Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cipher Pharmaceuticals Inc (CPHRF, Financial) reported a significant increase in net revenue for Q3 2024, with a 71% rise compared to the same quarter in the previous year.
- The acquisition of the Natroba business is expected to drive future growth, with plans to insource sales and reduce costs, potentially leading to higher earnings in 2025.
- The company has successfully integrated the Natroba business into its existing infrastructure, providing a strong North American platform for expansion.
- Cipher Pharmaceuticals Inc (CPHRF) has increased its market share for Epuris, a key product, by 4.2% to 50.3% as of September 30, 2024.
- The company has a strong cash position with $9.5 million on hand and a $65 million revolving credit facility, providing flexibility for future acquisitions and growth initiatives.
Negative Points
- Licensing revenue from Absorica decreased significantly by 76% in Q3 2024 compared to the same period in 2023, due to lower product shipments.
- The transition from a co-promotion partner for Natroba is impacting sales and earnings, with full transition expected only by Q1 2025.
- Selling, general, and administrative expenses increased by $4.5 million in Q3 2024, primarily due to costs associated with the Natroba acquisition and restructuring.
- The ongoing North American phase three study for MOB 015 showed lower clinical cure rates than expected, potentially impacting its commercial outlook.
- Can-Fite, a partner for the development of Pleno CF 101, may face challenges in funding the second phase three clinical trial for plaque psoriasis, which could delay progress.
Q & A Highlights
Q: When do you plan to add more US sales representatives for uncovered regions?
A: Bryan Jacobs, President of Cipher Pharmaceuticals Inc, stated that they are currently focusing on maximizing the efficiency of the existing sales team, which includes around 30 outside sales reps. They plan to train and optimize this team before considering expansion.
Q: Have you identified potential products that would fit with Natroba?
A: Craig Mull, Chairman & Interim CEO, confirmed that they have identified potential products that would complement Natroba.
Q: When do you expect to forge your first licensing deal for Natroba?
A: Craig Mull mentioned that Dr. Hamid Ghani, Chief Business Officer, attended a conference in Europe and received significant interest, which they will pursue in the coming months.
Q: Should we expect Q4 to show a more normalized business situation with Natroba, including net income and tax loss credits?
A: Bryan Jacobs explained that the transition from the co-promotion partner will continue into Q1 2025. The utilization of tax losses remains unchanged, and they expect to manage them efficiently.
Q: Can you update us on potential M&A activities and the pipeline?
A: Craig Mull indicated they are working on 2 to 3 serious opportunities, with additional ones being evaluated. These are likely to be licensing deals with royalty payments rather than capital-intensive acquisitions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
