Cipher Pharmaceuticals Inc. (TSX: DND) today announced its financial and operational results for the fourth quarter and fiscal year ended December 31, 2007.
Fiscal 2007 Summary
- Entered into first commercial licensing and distribution agreement in U.S. market. ProEthic Pharmaceuticals granted the exclusive right to market, sell and distribute CIP-FENOFIBRATE (approved in U.S. under the label Lipofen).
- Successfully completed commercial scale-up and delivery of finished packaged product to ProEthic on schedule.
- Lipofen launched in U.S. market toward the end of the third quarter.
- Received approvable letters from the U.S. Food and Drug Administration (FDA) for CIP-ISOTRETINOIN and CIP-TRAMADOL ER.
- Recorded first commercial revenue during the year; total revenue of $0.5 million for full year.
- Cash of $11.0 million at year end.
"Fiscal 2007 saw us achieve several company firsts, most significantly the launch of Lipofen in the U.S. fenofibrate market," said Larry Andrews, President and CEO of Cipher. "This demonstrates our ability to take an early stage formulation through to final approval and commercialization, further validating our core business model. Advancing CIP-ISOTRETINOIN and CIP-TRAMADOL ER through the remaining regulatory and commercialization milestones remains our top priority this year."
Financial Review
In the fourth quarter of 2007, Cipher recorded total revenue of $162,000, compared with nil in the same period last year. Fourth quarter research and development (R&D) expenses were $0.7 million, compared with $0.4 million in the fourth quarter of fiscal 2006. Operating, general and administrative (OG&A) expenses for the fourth quarter of 2007 were $1.1 million, compared with $1.4 million in the same period last year. Net loss for the three months ended December 31, 2007 was $1.6 million ($0.07 per basic and diluted share), compared with a net loss of $2.0 million ($0.08 per basic and diluted share) in the same period last year.
For the full year, the Company recorded revenue of $0.5 million related to the commercial launch of CIP-FENOFIBRATE in the U.S. and Canada. No commercial revenue was recorded in 2006. R&D expenses for fiscal 2007 were $2.3 million, compared with $8.5 million for fiscal 2006. The decrease in R&D spending reflects the advanced stage of development of the Company's three current products. OG&A expenses for fiscal 2007 were $4.8 million, a slight increase over the $4.0 million recorded in fiscal 2006, as the Company increased personnel to support growth plans. Net loss for fiscal 2007 was $6.4 million ($0.27 per basic and diluted share), compared with net loss of $12.1 million ($0.51 per basic and diluted share) for fiscal 2006.
As at December 31, 2007, Cipher had cash of $11.0 million, compared with $15.1 million as at December 31, 2006.
Drug Development Update
In July 2007, Cipher entered into a licensing and distribution agreement with ProEthic Pharmaceuticals under which ProEthic was granted the exclusive right to market, sell and distribute Lipofen in the United States. The agreement with ProEthic is for a period of 10 years and they have the right to extend the term for additional two-year periods. In late September 2007, ProEthic launched Lipofen 150 mg and 50 mg capsules in the U.S. market with the full effort of its sales and marketing teams. Lipofen is the lead product for ProEthic as it seeks to build its presence in the important primary care space. While it is only a few months since launch, weekly prescriptions have shown steady growth.
During the second quarter of 2007, Cipher received a second approvable letter from the FDA pertaining to its CIP-ISOTRETINOIN NDA. In the letter, the FDA indicated that Cipher's application is approvable subject to the resolution of two remaining issues. In addition to one question related to chemistry, manufacturing and controls, which the Company responded to, the FDA requested that Cipher provide additional clinical safety data. The Company appealed the position taken by the FDA in its approvable letter using the formal dispute resolution process. Subsequently, the Company had two meetings with the FDA as part of the first stage of the formal dispute resolution process. In its most recent response to Cipher, the representative from the FDA agreed with the Division of Dermatology and Dental Product's original view that a Phase III safety study is needed to further demonstrate the safety of CIP-ISOTRETINOIN. In the appeal response and subsequent discussions with the FDA, Cipher was encouraged to work closely with the Division should the Company, or a potential licensing partner, choose to pursue a Phase III safety study. Cipher and its advisors are currently in discussions with the Division regarding the appropriate design of a safety study. Cipher may still choose to continue the formal dispute resolution process, however, regulations do not allow the Company to pursue both options concurrently.
During the second quarter of 2007, Cipher received an approvable letter from the FDA pertaining to its NDA for CIP-TRAMADOL ER, the Company's extended-release formulation of tramadol. In its letter, the FDA indicated that Cipher's application is approvable subject to the resolution of certain issues, including a request for an additional adequate clinical trial to provide further efficacy data. In subsequent discussions, the FDA indicated that the statistical methods used to analyze data from Cipher's clinical trials did not adequately address missing data relating to subjects who dropped out of the trials. In December 2007, Cipher announced that it had appealed the position taken by the FDA using the FDA's formal dispute resolution process. In the written response, the Acting Director of the Office of Drug Evaluation II, Center for Drug Evaluation and Research supported the original approvable action. In a subsequent discussion, the FDA suggested an additional statistical sensitivity analysis of existing clinical data on CIP-TRAMADOL ER as a means to potentially satisfy the requirements for approval. As a consequence, Cipher has suspended its appeal and is conducting the additional statistical analysis. -- www.cnxmarketlink.com
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