FOR IMMEDIATE RELEASE OCTOBER 23, 2003
VANCOUVER, CANADA - QLT Inc. (NASDAQ: QLTI; TSX: QLT) today reported financial results for the third quarter ended September 30, 2003, and updated guidance for 2003. Unless specified otherwise, all amounts are in U.S. dollars and reported under U.S. GAAP.
Q3 2003 Visudyne® Sales
For the three months ended September 30, 2003, Visudyne® sales were $89.8 million. This represents an increase of 28% over sales in the third quarter of 2002. Visudyne sales in the U.S. for the quarter were $46.4 million, representing 52% of total sales for the quarter. This represents an increase of 13% over U.S. sales in the third quarter of 2002. The remaining $43.4 million sales in the rest of the world are up 49% over the same period last year.
Q3 2003 Earnings per Share (EPS)
EPS in the third quarter of 2003 was $0.19, up $0.10 from the prior year's third quarter. The increase was mainly due to the strong Visudyne sales performance, higher than expected profit share from the Visudyne alliance and a milestone payment received from Axcan Pharma.
2003 Annual Guidance
Given the continued strong Visudyne sales growth, the company is updating its Visudyne sales guidance from $335-$350 million to $350-$355 million, or top-line growth over 2002 of 22% to 24%. The company has also updated its EPS guidance for 2003 to $0.62 - $0.67. This update in EPS guidance reflects the new top-line sales guidance and current view on the profit share from the Visudyne alliance.
"We are pleased with the continued strong growth on both top- and bottom- line and the strength of the Visudyne alliance with Novartis," said Paul Hastings, President and Chief Executive Officer. "This result, as well as our results year-to-date and our guidance for the year, helps us position QLT to build the pipeline and deliver immediate and long-term value to our shareholders."
Q3 Results
Revenues
The company's revenues reached $38.3 million in the third quarter, growing by 33% from the third quarter of 2002. Revenues from Visudyne comprised $37.2 million of this total, up 40% over the same period in 2002. QLT's share of Visudyne net profit from the alliance for the third quarter was 32% of Visudyne sales. The company has revised its forecast of its share of profit from the alliance from 29-30% to 30-31% of total Visudyne sales for 2003.
Research and Development (R&D)
Expenditures for R&D of $9.7 million were 10% lower in the third quarter compared to the same period in 2002. The decrease is due mainly to reduced clinical trial expenditures compared to the same period last year.
Selling, General and Administrative (SG&A)
For the third quarter of 2003, SG&A expenditures were $3.7 million representing an increase of 5% over the third quarter of 2002. The increase was due to changes in foreign currency exchange rates.
Cash and Short-term Investments
The company's cash and short-term investments rose from $269 million to $461 million during the third quarter of 2003. The increase was due to the convertible senior notes offering in August, cash from operations, and favorable foreign currency exchange rate effects. QLT expects to have approximately $480 million in cash and short-term investments by the end of 2003.
Clinical Update
Results from the Phase III early retreatment (VER) study with Visudyne showed that the early retreatment regimen did not result in a significant improvement in vision outcomes over the standard retreatment regimen every 3 months. This study involved earlier and more frequent treatments in patients with predominantly classic lesions to reduce the risk of the initial moderate vision loss compared to the standard treatment of Visudyne. These data did reconfirm the vision benefits and safety shown in the original TAP or Treatment in Age-related macular degeneration with Photodynamic therapy study. The results will be presented at the upcoming American Academy of Ophthalmology meeting in November.
About Visudyne
Visudyne therapy was approved in the U.S. in April 2000, and in Europe in July 2000, for the treatment of predominantly classic subfoveal choroidal neovascularization (CNV) due to age-related macular degeneration (AMD), the leading cause of severe vision loss in patients over 50. The treatment has now been approved in more than 70 countries with extended approvals in over 55 countries. QLT's revenue from Visudyne sales consists of 50% of the Visudyne profits of the Visudyne alliance with the Ophthalmics Business Unit of Novartis Pharma AG, and reimbursement for manufacturing and other costs.
QLT Inc. - Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In accordance with United States generally accepted accounting
principles)
Three months ended Nine months ended
(In thousands of United September 30, September 30,
States dollars, except 2003 2002 2003 2002
per share information)
-------------------------------------------------------------------------
(Unaudited)
Revenues
Revenue from Visudyne(R) $ 37,158 $ 26,477 $ 103,767 $ 72,279
Contract research and
development 1,124 2,236 3,495 5,232
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38,282 28,713 107,262 77,511
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Costs and expenses
Cost of sales 6,211 4,715 17,681 13,268
Research and development 9,684 10,702 32,646 29,572
Selling, general and
administrative 3,653 3,474 10,118 12,453
Depreciation 825 799 2,266 2,300
Restructuring - - (394) -
-------------------------------------------------------------------------
20,373 19,690 62,317 57,593
-------------------------------------------------------------------------
Operating income 17,909 9,023 44,945 19,918
Other income and expenses
Net foreign exchange
gains (losses) 406 (985) 3,320 (552)
Interest income 2,443 1,402 6,087 3,337
Interest expense (773) - (773) -
Equity gain (loss) in NSQ - 3 - (276)
Other gains (losses) 1,813 (371) 1,813 (169)
-------------------------------------------------------------------------
3,889 49 10,447 2,340
-------------------------------------------------------------------------
Income before income taxes $ 21,798 $ 9,072 $ 55,392 $ 22,258
Provision for income taxes (8,649) (3,169) (19,545) (7,838)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net Income $ 13,149 $ 5,903 $ 35,847 $ 14,420
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-------------------------------------------------------------------------
Net income per common share
Basic $ 0.19 $ 0.09 $ 0.52 $ 0.21
Diluted $ 0.19 $ 0.09 $ 0.52 $ 0.21
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Weighted average number of
common shares outstanding
(in thousands)
Basic 68,837 68,257 68,686 68,188
Diluted 69,196 68,406 68,882 68,507
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QLT Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In accordance with United States generally accepted accounting
principles)
September December
(In thousands of United States dollars) 30, 2003 31, 2002
-------------------------------------------------------------------------
ASSETS (Unaudited)
Current assets
Cash and cash equivalents $ 229,160 $ 128,138
Short-term investment securities 231,820 79,797
Accounts receivable 34,629 30,186
Inventories 28,882 23,900
Current portion of deferred income tax assets 13,722 17,092
Other 16,108 13,310
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554,321 292,423
-------------------------------------------------------------------------
Property and equipment 40,319 35,281
Deferred income tax assets 1,889 13,966
Other long-term assets 6,073 4,170
-------------------------------------------------------------------------
$ 602,602 $ 345,841
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
Current liabilities
Accounts payable $ 5,334 $ 9,960
Accrued restructuring charge - 2,631
Other accrued liabilities 10,516 7,027
Deferred revenue 8,129 12,678
-------------------------------------------------------------------------
23,979 32,296
-------------------------------------------------------------------------
Long-term debt 172,500 -
-------------------------------------------------------------------------
196,479 32,296
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common shares 395,196 391,716
Accumulated deficit (17,053) (52,901)
Accumulated other comprehensive income (loss) 27,980 (25,270)
-------------------------------------------------------------------------
406,123 313,545
-------------------------------------------------------------------------
$ 602,602 $ 345,841
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As at September, 2003, there were 68,848,275 issued and outstanding common shares and 7,449,205 outstanding options to purchase common shares.
QLT Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In accordance with United States generally accepted accounting
principles)
Three months ended Nine months ended
(In thousands of United September 30, September 30,
States dollars) 2003 2002 2003 2002
-------------------------------------------------------------------------
(Unaudited)
Cash flows from operating
activities
Net income $ 13,149 $ 5,903 $ 35,847 $ 14,420
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 825 799 2,266 2,300
Amortization of deferred
financial expenses 122 - 122 -
Unrealized foreign
exchange (gain) loss (159) (1,225) 1,939 (327)
Deferred income tax
assets 8,649 3,169 19,545 7,838
Restructuring - - (394) -
Equity (gain) loss
in NSQ - (3) - 276
Changes in non-cash
operating assets and
liabilities
Accounts receivable (935) (2,719) 94 878
Inventories (791) 2,423 (1,083) 7,936
Other assets 7,310 1,835 3,093 (5,171)
Accounts payable (2,191) (975) (4,512) (4,678)
Accrued restructuring
charge - - (2,005) -
Other accrued
liabilities 2,623 1,099 2,607 (2,719)
Deferred revenue (1,800) 369 (6,398) 5,970
-------------------------------------------------------------------------
26,802 10,675 51,121 26,723
-------------------------------------------------------------------------
Cash used in investing
activities
Short-term investment
securities (137,636) (53,824) (139,328) (589)
Purchase of property
and equipment (1,284) (458) (3,495) (1,425)
-------------------------------------------------------------------------
(138,920) (54,282) (142,823) (2,014)
-------------------------------------------------------------------------
Cash provided by
financing activities
Long term debt (net) 167,748 - 167,748 -
Issuance of common shares 833 372 3,472 2,929
-------------------------------------------------------------------------
168,581 372 171,220 2,929
-------------------------------------------------------------------------
Effect of exchange rate
changes on cash and
cash equivalents 836 (5,264) 21,504 (1,418)
-------------------------------------------------------------------------
Net increase in cash
and cash equivalents 57,299 (48,499) 101,022 26,220
Cash and cash equivalents,
beginning of period 171,861 144,382 128,138 69,663
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 229,160 $ 95,883 $ 229,160 $ 95,883
-------------------------------------------------------------------------
-------------------------------------------------------------------------
QLT Inc. is a global pharmaceutical company specializing in the discovery, development and commercialization of innovative therapies to treat cancer, eye diseases and niche areas for which treatments can be marketed by a specialty sales force. Combining expertise in ophthalmology, oncology and photodynamic therapy, QLT has commercialized two products to date, including Visudyne therapy, which is the most successfully launched ophthalmology product ever. For more information, visit our web site at www.qltinc.com.
QLT Inc. will hold an analyst and investor conference call to discuss third quarter results on Thursday, October 23rd at 8:30 a.m. EDT (5:30 a.m. PDT). The call will be broadcast live via the Internet at www.qltinc.com. A replay of the call will be available via the Internet and also via telephone at 416-695-5800, access code 1486581.
- 30 -
QLT Inc.:
Vancouver, Canada
Therese Hayes / Tamara Hicks
Telephone: 604-707-7000 or 1-800-663-5486
Fax: 604-707-7001
Visudyne is a registered trademark of Novartis AG.
QLT Inc. is listed on the Nasdaq Stock Market under the trading symbol "QLTI" and on the Toronto Stock Exchange under the trading symbol "QLT."
Certain statements in this press release constitute “forward-looking statements” of QLT within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Forward-looking statements include, but are not limited to, all those which use the word “will,” and those statements with respect to anticipated levels of sales of Visudyne®, estimates of QLT’s 2003 EPS (both GAAP and Operating EPS), estimates of QLT’s share of profit from its alliance with Novartis, estimates of 2003 Visudyne net profits and net income, and statements with respect to the future growth of the Company. These statements are only predictions and actual events or results may differ materially. Factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements include, but are not limited to: the risk that future sales of Visudyne may be less than expected, our future operating results are uncertain and likely to fluctuate, currency fluctuations in our primary markets may impact our financial results, uncertainty of and timing of pricing and reimbursement may limit the future sales of Visudyne, clinical development programs may not be successful or regulatory approvals not obtained, the outcome of the pending patent and securities litigation against us may be unfavorable and have an adverse impact on our financial results, we are dependent on third-parties to commercialise Visudyne and other factors described in detail in QLT’s Annual Information Form on Form 10-K, quarterly reports on Form 10-Q and other filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities. Forward-looking statements are based on our current expectations and, except a required by law, QLT undertakes no obligation to update such information to reflect later events or developments. |
