FOR IMMEDIATE RELEASE JULY 28, 2005
VANCOUVER, CANADA—QLT Inc. (NASDAQ: QLTI; TSX: QLT) today reported financial results for the second quarter ended June 30, 2005. Unless specified otherwise, all amounts are in U.S. dollars and in accordance with U.S. GAAP.
2005 Q2 Results
Sales
Visudyne® worldwide sales for the second quarter were $129.0 million, an increase of 18.0% over the second quarter of 2004. Visudyne sales in the U.S. for the quarter were $50.1 million, down 3.8% over the same period last year. Visudyne sales in the rest of the world were $78.9 million, an increase of 37.9% over the same period last year.
Eligard® worldwide sales for the second quarter were $24.4 million, up 10.3% from the second quarter of 2004. Eligard sales in the U.S. for the quarter were $15.5 million, down $2.1 million or 11.9% over the same period last year. Eligard sales in the rest of the world were $8.9 million, almost double sales of $4.5 million in the same period last year.
Sales of dermatology products from our Sandoz alliance for the second quarter were $3.5 million, compared to $2.4 million in the same period last year.
Total product sales were $157.7 million, up 17.5% over total product sales in the second quarter of 2004.
“We are pleased with the growth of our total product line in the second quarter, particularly the strong growth for Visudyne, and remain on track to achieve our annual guidance for both Visudyne and earnings per share,” said Paul Hastings, President and Chief Executive Officer of QLT Inc. “We expect Visudyne to continue to play a significant role in the treatment of AMD, as a single agent or in combination with other approaches to treating this disease.”
Diluted Earnings Per Share (EPS)
Non-GAAP EPS, which excludes the restructuring charge and amortization of acquired intangible assets, was $0.19 in the second quarter, while GAAP EPS was $0.17. A reconciliation between non-GAAP EPS and GAAP EPS for the second quarter of 2005 is provided in Exhibit 1 of this press release.
Prior year GAAP results reflect operations before our merger in the fourth quarter last year. Therefore, we have provided non-GAAP (adjusted pro forma) results, which reflect ongoing results as if the merger had occurred just prior to January 1, 2004. A reconciliation between non-GAAP results and GAAP results for the second quarter of 2004 is provided in Exhibit 3. For the second quarter of 2004, non-GAAP EPS, excluding the charge for amortization of intangibles, was $0.14, while GAAP EPS was $0.20.
Growth in non-GAAP EPS from $0.14 in the second quarter of 2004 to $0.19 in 2005 was primarily attributable to growth in Visudyne revenue.
QLT Revenues
The Company’s revenues were $63.4 million in the second quarter, up 43% from revenues in the same period last year, and up 4% compared to pro forma (non-GAAP) revenues in the same period last year.
Revenue from Visudyne was $48.8 million in the second quarter, up 13% from the second quarter last year. QLT’s share of profit from Visudyne sales increased to 30.8% in the second quarter, up from 30.3% in the same period last year.
Research and Development (R&D) Expense
R&D expense in the second quarter was $20.1 million, up $8.8 million from R&D expense in the second quarter last year primarily due to our merger. R&D expense was up $1.4 million from non-GAAP R&D expense of $18.6 million last year as spending was higher on our lemuteporfin BPH and octreotide programs.
Selling, General and Administrative (SG&A) Expense
For the second quarter of 2005, SG&A expense was $4.3 million, up $0.7 million from prior year second quarter expense, but down $1.4 million from 2004 non-GAAP SG&A expense. The year-over-year decrease from non-GAAP expense occurred primarily due to lower compensation costs, in part related to synergies from the merger.
Cash and Short-term Investments
The company’s cash and short-term investments increased from $408 million to $415 million during the second quarter of 2005.
2005 Revised Annual Guidance
Based on recent events and current trends in Eligard sales, QLT is revising its Eligard sales range from $140-$160 million to a new range of $90-$115 million, which represents top-line growth for Eligard of 7% to 37% over 2004. In total, 2005 sales from all QLT products, including dermatology, are now forecast at $600 to $650 million, compared to the previous guidance of $650 to $700 million, assuming foreign currency exchange rates remain approximately the same.
Based on the revised sales guidance for Eligard, QLT is revising its revenue range from $255-$280 million to a new range of $245-$265 million, which represents growth of 32% to 42% over 2004 revenue.
Financial Tables
To view the financial tables included in this news release, click here.
About QLT
QLT Inc. is a global biopharmaceutical company specializing in developing treatments for cancer, eye diseases, dermatological and urological conditions. We have combined our expertise in the discovery, development, commercialization and manufacture of innovative drug therapies with our unique technology platforms to create highly successful products such as Visudyne and Eligard. For more information, visit our web site at www.qltinc.com.
QLT Inc. will hold an investor conference call to discuss the second quarter results on Thursday, July 28 at 8:30 a.m. ET (5:30 a.m. PT). The call will be broadcast live via the Internet at
www.qltinc.com. To participate on the call, please dial 1-800-525-6384 (North America) or 780-409-1668 (International) before 8:30 a.m. ET. A replay of the call will be available via the Internet and also via telephone at 1-800-677-1564 (North America) or 402-220-1442 (International), access code 7700249.
QLT Inc.:
Vancouver, Canada
Tamara Hicks
Telephone: 604-707-7000 or 1-800-663-5486
Fax: 604-707-7001
Visudyne is a registered trademark of Novartis AG.
Eligard is a registered trademark of Sanofi-aventis
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."
A full explanation of how the Company determines and recognizes revenue from Visudyne and Eligard sales is contained in the financial statements contained in the Company’s annual and periodic reports. Visudyne sales are product sales by Novartis under its alliance with QLT. Eligard sales are product sales by third parties pursuant to contractual agreements with the Company.
The second quarter financial results for QLT in this press release are preliminary and unaudited and are not a complete disclosure of our quarterly financial results. 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, the statements as to the Company’s projections of 2005 Visudyne sales, 2005 EPS, 2005 sales for Eligard, 2005 sales for all QLT products and 2005 revenues for QLT, as well as statements pertaining to the Company’s expectations about the future role of Visudyne in the treatment of age-related macular degeneration (AMD). These statements are only predictions and there are a number of risks, uncertainties and other factors which could cause actual events or results to differ materially, including but not limited to: the risk that future sales of Visudyne, Eligard and our other products may be less than expected due to increased competition or for other reasons, 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 our products, clinical development programs may not be successful, 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, Eligard and our other products and other factors described in detail in QLT’s Annual Information Form and Annual Report 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 QLT assumes no obligation to update such information to reflect later events or developments, except as required by law.
