BOSTON, Oct. 28, 2014 /PRNewswire/ -- Columbia Laboratories, Inc. (Nasdaq: CBRX) ("Columbia" or "the Company") today announced financial results for the three and nine-month periods ended September 30, 2014.
Third Quarter Financial Highlights
- Total revenues of $11.5 million, including a $2.2 million sale of Legatrin intellectual property, compared to $7.1 million in the third quarter of 2013, an increase of 61%;
- Net income increased to $3.7 million or $0.34 per diluted share, compared to $1.7 million or $0.11 per diluted share in the year-ago period; and
- The quarter ended with $16.4 million in cash and cash equivalents.
"The significant year-over-year increase in third quarter revenues reflects growing in-market demand for CRINONE® progesterone gel, resulting in higher product sales to Merck Serono S.A. including a special shipment for one of its higher-volume, higher-margin markets. The quarter's results also benefited from the monetization of the Legatrin P.M. royalty stream, combined with a full quarter of Molecular Profiles service revenues," stated Frank Condella, CEO.
"Our investment in business development for the services business is generating a predictable increase in customer requests-for-proposals. We continue to leverage the technical capabilities of Molecular Profiles to advance our proprietary extended-release lidocaine vaginal gel development program," continued Mr. Condella.
Third Quarter Financial Results
Third quarter revenues increased 61% to $11.5 million, as compared to $7.1 million in the same period of 2013. The increase reflects higher product and service revenues in addition to a one-time benefit from the sale of intellectual property rights and technology for Legatrin P.M., which contributed $2.2 million to revenues. Excluding the Legatrin P.M. sale, third-quarter revenues rose 30% year-over-year to $9.3 million.
Product revenues increased 8% to $5.9 million for the three months ended September 30, as compared to $5.5 million in the third quarter of 2013. The increase is primarily driven by a special shipment of CRINONE® (progesterone gel) to one of Merck Serono S.A.'s ("Merck Serono") higher-volume, higher-margin markets, as part of a special agreement during the marketing license renewal process. As previously disclosed, Merck Serono built up inventory of CRINONE® during the first three quarters of 2013 in anticipation of a routine license renewal in this one market. During the renewal period, which commenced in the fourth quarter of 2013 and concluded in early September 2014, product could not be shipped without special agreement with local regulatory authorities. Merck Serono received a special agreement in the second quarter, resulting in a third quarter shipment, and normalized shipments under the new marketing license are expected to resume by the end of the fourth quarter.
Service revenues were $2.3 million in the third quarter versus $0.6 million in 2013. Columbia acquired Molecular Profiles Ltd ("Molecular Profiles") on September 12, 2013, resulting in a shortened third quarter last year.
Royalty revenues were $3.3 million in the quarter, up from $1.0 million in the year-ago period, primarily due to the $2.2 million aforementioned sale of intellectual property rights and technology for Legatrin P.M. Columbia had licensed this product to Lil' Drug Store Products approximately fourteen years ago. This transaction allowed the Company to monetize the royalty stream and strengthen its balance sheet.
Gross profit for the third quarter of 2014 was $6.4 million, compared to $3.9 million for the same period in 2013, including the contribution of the Legatrin P.M. sale. Gross profit as a percentage of total revenues was 56% for the third quarter of 2014, compared to 55% in the third quarter of 2013. Excluding the impact of the Legatrin P.M. sale, the gross margin was 45%, which is in line with the Company's normalized gross margin. Both the third quarter of 2013 and 2014 were positively impacted by higher sales of CRINONE®, due to shipments to Merck Serono's higher-margin, higher-volume market.
Total operating expenses increased to $2.9 million for the third quarter of 2014, compared to $2.6 million in the year-ago period. The rise in operating expenses is due to a full quarter of sales and marketing and other administrative costs for the services business, combined with higher research and development costs to advance the Company's proprietary product program, partially offset by the acquisition-related costs to acquire Molecular Profiles in the 2013 period.
The Company recorded net income of $3.7 million, or $0.34 per diluted share, for the third quarter of 2014. The result compares to net income of $1.7 million, or $0.11 per diluted share, for the same period of 2013. Non-GAAP Adjusted EBITDA was $4.5 million for the 2014 period which included higher adjustments for depreciation and amortization, stock-based compensation, and severance and relocation expenses. In the third quarter of 2013, Non-GAAP Adjusted EBITDA was $2.5 million and included primarily adjustments for acquisition related costs associated with the purchase of Molecular Profiles, offset with the change in the fair value of warrants.
Cash and cash equivalents were $16.4 million as of September 30, 2014. Cash flow from operations generated during the three month period ended September 30, 2014 was $5.1 million.
- The routine marketing license renewal for CRINONE® in one of Merck Serono's biggest markets was completed in early September. Normalized shipments are expected to resume by the end of 2014. The new license will be in place for five years.
- George O. Elston, 50, was appointed Chief Financial Officer, effective October 1. Mr. Elston is an experienced finance executive who has been the CFO of several pharmaceutical development and life science companies. He joined Columbia from KBI Biopharma, where he served as Senior Vice President and CFO. Mr. Elston is also a board member at Celldex Therapeutics, Inc. and chair of the audit committee, in addition to serving as a trustee for the Deutsche Bank DBX ETF Trust.
- Columbia sold the intellectual property rights and technology related to Legatrin P.M. to Lil' Drug Store Products. The $2.2 million sale monetizes the royalty stream and strengthens Columbia's balance sheet.
- COL-1077, an extended release lidocaine vaginal gel for pain related to gynecological procedures is progressing as Columbia's next proprietary drug program.
- Molecular Profiles unveiled the ROADMAP to Clinical Trials platform at the annual CPhI/ICSE Worldwide event in Paris in October. This includes the new enabling technologies screening services which aim to support customers with the rapid development of both standard and complex drug products.
"Normalized shipments of CRINONE® to one of Merck Serono's higher-volume, higher-margin markets are expected to resume by the end of the year, following the completion of the marketing license renewal in early September. In-market sales of CRINONE® continue to be strong, growing at an annualized rate in the mid-teens. Looking forward to 2015, the resumption of normalized shipments should result in an expansion of product sales."
"We continue to broaden our services offerings including new cutting-edge technical capabilities that we believe will translate into increased revenue over time," concluded Mr. Condella.
Including the $2.2 million contribution from the Legatrin P.M. sale, the Company now expects full year 2014 revenue growth of 14% to 16%.
As previously announced, Columbia's management will hold a conference call to discuss financial results for the third quarter ended September 30, 2014, as follows:
Tuesday, October 28, 2014
8:30 am EDT
Toll free: (866) 374-4635 (U.S.) or (855) 669-9657 (Canada)
International: (412) 902-4218
Webcast (live & archive):
The teleconference replay will be available approximately one hour after completion through Wednesday, November 5, 2014, at (877) 344-7529 (U.S.) or (412) 317-0088 (International). The conference ID for the replay is 10054330. The archived webcast will be available for one year via the aforementioned URLs.
About Columbia Laboratories
Columbia Laboratories, Inc. is a pharmaceutical development company providing formulation development, clinical trial manufacturing, and advanced analytical and consulting services to the pharmaceutical industry. The Company is also leveraging a successful heritage in developing women's health products and is advancing a proprietary product program. Its most successful product to date, CRINONE® 8% (progesterone gel), is marketed by Actavis, Inc. in the U.S. and by Merck Serono S.A. in over 60 additional countries worldwide. For more information, please visit www.columbialabs.com.
Forward Looking Statements
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," "anticipates," "potential," "should," and similar expressions, which are generally not historical in nature. These include all statements relating to expected financial performance and future business or product developments. Management believes that these forward-looking statements are reasonable as and when made. However, 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. These statements are based on management's current expectations and Columbia does not undertake any responsibility to revise or update any forward-looking statements contained herein, except as expressly required by law. For a discussion of certain risks and uncertainties associated with Columbia's forward-looking statements, please review Columbia's reports filed with the SEC, including, but not limited to, its Annual Report on Form 10-K for the period ended December 31, 2013.
Investor Relations Contact:
MBS Value Partners
+212 661 7004
COLUMBIA LABORATORIES, INC.
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Accounts receivable, net
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Deferred tax assets
Other noncurrent assets
Liabilities and stockholders' equity:
Total current liabilities
Deferred revenue, net of current portion
Note payable, net of current portion
Common stock warrant liability
Commitments and Contingencies
Series C preferred stock
Total stockholders' equity
Total liabilities and stockholders' equity
COLUMBIA LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
Total net revenues
Cost of product revenues
Cost of service revenues
Total cost of revenues
Sales and marketing
Acquisition related expenses
Research and development
General and administrative
Total operating expenses
Income from operations
Interest (expense) income, net
Change in fair value of stock warrants
Other income (expense), net
Income before income taxes
Income tax (benefit) provision
Diluted net income per share
Diluted weighted average shares outstanding
Basic net income per share
Basic weighted average shares outstanding
Non-GAAP Financial Presentation
To supplement our consolidated financial statements presented in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), Columbia uses non-GAAP measures. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The non-GAAP financial measure included in this press release presents adjusted EBITDA, which is a financial measure calculated by excluding from net income: acquisition-related costs; severance and relocation costs; the change in the fair value of common stock warrant liability; depreciation and amortization; stock-based compensation expense; interest expense (income) net; and income taxes. This exclusion may be different from, and therefore not comparable to, similar measures used by other companies.
Columbia's management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our core business operating results. Columbia believes that both management and investors may benefit from referring to this non-GAAP financial measure in assessing Columbia's performance and when planning, forecasting and analyzing future periods. This non-GAAP financial measure also facilitates management's internal comparisons to Columbia's historical performance and our competitors' operating results. Columbia believes that this non-GAAP measure may be useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making.
COLUMBIA LABORATORIES, INC.
Reconciliation of GAAP Net Income to Adjusted EBITDA
Three Months Ended
Nine Months Ended
Non-GAAP adjustments to net income:
Depreciation and amortization
Stock-based compensation expense
Change in fair value of common stock warrant liability
Income tax (benefit) provision
Severance and relocation
Interest expense (income), net
Total Non-GAAP adjustments to net income
SOURCE Columbia Laboratories, Inc.