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6-K
CIPHER PHARMACEUTICALS INC filed this Form 6-K on 11/15/2016
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Product revenue from Canadian products for the three months ended September 30, 2016 increased by 67% to $1.0 million compared to $0.6 million for the three months ended September 30, 2015. Canadian product revenue performance was driven primarily by Epuris, which had net sales of $0.9 million during the three months ended September 30, 2016. Vaniqa, Actikerall and Beteflam made up the balance of product revenue. Actikerall and Beteflam were both launched in 2016 in the Canadian market.

 

Product revenue for the nine months ended September 30, 2016 increased to $9.9 million compared to $5.4 million for the nine months ended September 30, 2015. The growth in the nine months related to the inclusion of the results from Innocutis that was acquired in April 2015 which were $6.8 million for the nine months ended September 30, 2016 compared to $3.3 million for the nine months ended September 30, 2015. Also contributing to the increase was product revenue from Canadian products that increased to $3.0 million for the nine months ended September 30, 2016 compared to $2.1 million the nine months ended September 30, 2015. The growth in the Canadian product revenue related to all products including Beteflam and Actikerall that launched in 2016.

 

operating Expenses
(IN THOUSANDS OF U.S. DOLLARS)

 

   Three months ended 
September 30
   Nine months ended 
September 30
 
   2016   2015   2016   2015 
Research and development   79    119    445    279 
Selling and marketing   3,209    2,595    10,511    5,483 
General and administrative   4,878    5,737    13,772    12,726 
Amortization and impairment of intangible assets   18,744    1,338    21,833    2,695 
Impairment of goodwill   2,277    -    2,277    - 
Total operating expenses   29,187    9,789    48,838    21,183 


Total operating expenses for the three and nine months ended September 30, 2016 were $29.2 million and $48.8 million compared to $9.8 million and $21.2 million for the three and nine months ended September 30, 2015. The significant increase is related to an impairment charge on intangible assets of $17.3 million and on goodwill of $2.3 million.

 

Research and Development

 

Research and development (“R&D”) expenses decreased slightly for the three months ended September 30, 2016. R&D expense represents the cost of the Company’s drug development activities. During the three months ended September 30, 2016, the Company has reduced its efforts in R&D to focus on obtaining regulatory approvals for products in the Canadian pipeline.

 

R&D expenses for the nine months ended September 30, 2016 was $0.4 million compared to $0.3 million for the nine months ended September 30, 2015. R&D expenses related to regulatory submissions for Canadian products.

 

Selling and Marketing

 

Selling and marketing expense for the three months ended September 30, 2016 was $3.2 million, an increase of $0.6 million or 24% compared to $2.6 million for three months ended September 30, 2015. Selling and marketing expenses are focused on the Company’s commercial products in the U.S. and Canada. The U.S. based selling and marketing expenses increased to $2.4 million for the three months ended September 30, 2016 compared to $2.0 million in the comparative period. The balance of the increase related to selling and marketing expenses in Canada.

 

Selling and marketing expenses for the nine months ended September 30, 2016 was $10.5 million, an increase of $5.0 million or 92% compared to $5.5 million for three months ended September 30, 2015. The increase related to higher selling and marketing expenses in the U.S. as the comparative period only included the operations of Innocutis from April 2015 and an increase in Canadian selling and marketing expenses of $0.8 million.

 

General and Administrative

 

General and administrative (“G&A”) expense for the three months ended September 30, 2016 was $4.9 million, a decrease of $0.8 million or 15% compared to $5.7 million for the three months ended September 30, 2015. The comparative period included a foreign exchange loss of $1.8 million compared to a nominal amount in the current period. Excluding the impact of foreign exchange, G&A expenses increased to $4.9 million for the three months ended September 30, 2016 compared to $3.9 million for the three months ended September 30, 2015. The increase in G&A expenses related to the ongoing strategic review process.

 

 

8 |        Cipher Pharmaceuticals Inc. 2016 Third Quarter Report