Columbia Laboratories Inc. (CBRX, Financial) filed Quarterly Report for the period ended 2010-09-30.
Columbia Laboratories Inc. has a market cap of $116.1 million; its shares were traded at around $1.34 with and P/S ratio of 3.6.
General and administrative expenses increased 61% to $12.5 million in the nine months ended September 30, 2010 as compared to $7.7 million in the nine months ended September 30, 2009. The increased expense of $4.8 million in 2010 was attributable to $4.2 million in costs related to the Watson Transactions, $0.6 million in incremental severance costs and $0.3 million in stock compensation costs from the accelerated vesting of all stock options and restricted shares as a result of the Watson Transactions, offset by lower other legal costs. General and administrative expenses include payroll, employee benefits, equity compensation and other personnel-related costs associated with the finance, legal, regulatory affairs, information technology, facilities, certain human resources and other administrative personnel, as well as legal costs and other administrative fees.
We purchased the U.S. marketing rights for CRINONE from Merck Serono in December 2006 for $33.0 million. In the second quarter of 2007, we recognized a $1.0 million adjustment to the purchase price to reflect contingent liabilities for Merck Serono sales returns. The $33.0 million charge was being amortized over 6.75 years, and the $1.0 million charge was being amortized over 6.5 years. Amortization of the acquisition cost for the CRINONE U.S. marketing rights was $2.5 million and $3.8 million for the nine months ended September 30, 2010 and 2009, respectively; amortization of these acquisition costs ceased as a result of the closing of the Watson Transactions on July 2, 2010. The remaining net book value of these acquisition costs at the time of the Watson Transactions was charged against the deferred gains on the sale of the progesterone assets to Watson.
Selling and distribution expenses increased 26% to $3.9 million in the three months ended September 30, 2010, as compared to $3.1 million in the three months ended September 30, 2009. Increases in expenses were a result of the establishment of a reserve of $2.2 million for back royalties and pre-judgment interest that may be owed to Bio-Mimetics, Inc. if an ongoing dispute is not resolved in Columbia s favor, $0.9 million in stock compensation costs from the accelerated vesting of all stock options and restricted shares as a result of the Watson Transactions and approximately $0.2 million in severance costs were offset by reductions in expenses of $2.5 million as the commercial organization was shut down following the closing of the Watson Transactions on July 2, 2010. Historically, selling and distribution expenses have included payroll, employee benefits, equity compensation and other personnel-related costs associated with sales and marketing personnel, and advertising, market research data capture, promotions, tradeshows, seminars, other marketing related programs and distribution costs. In summary, in the three months ended September 30, 2010, sales force and management costs were $0.2 million, product marketing expenses were $0.2 million and sales information and distribution costs were $0.2 million, in addition to the Bio-Mimetics reserve, stock compensation and severance costs mentioned above. The comparable costs for the three months ended September 30, 2009 were $1.8 million for sales force and management costs, $1.0 million in product marketing expenses and $0.3 million for sales information and distribution costs.
Net cash used in operating activities for the nine months ended September 30, 2010 was $8.9 million and resulted primarily from $10.2 million in net operating losses after applying non-cash charges and decreases in working capital of $1.3 million. The net loss of $17.2 million in the first nine months of 2010 included non-cash items for depreciation, amortization, the loss on debt extinguishment, stock-based compensation, provision for sales returns, and non-cash interest expense, which totaled $7.0 million, leaving a net cash loss of $8.9 million. Accounts receivable decreased by $1.7 million from the fourth quarter of 2009, primarily as a result of the sale of the CRINONE/PROCHIEVE assets to Watson and the collection of outstanding receivables. Inventories grew by $0.3 million during the period to meet specific customer orders. Accounts payable decreased by $1.7 million due primarily to payments for marketing programs and for the PREGNANT Study. Other accrued expenses increased by $0.7 million and is related to a multitude of increases and decreases in the accruals including the $2.2 million Bio-Mimetics reserve offset by lower bonuses and interest during the nine months ended September 30, 2010.
Net cash used in operating activities of $5.8 million for the nine months ended September 30, 2009 resulted primarily from $6.3 million in net operating losses after applying non-cash charges and increases in working capital of $0.5 million. The net loss of $16.4 million in the nine months ended September 30, 2009 included non-cash items for depreciation, amortization, stock-based compensation, provision for sales returns and non-cash interest expense, which totaled $10.1 million, leaving a net cash loss, net of non-cash items, of $6.3 million for the nine months ended September 30, 2009. Inventories decreased by $0.1 million during this period. Accounts payable increased by $0.4 million and other accrued expenses decreased by $1.0 million.
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Columbia Laboratories Inc. has a market cap of $116.1 million; its shares were traded at around $1.34 with and P/S ratio of 3.6.
Highlight of Business Operations:
Selling and distribution expenses increased 9.8% to $9.9 million in the nine months ended September 30, 2010, as compared to $9.0 million in the nine months ended September 30, 2009. Increases in expenses were a result of the establishment of a reserve of $2.2 million for back royalties and pre-judgment interest that may be owed to Bio-Mimetics, Inc., if an ongoing dispute is not resolved in Columbia s favor, $0.9 in stock compensation costs from the accelerated vesting and modification of all stock options and restricted shares as a result of the Watson Transactions and approximately $0.5 million in severance costs were offset by reductions in expenses of $2.5 million as the direct selling and marketing organization was shut down following the closing of the Watson Transactions on July 2, 2010. Selling and distribution expenses include payroll, employee benefits, equity compensation and other personnel-related costs associated with sales and marketing personnel, and advertising, market research, market data capture, promotions, tradeshows, seminars, other marketing related programs and distribution costs. In summary, in the first nine months of 2010, sales force and management costs were $3.7 million, product marketing expenses were $1.9 million and sales information and distribution costs were $0.7 million, in addition to the Bio-Mimetics reserve, stock compensation expense and severance costs mentioned above. The comparable costs for the first nine months of 2009 were $5.5 million for sales force and management costs, $2.8 million in product marketing expenses and $0.7 million for sales information and distribution costs.General and administrative expenses increased 61% to $12.5 million in the nine months ended September 30, 2010 as compared to $7.7 million in the nine months ended September 30, 2009. The increased expense of $4.8 million in 2010 was attributable to $4.2 million in costs related to the Watson Transactions, $0.6 million in incremental severance costs and $0.3 million in stock compensation costs from the accelerated vesting of all stock options and restricted shares as a result of the Watson Transactions, offset by lower other legal costs. General and administrative expenses include payroll, employee benefits, equity compensation and other personnel-related costs associated with the finance, legal, regulatory affairs, information technology, facilities, certain human resources and other administrative personnel, as well as legal costs and other administrative fees.
We purchased the U.S. marketing rights for CRINONE from Merck Serono in December 2006 for $33.0 million. In the second quarter of 2007, we recognized a $1.0 million adjustment to the purchase price to reflect contingent liabilities for Merck Serono sales returns. The $33.0 million charge was being amortized over 6.75 years, and the $1.0 million charge was being amortized over 6.5 years. Amortization of the acquisition cost for the CRINONE U.S. marketing rights was $2.5 million and $3.8 million for the nine months ended September 30, 2010 and 2009, respectively; amortization of these acquisition costs ceased as a result of the closing of the Watson Transactions on July 2, 2010. The remaining net book value of these acquisition costs at the time of the Watson Transactions was charged against the deferred gains on the sale of the progesterone assets to Watson.
Selling and distribution expenses increased 26% to $3.9 million in the three months ended September 30, 2010, as compared to $3.1 million in the three months ended September 30, 2009. Increases in expenses were a result of the establishment of a reserve of $2.2 million for back royalties and pre-judgment interest that may be owed to Bio-Mimetics, Inc. if an ongoing dispute is not resolved in Columbia s favor, $0.9 million in stock compensation costs from the accelerated vesting of all stock options and restricted shares as a result of the Watson Transactions and approximately $0.2 million in severance costs were offset by reductions in expenses of $2.5 million as the commercial organization was shut down following the closing of the Watson Transactions on July 2, 2010. Historically, selling and distribution expenses have included payroll, employee benefits, equity compensation and other personnel-related costs associated with sales and marketing personnel, and advertising, market research data capture, promotions, tradeshows, seminars, other marketing related programs and distribution costs. In summary, in the three months ended September 30, 2010, sales force and management costs were $0.2 million, product marketing expenses were $0.2 million and sales information and distribution costs were $0.2 million, in addition to the Bio-Mimetics reserve, stock compensation and severance costs mentioned above. The comparable costs for the three months ended September 30, 2009 were $1.8 million for sales force and management costs, $1.0 million in product marketing expenses and $0.3 million for sales information and distribution costs.
Net cash used in operating activities for the nine months ended September 30, 2010 was $8.9 million and resulted primarily from $10.2 million in net operating losses after applying non-cash charges and decreases in working capital of $1.3 million. The net loss of $17.2 million in the first nine months of 2010 included non-cash items for depreciation, amortization, the loss on debt extinguishment, stock-based compensation, provision for sales returns, and non-cash interest expense, which totaled $7.0 million, leaving a net cash loss of $8.9 million. Accounts receivable decreased by $1.7 million from the fourth quarter of 2009, primarily as a result of the sale of the CRINONE/PROCHIEVE assets to Watson and the collection of outstanding receivables. Inventories grew by $0.3 million during the period to meet specific customer orders. Accounts payable decreased by $1.7 million due primarily to payments for marketing programs and for the PREGNANT Study. Other accrued expenses increased by $0.7 million and is related to a multitude of increases and decreases in the accruals including the $2.2 million Bio-Mimetics reserve offset by lower bonuses and interest during the nine months ended September 30, 2010.
Net cash used in operating activities of $5.8 million for the nine months ended September 30, 2009 resulted primarily from $6.3 million in net operating losses after applying non-cash charges and increases in working capital of $0.5 million. The net loss of $16.4 million in the nine months ended September 30, 2009 included non-cash items for depreciation, amortization, stock-based compensation, provision for sales returns and non-cash interest expense, which totaled $10.1 million, leaving a net cash loss, net of non-cash items, of $6.3 million for the nine months ended September 30, 2009. Inventories decreased by $0.1 million during this period. Accounts payable increased by $0.4 million and other accrued expenses decreased by $1.0 million.
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