Columbia Laboratories Reports First Quarter 2013 Financial Results
<0> Columbia Laboratories, Inc.Jonathan Lloyd Jones, 973-486-8818Vice President & CFOorThe Trout Group LLCSeth Lewis, 646-378-2952Senior Vice President </0>
Columbia Laboratories, Inc. (NasdaqCM: CBRX) today reported financial results for the three-month period ended March 31, 2013. Highlights of the first quarter include:
“Our first quarter results mark Columbia's fourth consecutive quarter of profitability and third consecutive quarter of positive operating cash flows, and reflect the ongoing promotion and growth of CRINONE by Actavis and Merck Serono in their respective territories,” said Frank Condella, Columbia's President and CEO. “In April, we extended our agreement with Merck Serono for another five-year term, which provides long-term stability for Columbia and surety of supply for Merck Serono through May 2020. We look forward to continued positive cash flow from our core business going forward while we explore Columbia's strategic options.”
Total net revenues for the first quarter of 2013 were comprised of net product revenues primarily for international sales of CRINONE (progesterone gel) to Merck Serono, and royalties from Actavis on Actavis' total net sales of CRINONE in the U.S.
Net product revenues increased by $2.3 million to $5.4 million in the first quarter of 2013, compared to $3.1 million in the first quarter of 2012.
Total royalty revenues were $0.9 million in the first quarter of 2013, compared to $0.7 million in the first quarter of 2012, reflecting increased royalty revenues from Actavis on CRINONE products. Columbia expects to continue to receive from Actavis royalty revenues of 10% of U.S. net sales of certain progesterone products, including CRINONE and the next-generation CRINONE product, for the foreseeable future.
As a result, total net revenues for the first quarter of 2013 were $6.3 million, compared to $3.8 million for the first quarter of 2012, an increase of 65%.
Gross profit increased by $1.6 million to $3.5 million in the three months ended March 31, 2013 as compared to $1.8 million in the three months ended March 31, 2012. Gross profit as a percentage of total net revenues was 55% for the first quarter of 2013, compared to 48% in the first quarter of 2012. Gross profit as a percentage of net product revenues was 47% for the first quarter of 2013, versus 36% for the same period in 2012. The higher profit margins in the 2013 quarter resulted primarily from the shift in sales mix to Merck Serono in favor of higher-margin country markets.
General and administrative expenses decreased by $0.1 million to $2.5 million for the three months ended March 31, 2013 compared with $2.6 million for the three months ended March 31, 2012. Our ongoing general and administrative expenses decreased by $0.4 million, or 20%, from $2.2 million to $1.8 million. We incurred $0.2 million in severance and retention expenses in the three months ended March 31, 2013 compared with $0.4 million in severance expenses for the three months ended March 31, 2012. This decrease was offset by an increase of $0.5 million in professional fees associated with business development activities.
There were no research and development costs in the first quarter of 2013, compared to $0.6 million in the 2012 quarter. The decrease reflects the elimination of our R&D activities in 2012.
As a result, total operating expenses decreased to $2.5 million in the first quarter of 2013 as compared to $3.1 million for the corresponding quarter in 2012.
Operating income was $1.0 million in the first quarter of 2013, compared to an operating loss of $1.3 million in the prior year period. The change primarily reflects the $1.6 million increase in gross profit and a $0.6 million decrease in total operating expenses in the first quarter of 2013.
Other income aggregated to $0.2 million for the first quarter of 2013, compared to $6.2 million in the first quarter of 2012. Other income primarily reflects the recognition of the change in the fair value of the warrants issued in conjunction with the October 2009 stock issuance. During the quarter ended March 31, 2013, the decrease in Columbia's stock price resulted in a gain of $0.2 million as compared with a gain of $6.3 million for the corresponding quarter in 2012.
As a result, the Company reported net income of $1.2 million, or $0.01 per basic and diluted share, compared to net income of $5.0 million, or $0.06 per basic and $(0.01) per diluted share, for the first quarter of 2012.
At March 31, 2013, Columbia had cash, cash equivalents and short-term investments of $29.2 million, compared to cash, cash equivalents and short-term investments of $28.6 million at December 31, 2012.
On April 4, 2013, Columbia amended its license and supply agreement with Merck Serono for CRINONE through May 2020, representing an extension of five years beyond the current term. Under the terms of the amended license and supply agreement, Columbia will remain the sole supplier of CRINONE to Merck Serono and will continue to sell CRINONE to Merck Serono on a country by country basis. From 2014 through 2020, the sourcing conditions for Merck Serono will include incremental volume discounts to incentivize Merck Serono to continue developing existing markets and investing in entry into new markets.
As previously announced, Columbia Laboratories will hold a conference call to discuss financial results for the first quarter ended March 31, 2013, as follows:
The teleconference replay will be available two hours after completion through Thursday, May 16, 2013, at (855) 859-2056 (U.S. & Canada) or (404) 537-3406. The conference ID for the replay is 52824557. The archived webcast will be available for one year on the Company's website, , in the 'Investor' section under 'Events'.
Columbia Laboratories, Inc. is a publicly traded specialty pharmaceutical company with a successful history of developing proprietary, vaginally administered products for women’s health indications. The Company receives sales and royalty revenues from CRINONE (progesterone gel), which is marketed by Actavis, Inc. in the United States and by Merck Serono S.A. in over 60 foreign countries. Columbia's press releases and other company information are available online at .
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This communication contains forward-looking statements, which statements are indicated by the words “may,” “will,” “plans,” “believes,” “expects,” “intends,” “anticipates,” “potential,” “should,” and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Factors that might cause future results to differ include, but are not limited to, the following: Actavis' and Merck Serono's success in marketing CRINONE for use in infertility in their respective markets; successful development by Actavis of a next-generation vaginal progesterone product for the U.S. market; difficulties or delays in manufacturing; the availability and pricing of third-party sourced products and materials; successful compliance with FDA and other governmental regulations applicable to manufacturing facilities, products and/or businesses; changes in the laws and regulations; the ability to obtain and enforce patents and other intellectual property rights; the impact of patent expiration; the impact of competitive products and pricing; the cost of evaluating potential strategic transactions; the cost of the Company's relocation to Boston; Columbia's ability to regain compliance with the Nasdaq minimum closing bid price rule; the strength of the United States dollar relative to international currencies, particularly the euro; competitive economic and regulatory factors in the pharmaceutical and healthcare industry; general economic conditions; and other risks and uncertainties that may be detailed, from time-to-time, in Columbia's reports filed with the SEC. Columbia does not undertake any responsibility to revise or update any forward-looking statements contained herein.
CRINONE is a registered trademark of Actavis, Inc.