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Qlt Inc. has a market cap of $304.3 million; its shares were traded at around $5.77 with and P/S ratio of 7.2. QLTI is in the portfolios of Jim Simons of Renaissance Technologies LLC, Charles Brandes of Brandes Investment, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:For the three and nine months ended September 30, 2010, we recorded a net loss of $0.7 million and net income of $1.7 million, or $0.01 net loss and $0.03 net income per common share, respectively. These results compare with a net income of $8.9 million and $18.9 million, or $0.16 and $0.33 net income per common share for the three and nine months ended September 30, 2009, respectively. Detailed discussion and analysis of our results of operations are as follows:
For the nine months ended September 30, 2010, net product revenue from Visudyne decreased by $6.5 million, or 21%, to $24.8 million compared to $31.3 million for the nine months ended September 30, 2009. The decrease was due to an 18% decline in Visudyne sales (presented below) over the same period in the prior year, as well as the impact of the change in the determination of net product revenue in 2010 under the Amended PDT Agreement. The decline in Visudyne sales was primarily the result of lower end user demand due to competing therapies. The decrease was offset by the recognition of $5.0 million of deferred revenue related to inventory previously shipped to Novartis for sales outside the U.S.
For the three months ended September 30, 2010, cost of sales of $1.9 million decreased $0.3 million, or 15%, compared to $2.2 million for the same period in 2009. The decrease in cost of sales was primarily related to the drop in Visudyne sales over the same period in the prior year. For the nine months ended September 30, 2010, cost of sales of $11.8 million decreased $0.9 million, or 7%, compared to $12.7 million for the same period in 2009. The decrease was related to the prior period inventory write-down of $4.6 million partially offset by $4.0 million in the current period cost of sales associated with the recognition of deferred revenue related to inventory previously shipped to Novartis for sales outside the U.S.
Research and development, or R&D, expenditures increased 10% to $8.1 million for the three months ended September 30, 2010 compared to $7.4 million in the same period in 2009. For the nine months ended September 30, 2010, R&D expenditures increased 11% to $22.8 million compared to $20.5 million in the same period in 2009. For each period, the increase was due to higher spending on the synthetic retinoid program and QLT091568, as well as strengthening of the Canadian dollar relative to the U.S. dollar, offset by lower spending on the punctal plug program and Visudyne combination studies.
For the three months ended September 30, 2010, selling, general and administrative, or SG&A, expenses increased 19% to $5.4 million compared to $4.5 million for the three months ended September 30, 2009. For the nine months ended September 30, 2010, SG&A expenses increased 22% to $15.2 million compared to $12.5 million for the same period in 2009. The increases were primarily due to the launch of a direct marketing and sales force in the U.S. and the strengthening of the Canadian dollar relative to the U.S. dollar, partially offset by a $0.6 million charge for capital tax in the prior period.
For the three months ended September 30, 2010, interest income decreased 68% to $0.6 million compared to $1.9 million for the same period in 2009. The decrease occurred because the prior period included $1.6 million of interest earned on tax refunds, which was partially offset by $0.3 million of interest earned on the note receivable in the current period. For the nine months ended September 30, 2010, interest income decreased by 58% to $1.6 million compared to $3.8 million for the same period in 2009. The decrease for the nine month period occurred primarily because the prior period included $2.7 million of interest earned on tax refunds partially offset by $0.7 million of interest earned on the note receivable this year.
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