ||
Interest income | (355) | (7) |
Unrealized foreign exchange gain | (7) | (17) |
Total other (income) expenses | (362) | (24) |
Income before income taxes | 2,708 | 2,923 |
Current income tax (recovery) expense | 97 | 724 |
Deferred income tax (recovery) expense | (15) | 50 |
Total income tax (recovery) expense | 82 | 774 |
Net income and comprehensive income for the period | 2,626 | 2,149 |
Income per share | ||
Basic | 0.10 | 0.08 |
Diluted | 0.10 | 0.08 |
Condensed interim consolidated statements of financial position
As at | As at | |
2023 | 2022 | |
(IN THOUSANDS OF | $ | $ |
Assets | ||
Current assets | ||
Cash and cash equivalents | 33,427 | 28,836 |
Accounts receivable | 5,487 | 6,802 |
Inventory | 2,383 | 2,152 |
Prepaid expenses and other assets | 332 | 371 |
Total current assets | 41,629 | 38,161 |
Property and equipment, net | 471 | 481 |
Intangible assets, net | 2,451 | 2,754 |
15,706 | 15,706 | |
Deferred tax assets | 16,703 | 16,674 |
Total assets | 76,960 | 73,776 |
Liabilities and shareholders' equity | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 4,127 | 4,107 |
Income taxes payable | 5,004 | 4,904 |
Contract liability | 285 | 257 |
Current portion of lease obligation | 101 | 101 |
Total current liabilities | 9,517 | 9,369 |
Lease obligation | 302 | 327 |
Total liabilities | 9,819 | 9,696 |
Shareholders' equity | ||
Share capital | 18,294 | 17,719 |
Contributed surplus | 5,273 | 5,358 |
Accumulated other comprehensive loss | (9,514) | (9,514) |
Retained earnings | 53,088 | 50,517 |
Total shareholders' equity | 67,141 | 64,080 |
Total liabilities and shareholders' equity | 76,960 | 73,776 |
SOURCE
© Canada Newswire, source