Readers are referred to the cautionary notes regarding Forward-looking Information and non-IFRS Financial Measures at the end of this release. Unless noted otherwise, all dollar amounts are in U.S. dollars.
TSX: CNJ
WINNIPEG, Dec. 13, 2013 /CNW/ - Cangene Corporation ("Cangene") today reports its financial results for the three months ended October 31, 2013, and the voting results for the election of directors from its annual meeting of shareholders held on December 12, 2013.
Total revenue for the quarter was $24.6 million, compared with $36.5 million in the prior-year period. The decrease primarily resulted from reduced revenues related to the Company's Botulism Antitoxin (BAT™), along with decreased commercial contract manufacturing revenue. The comparative prior-year quarter also included $3.3 million of revenue from sales of non-specialty plasma, which the Company no longer sells.
Net loss for the current-year quarter was $5.2 million (loss of $0.08 per share), compared with a net income of $5.9 million (earnings of $0.09 per share) in the comparative quarter. In addition to the impact of the reduction in revenue, the current period included higher independent R&D expenses, largely related to the acquisition and development of IB1001 (the Company's investigational hemophilia B therapeutic) and higher professional and consulting expenses related to the sale transaction with Emergent BioSolutions, Inc. announced on December 11, 2013 (included in selling, general and administrative expenses). The comparative prior-year quarter also benefited from the $4.6-million gain on the sale of the Company's U.S.-based plasma centres. These factors were partially offset by a higher margin on biopharmaceutical product sales and a lower income tax expense in the current period.
"During this quarter we were awarded a new $264-million anthrax immune globulin contract as well as an up to $77million vaccinia immune globulin intravenous™ contract extension by the U.S. government. Our WinRho® product also received marketing authorization in Portugal," says John Sedor, president and CEO of Cangene. "We have yet to record benefits of those achievements in our financial results, while we continue to invest in our commercial product pipeline. I believe it is important to remain focused on our long-term strategy of improving margins in and building our commercial biopharmaceutical business by expanding our product portfolio."
At October 31, 2013, Cangene had no debt and a cash balance of $38.7 million, compared with no debt and a cash balance of $46.4 million at the end of the 2013 fiscal year. Cash of $7.1 million was used in operating activities during the current period compared with $1.8 million used in operating activities during the comparative prior-year quarter. The current year included a $4.1-million increase in working capital, which was primarily attributable to increased accounts receivable, inventories and contracts in progress and accounts payable and accrued liabilities.
Operational highlights in the quarter
-
Posted strong balance sheet with a cash position of $38.7 million at October 31, 2013, and no debt.
-
Awarded new biodefence-related contract with U.S. government related to AIGIV [Anthrax Immune Globulin Intravenous (Human)]; first task/delivery order awarded for collection and storage of human anti-anthrax plasma worth approximately $63 million between 2014 and 2017; total potential contract value approximately $264 million.
-
Expanded scope of VIGIV [Vaccinia Immune Globulin Intravenous™ (Human)] contract, which could generate up to approximately $6.9 million in revenue over the next 18 months, with possible optional future services providing $45 million to $77 million more.
-
Received marketing authorization for WinRho® 1500 LQ in Portugal from the National Authority of Medicines and Health Products, I.P.; WinRho® 1500 LQ will be distributed by a local distributor in Portugal under this national licence.
-
Reinitiated clinical studies of our newly acquired hemophilia B therapeutic product candidate, IB1001 (a late-stage intravenous recombinant coagulation Factor IX). This was as a result of the FDA'sJuly 2013 lifting of the clinical hold it had previously placed on the studies.
Election of Directors
The nominees listed in the management information circular for the annual meeting of shareholders of the Corporation held on December 12, 2013, were elected as directors of the Corporation. Voting was conducted by a show of hands as no ballot was requested, but the voting results set forth below are based on proxies received by the Corporation:
|
Number of Shares Voted by Proxy
|
Percentage of Votes Cast by Proxy
| |
FOR
|
WITHHELD
|
FOR
|
WITHHELD
| |
R. Craig Baxter
|
31,596,210
|
22,515
|
99.93%
|
0.07%
| |
D. Bruce Burlington
|
31,606,610
|
12,115
|
99.96%
|
0.04%
| |
Jeremy B. Desai
|
31,171,363
|
447,362
|
98.59%
|
1.41%
| |
Philip R. Johnson
|
31,604,510
|
14,215
|
99.96%
|
0.04%
| |
Jack M. Kay
|
29,159,333
|
2,459,392
|
92.22%
|
7.78%
| |
J. Robert Lavery
|
31,606,610
|
12,115
|
99.96%
|
0.04%
| |
R. Scott Lillibridge
|
31,597,379
|
21,346
|
99.93%
|
0.07%
| |
John A. Sedor
|
31,602,610
|
16,115
|
99.95%
|
0.05%
| |
John A. Vivash
|
31,606,610
|
12,115
|
99.96%
|
0.04%
|
Financial Results
Certain comparative figures in the following financial results have been reclassified to conform with the current year's presentation.
Cangene Corporation
Incorporated under the laws of Ontario
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (unaudited)
|
in thousands of U.S. dollars
|
At October 31, 2013
|
At July 31, 2013
| | | | |
ASSETS
| | | |
Current
| | | |
Cash
|
$
|
38,692
| |
$
|
46,410
| | |
Accounts receivable
|
25,295
| |
21,206
| | |
Inventories and contracts in progress
|
54,360
| |
52,454
| | |
Taxes recoverable
|
2,792
| |
2,090
| | |
Prepaid expenses and deposits
|
8,245
| |
7,342
| | |
Total current assets
|
129,384
| |
129,502
| | |
Property, plant and equipment, net
|
60,293
| |
61,301
| | |
Taxes recoverable
|
16,404
| |
15,849
| | |
Deferred development cost
|
215
| |
178
| | |
Deferred tax
|
12,242
| |
12,374
| | |
Intangible assets, net
|
58,306
| |
59,353
| | |
Other assets
|
8,077
| |
7,961
| | |
Total assets
|
$
|
284,921
| |
$
|
286,518
| | | | | |
LIABILITIES AND EQUITY
| | | |
Current
| | | |
Accounts payable and accrued liabilities
|
$
|
23,768
| |
$
|
20,607
| | |
Provisions for chargebacks
|
4,820
| |
4,530
| | |
Royalty provision
|
553
| |
605
| | |
Royalty liability
|
914
| |
604
| | |
Incentive plan liability
|
1,364
| |
1,436
| | |
Taxes payable
|
12
| |
-
| | |
Current portion of deferred income
|
4,128
| |
3,804
| | |
Total current liabilities
|
35,559
| |
31,586
| | |
Deferred income
|
2,340
| |
3,286
| | |
Royalty provision
|
694
| |
793
| | |
Royalty liability
|
3,559
| |
3,691
| | |
Purchase consideration payable
|
46,341
| |
45,638
| | |
Incentive plan liability
|
334
| |
301
| | |
Deferred share unit liability
|
1,130
| |
1,134
| | |
Deferred tax
|
3,180
| |
3,180
| | |
Total liabilities
|
93,137
| |
89,609
| | | | | | | | |
Equity
| | | |
Share capital
|
50,860
| |
50,860
| | |
Contributed surplus
|
727
| |
638
| | |
Retained earnings
|
140,197
| |
145,411
| | |
Total equity
|
191,784
| |
196,909
| | |
Total liabilities and equity
|
$
|
284,921
| |
$
|
286,518
| |
Cangene Corporation
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS) (unaudited)
|
in thousands of U.S. dollars except share-related data
|
Three months
ended
October 31, 2013
|
Three months
ended
October 31, 2012
| | | | |
Revenues
| | | |
Product sales
|
$
|
9,631
| |
$
|
13,848
| | |
Product services
|
13,309
| |
19,999
| | |
R&D services
|
1,675
| |
2,635
| | |
24,615
| |
36,482
| | | | | |
Cost of sales
| | | |
Product sales
|
6,947
| |
10,603
| | |
Product services
|
7,565
| |
9,587
| | |
R&D services
|
1,077
| |
2,141
| | |
15,589
| |
22,331
| | | | | |
Gross profit
|
9,026
| |
14,151
| | | | | |
Expenses (income)
| | | |
Independent R&D
|
4,773
| |
2,725
| | |
Selling, general and administrative
|
8,460
| |
7,130
| | |
Gain on disposal of assets
|
(125)
| |
(4,680)
| | |
Change in fair value of royalty provision
|
-
| |
(98)
| | |
13,108
| |
5,077
| | | | | |
Income (loss) before the following:
|
(4,082)
| |
9,074
| | | | | |
Financing charges, net
|
(803)
| |
(357)
| | |
Foreign-exchange loss
|
-
| |
(288)
| | | | | |
Income (loss) before taxes
|
(4,885)
| |
8,429
| | | | | |
Tax expense (benefit)
| | | |
Current
|
197
| |
3,165
| | |
Deferred
|
132
| |
(676)
| | |
329
| |
2,489
| | | | | |
Net income (loss) and comprehensive
| | | | | | | |
income (loss) for the period
|
$
|
(5,214)
| |
$
|
5,940
| | | | | |
Earnings (loss) per share
| | | |
Basic and diluted
|
$
|
(0.08)
| |
$
|
0.09
| |
Cangene Corporation
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (unaudited)
|
in thousands of U.S. dollars
|
Share capital
|
Retained
earnings
|
Contributed
surplus
|
Total
| | | | | | |
Balance as at August 1, 2012
|
$
|
50,860
| |
$
|
144,053
| |
$
|
439
| |
$
|
195,352
| | |
Net income for the year ended July 31, 2013
|
-
| |
1,358
| |
-
| |
1,358
| | |
Stock option expense
|
-
| |
-
| |
199
| |
199
| | | | | | | |
Balance as at July 31, 2013
|
50,860
| |
145,411
| |
638
| |
196,909
| | |
Net loss for the three-month period ended October 31, 2013
|
-
| |
(5,214)
| |
-
| |
(5,214)
| | |
Stock option expense
|
-
| |
-
| |
89
| |
89
| | | | | | | |
Balance as at October 31, 2013
|
$
|
50,860
| |
$
|
140,197
| |
$
|
727
| |
$
|
191,784
| | | | | | | |
Balance as at August 1, 2012
|
$
|
50,860
| |
$
|
144,053
| |
$
|
439
| |
$
|
195,352
| | |
Net income for the three-month period ended October 31, 2012
|
-
| |
5,940
| |
-
| |
5,940
| | |
Stock option expense
|
-
| |
-
| |
66
| |
66
| | | | | | | |
Balance as at October 31, 2012
|
$
|
50,860
| |
$
|
149,993
| |
$
|
505
| |
$
|
201,358
| |
Cangene Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
in thousands of U.S. dollars
|
Three months
ended
October 31, 2013
|
Three months
ended
October 31, 2012
| | | | |
OPERATING ACTIVITIES
| | | |
Net income (loss) for the period
|
$
|
(5,214)
| |
$
|
5,940
| | |
Adjustments for:
| | | |
Depreciation of property, plant and equipment
|
1,693
| |
1,901
| | |
Amortization of intangible assets
|
1,090
| |
760
| | |
Gain on disposal of assets
|
(125)
| |
(4,680)
| | |
Taxes recoverable, long-term
|
(555)
| |
(13)
| | |
Deferred income
|
(622)
| |
400
| | |
Incentive plan liabilities
|
(55)
| |
(856)
| | |
Royalty provision
|
(192)
| |
(236)
| | |
Royalty liability
|
-
| |
(228)
| | |
Deferred share unit liability
|
(4)
| |
76
| | |
Change in fair value of royalty provision
|
-
| |
(98)
| | |
Non-cash financing charges
|
822
| |
367
| | |
Deferred tax expense (benefit)
|
132
| |
(676)
| | |
Change in fair value of derivative financial instruments
|
-
| |
(104)
| | |
Stock option expense
|
89
| |
66
| | |
Net change in non-cash working capital balances related
| | | | | |
to operations
|
(4,137)
| |
(4,399)
| | | | | |
Cash used in operating activities
|
(7,078)
| |
(1,780)
| | | | | |
INVESTING ACTIVITIES
| | | |
Purchase of property, plant and equipment, net
|
(685)
| |
(507)
| | |
Acquisition of intangible assets
|
(43)
| |
(3)
| | |
Increase in deferred development cost
|
(37)
| |
-
| | |
Proceeds on disposal of assets
|
125
| |
2,615
| | | | | |
Cash provided by (used in) investing activities
|
(640)
| |
2,105
| | | | | |
Net increase (decrease) in cash during the period
|
(7,718)
| |
325
| | |
Cash, beginning of period
|
46,410
| |
35,870
| | |
Cash, end of period
|
$
|
38,692
| |
$
|
36,195
| | | | | |
Interest paid1
|
$
|
-
| |
$
|
98
| | |
Taxes paid2
|
$
|
175
| |
$
|
838
| |
|
1.
|
Amounts paid and received for interest were reflected as operating cash flows in the
consolidated statements of cash flows.
| |
2.
|
Amounts paid and received for income taxes were reflected as either operating or investing
cash flows in the consolidated statements of cash flows, depending upon the nature of the
underlying transaction.
|
About Cangene Corporation
Cangene Corporation (TSX: CNJ), headquartered in Winnipeg, Canada, is one of the nation's oldest and largest biopharmaceutical companies. It is focused on the development and commercialization of specialty therapeutics. Cangene's products are sold worldwide and include products that have been accepted into the U.S. Strategic National Stockpile. Cangene has offices in three locations across North America. It operates manufacturing facilities in Winnipeg, Manitoba and Baltimore, Maryland (through its wholly owned subsidiary, Cangene bioPharma, Inc.) where it produces its own products and undertakes contract manufacturing for a number of customers. Cangene also operates a plasma-collection facility in Winnipeg, Manitoba under the name Cangene Plasma Resources. Its U.S. sales and marketing office is located in Philadelphia, Pennsylvania. For more information about Cangene, visit the Company's website at www.cangene.com.
Cautionary Note regarding Forward-Looking Information
This document contains forward-looking statements about the Corporation, including its business operations, strategy, and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "intends", "plans", "will", "believes", "estimates", or negative versions thereof, and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, future use, safety and efficacy of unapproved products or unapproved uses of products, and possible future action by the Corporation are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Corporation, economic factors and the biopharmaceutical industry generally. They are not guarantees of future performance. Actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Corporation due to, but not limited to, important factors such as sales levels; fluctuations in operating results; the Corporation's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; the availability and cost of raw materials, and in particular, the cost, availability and antibody concentration in plasma; progress and cost of clinical trials; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential costs associated with its defence as well as general economic, political and market factors in North America and internationally; interest and foreign-exchange rates; business competition; technological change; changes in government action, policies or regulations; decisions by Health Canada, the United States Food and Drug Administration and other regulatory authorities regarding whether and when to approve drug applications that have been or may be filed, as well as their decisions regarding labelling and other matters that could affect the availability or commercial potential of drug candidates; unexpected judicial or regulatory proceedings; catastrophic events; the Corporation's ability to complete strategic transactions; and other factors beyond the control of management.
The reader is cautioned that the foregoing list of important factors is not exhaustive and there may be other factors listed in other filings with securities regulators, including factors set out under "Risk and Uncertainties" in the Corporation's Management Discussion and Analysis, which, along with other filings, is available for review at www.sedar.com. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Other than as specifically required by applicable law, the Corporation has no intention to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Cautionary Note Regarding Non-IFRS Financial Measures
This news release may contain non-IFRS financial measures. Terms by which non-IFRS financial measures are identified include but are not limited to "EBITDA", "net cash", "total assets", "sales" and other similar expressions. Non-IFRS financial measures are used to provide management and investors with additional measures of performance. However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies. Please refer to the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.
SOURCE Cangene Corporation
|
CANGENE CORPORATION 
By 
