QLT Inc. (QLTI) filed Quarterly Report for the period ended 2009-06-30.
QLT PhotoTherapeutics Inc. is a world leader in the development and commercialization of proprietary pharmaceutical products for use in photodynamic therapy an emerging field of medicine utilizing light-activated drugs in the treatment of disease. QLT\'s innovative science has advanced photodynamic therapy beyond applications in cancer towards potential breakthrough treatments in ophthalmology and autoimmune disease. (PRESS RELEASE) QLT Inc. has a market cap of $201 million; its shares were traded at around $3.68 with a P/E ratio of 18.5 and P/S ratio of 1.7.
Highlight of Business Operations:
For the three and six months ended June 30, 2009, we recorded net income of $8.6 million and $9.9 million, or $0.16 and $0.17 net income per common share, respectively. These results compare with a net loss of $7.4 million and $17.9 million, or $0.10 and $0.24 net loss per common share for the three and six months ended June 30, 2008, respectively. Detailed discussion and analysis of our results of operations are as follows:
For the three months ended June 30, 2009, royalty revenue of $12.7 million was $4.9 million, or 64% higher compared to the same period in 2008. For the six months ended June 30, 2009, royalty revenue was $21.6 million, an increase of $7.5 million, or 54% compared to the same period in 2008. The three and six months ended June 30, 2009 included approximately $2.2 million of incremental revenue as a result of a reversal of a provision for a potential retroactive pricing rebate on certain sales of Eligard. In addition, the three and six months ended June 30, 2008 included a reduction in royalty revenue of $2.0 million and $1.5 million, respectively, related to the same provision. The remaining increase was a result of continued growth of Eligard sales in Europe and the U.S.
For the three and six months ended June 30, 2009, cost of sales of $16.6 million and $29.6 million increased by $2.5 million, or 18% and $3.7 million, or 14% respectively, over the same period in the prior year. The increase was mainly due to a $4.6 million inventory write-down related to Visudyne, offset by lower cost of sales related to the drop in Visudyne sales. Inventory quantities are regularly reviewed and provisions for excess or obsolete inventory are recorded primarily based on our forecast of future demand and market conditions. During the three months ended June 30, 2009, we concluded that based on our forecast of future Visudyne demand, certain early stage materials used in the manufacture of Visudyne were potential excess inventory. As a result, we provided a reserve against the excess inventory and recorded a charge of $4.6 million in cost of sales. Cost of sales related to Visudyne increased from $4.5 million to $7.1 million in the three months ended June 30, 2009 and from $7.7 million to $10.5 million in the six months ended June 30, 2009 compared to the same period in 2008.
For the three and six months ended June 30, 2009, cost of sales related to Eligard of $9.5 million and $19.1 million decreased by $0.2 million and increased by $0.9 million, respectively, over the same periods in the prior year. The prior period included a $0.6 million inventory write-down related to Eligard. Excluding the inventory write-down, the increase in Eligard cost of sales was a result of continued growth of the Eligard product.
In January 2008, we restructured our operations and during the six months ended June 30, 2008, we provided most of the approximately 115 affected employees with severance and support to assist with outplacement and recorded $9.5 million of restructuring charges which included a property, plant, and equipment impairment charge of $1.5 million. During the three months ended June 30, 2009 we recorded a $0.1 million adjustment and during the six months ended June 30, 2009 we recorded a $0.2 million adjustment to our restructuring accrual related to severance, termination benefits and other costs as we complete final activities associated with this restructuring. Annualized operating savings as a result of the 2008 restructuring, which was substantially completed by June 30, 2008, are approximately $11.0 million.
For the three months ended June 30, 2009, interest income decreased 64% to $0.6 million compared to $1.6 million for the same period in 2008. For the six months ended June 30, 2008, interest income decreased 50% to $2.0 million compared to $3.9 million for the same period in 2008. The decrease was primarily due to a substantial decline in interest rates and a lower average cash and restricted cash balance compared to the same period in the prior year, partially offset by interest earned on tax refunds, and interest earned on our second mortgage financing. For the six months ended June 30, 2009, interest income included $1.0 million of interest earned on tax refunds and $0.3 million of interest earned on our second mortgage receivable.
QLTI is in the portfolios of Charles Brandes of Brandes Investment.
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