Medicure Reports Financial Results for Quarter Ended March 31, 2017

May 24, 2017

WINNIPEG, May 24, 2017 /CNW/ - Medicure Inc. ("Medicure" or the "Company") (TSXV:MPH, OTC:MCUJF), a specialty pharmaceutical company, today reported its results from operations for the quarter ended March 31, 2017.

Quarter Ended March 31, 2017 Highlights:

• Recorded net revenue of $8.7 million during the quarter ended March 31, 2017 compared to $6.1 million for the quarter ended March 31, 2016, an increase of 43%;
  
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)¹ for the quarter ended March 31, 2017 was negative $1.5 million compared to EBITDA of $2.1 million for the quarter ended March 31, 2016;
  
• Net loss for the quarter ended March 31, 2017 was $5.1 million, compared to net income of $792,000 for the quarter ended March 31, 2016;

 

Financial Results

Net revenues for the quarter ended March 31, 2017 were $8.7 million compared to $6.1 million for the quarter ended March 31, 2016, an increase of 43%. Net revenue from the sale of AGGRASTAT for the quarter ended March 31, 2017 was $7.0 million compared to $6.1 million for the quarter ended March 31, 2016, an increase of 16%. Net revenues for the three months ended March 31, 2017 include $1.7 million in revenue from the Apicore business, which was acquired on December 1, 2016.

The increase in AGGRASTAT revenue compared to the previous year is primarily attributable to an increase in the number of new hospital customers using AGGRASTAT and the increase in market share held by the product. The Company's commercial team continues to work on expanding its customer base. For the quarter ended March 31, 2017, the Company experienced its highest level of AGGRASTAT hospital demand in the history of owning the product. Hospital demand exceeded wholesale demand due to reductions in inventory levels within the wholesale channel. During this period, wholesalers adjusted their target days-on-hand range from 25-30 to 15-20 days.

In regards to revenues from the Apicore business it is important to note that historically Apicore's revenues have been significantly lower in the first quarter of each year when compared to the remainder of the year.

Adjusted EBITDA for the quarter ended March 31, 2017 after adjusting for $61,000 of share-based compensation (a non-cash expense item) was negative $1.5 million compared to adjusted EBITDA of $2.1 million for the quarter ended March 31, 2016 after adjusting for $100,000 of share-based compensation (a non-cash expense item) and $251,000 relating to on-going costs pertaining to the one-time sNDA filing.

Net loss for the quarter ended March 31, 2017 was $5.1 million or $0.33 per share, compared to net income of $792,000 or $0.05 per share for the quarter ended March 31, 2016. The net loss primarily relates to the acquisition of Apicore, which has historically had significantly lower revenues in the first quarter of each fiscal year when compared to the remaining quarters. The Apicore business resulted in higher cost of goods sold by $2.1 million, selling general and administration expenses by $1.6 million and research and development expenses by $4.0 million during the quarter ended March 31, 2017. The Apicore research and development expenses include $2.9 million of amortization relating to property, plant and equipment and intangible assets. As well, finance expense increased due to interest on the loan from Crown Capital, which was obtained by the Company in November 2016. Expenses relating to the AGGRASTAT business also increased with selling, general and administration expenses increasing for the quarter ended March 31, 2017 by approximately $400,000 due to staff additions resulting in higher personnel expenses, and higher selling costs associated with the growth in the AGGRASTAT business. Research and development expenses increased by $502,000 as a result of costs associated with the Company's development of additional cardiovascular products.

At March 31, 2017, the Company had unrestricted cash totaling $10.5 million compared to $12.3 million as of December 31, 2016. The decrease in cash is due to the net loss, after adjusting for non-cash items, higher interest payments made during the quarter relating to the debt obtained in November 2016 and the acquisition of 145,000 Class E common shares of Apicore during the quarter. Cash used in operating activities for the quarter ended March 31, 2017 were $834,000 compared to cash flows from operating activities of $4.8 million for the quarter ended March 31, 2016.

All amounts referenced herein are in Canadian dollars unless otherwise noted.

Notes

⁽¹⁾ The Company defines EBITDA as "earnings before interest, taxes, depreciation, amortization and other income or expense" and Adjusted EBITDA as "EBITDA adjusted for non-cash and one-time items". The terms "EBITDA" and "Adjusted EBITDA", as it relates to the quarters ended March 31, 2017 and 2016 results prepared using International Financial Reporting Standards ("IFRS"), do not have any standardized meaning according to IFRS. It is therefore unlikely to be comparable to similar measures presented by other companies.

Reminder for the Conference Call Tomorrow

Conference Call Info:

Topic: Medicure's Q1 Results
Call date: Thursday, May 25, 2017
Time: 7:30 AM Central Time (8:30 AM Eastern Time)
Canada toll-free: 1 (888) 465-5079 Canada toll: 1 (416) 216-4169
United States toll-free: 1 (888) 545-0687
Passcode: 8196 147#

Webcast: This conference call will be webcast live over the internet and can be accessed from the Medicure investor relations page at the following link: /investors.html

You may request international country-specific access information by e-mailing the Company in advance. Management will accept and answer questions related to the financial results and operations during the question-and-answer period at the end of the conference call. A recording of the call will be available following the event at the Company's website.

About Medicure Inc.

Medicure is a specialty pharmaceutical company focused on the development and commercialization of therapeutics for the U.S. hospital market. The primary focus of the Company is the marketing and distribution of AGGRASTAT (tirofiban hydrochloride) in the United States, where it is sold through the Company's U.S. subsidiary, Medicure Pharma, Inc. Additionally, Medicure holds a majority interest in Apicore. For more information on Medicure please visit www.medicure.com.

About AGGRASTAT

Indications and Usage
AGGRASTAT is indicated to reduce the rate of thrombotic cardiovascular events (combined endpoint of death, myocardial infarction, or refractory ischemia/repeat cardiac procedure) in patients with non-ST elevation acute coronary syndrome (NSTE-ACS).

Dosage and Administration
Administer intravenously 25 mcg/kg within 5 minutes and then 0.15 mcg/kg/min for up to 18 hours. In patients with creatinine clearance ≤60 mL/min, give 25 mcg/kg within 5 minutes and then 0.075 mcg/kg/min.

Clinical Experience
In clinical studies with the HDB regimen, Aggrastat was administered in combination with aspirin, clopidogrel and heparin or bivalirudin to over 8,000 patients for typically ≤24 hours.

Contraindications
Known hypersensitivity to any component of Aggrastat History of thrombocytopenia with prior exposure to Aggrastat Active internal bleeding, or history of bleeding diathesis, major surgical procedure or severe physical trauma within previous month.

Warnings and Precautions
Aggrastat can cause serious bleeding. If bleeding cannot be controlled discontinue Aggrastat. Thrombocytopenia: Discontinue Aggrastat and heparin.

Adverse Reactions
Bleeding is the most commonly reported adverse reaction.

For more information on AGGRASTAT, please refer to Full Prescribing Information.

About Apicore

Apicore is a private, New Jersey based developer and manufacturer of specialty Active Pharmaceutical Ingredients ("APIs") and pharmaceuticals, including over 15 Abbreviated New Drug Applications ("ANDAs"), one of which, is partnered with Medicure. Apicore manufactures over 100 different API's, including over 35 for which Drug Master Files have been submitted to the FDA and 16 that are approved for commercial sale in the U.S. by customers of Apicore. Apicore specializes in the manufacture of difficult to synthesize, high value and other niche API's for many U.S. and international generic and branded pharmaceutical companies. Apicore has two FDA-approved facilities. In the U.S., the Somerset, New Jersey facility can produce a few grams up to 200 kg volumes and in India, the Vadodara, Gujarat facility can produce a few kilograms up to 60 metric tons yearly. Both facilities are equipped with state-of-the-art analytical and research capabilities. For more information, please visit Apicore online at www.apicore.com.

To be added to Medicure's e-mail list, please visit:
http://medicure.mediaroom.com/alerts

Forward Looking Information: Statements contained in this press release that are not statements of historical fact, including, without limitation, statements containing the words "believes", "may", "plans", "will", "estimates", "continues", "anticipates", "intends", "expects" and similar expressions, may constitute "forward-looking information" within the meaning of applicable Canadian and U.S. federal securities laws (such forward-looking information and forward-looking statements are hereinafter collectively referred to as "forward-looking statements"). Forward-looking statements, including the potential for Apicore's revenue and value to increase, and Medicure to secure and advance new products are based on the current assumptions, estimates, analysis and opinions of management of the Company made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors which the Company believes to be relevant and reasonable in the circumstances. Inherent in forward-looking statements are known and unknown risks, uncertainties and other factors beyond the Company's ability to predict or control that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements, and as such, readers are cautioned not to place undue reliance on forward-looking statements. Such risk factors include, among others, the Company's future product revenues, stage of development, additional capital requirements, risks associated with the completion and timing of clinical trials and obtaining regulatory approval to market the Company's products, the ability to protect its intellectual property, dependence upon collaborative partners, changes in government regulation or regulatory approval processes, and rapid technological change in the industry. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: general business and economic conditions; the impact of changes in Canadian-US dollar and other foreign exchange rates on the Company's revenues, costs and results; the timing of the receipt of regulatory and governmental approvals for the Company's research and development projects; the availability of financing for the Company's commercial operations and/or research and development projects, or the availability of financing on reasonable terms; results of current and future clinical trials; the uncertainties associated with the acceptance and demand for new products and market competition. The foregoing list of important factors and assumptions is not exhaustive. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, other than as may be required by applicable legislation. Additional discussion regarding the risks and uncertainties relating to the Company and its business can be found in the Company's other filings with the applicable Canadian securities regulatory authorities or the US Securities and Exchange Commission, and in the "Risk Factors" section of its Form 20F for the year ended December 31, 2016.

AGGRASTAT® (tirofiban hydrochloride) is a registered trademark of Medicure International, Inc.

 

Condensed Consolidated Interim Statements of Financial Position
(expressed in Canadian dollars)
(unaudited)
		March 31, 2017		December 31, 2016
Assets
Current assets:
	Cash and cash equivalents	$	10,508,035	$	12,266,177
	Cash held in escrow	-		12,809,072
	Accounts receivable	8,386,045		17,200,778
	Inventories	12,559,244		12,176,644
	Prepaid expenses	1,705,262		759,077
	Total current assets	33,158,586		55,211,748
Nonâ€'current assets:
	Property, plant and equipment	10,560,561		10,300,639
	Goodwill	47,025,886		47,485,572
	Intangible assets	97,370,195		100,864,817
	Other assets	168,066		161,891
	Deferred tax assets	694,214		701,000
	Total nonâ€'current assets	155,818,922		159,513,919
Total assets		$	188,977,508	$	214,725,667
Liabilities and Equity
Current liabilities:
	Short-term borrowings	$	1,378,147	$	1,383,864
	Accounts payable and accrued liabilities	13,169,000		17,242,366
	Current income taxes payable	633,623		504,586
	Deferred revenue	1,150,364		1,161,608
	Current portion of finance lease obligations	88,377		89,241
	Current portion of longâ€'term debt	2,484,449		2,883,752
	Current portion of royalty obligation	1,882,575		2,019,243
	Derivative option on Apicore Class C shares	32,582,506		32,901,006
	Liability to repurchase Apicore Class E shares	1,997,453		2,700,101
	Total current liabilities	55,366,494		60,885,767
Nonâ€'current liabilities
	Longâ€'term debt	56,263,099		68,180,424
	Finance lease obligations	209,614		242,449
	Royalty obligation	3,630,985		3,666,479
	Due to vendor	2,843,755		2,759,507
	Fair value of Apicore Series A-1 preferred shares	1,738,536		1,755,530
	Other longâ€'term liabilities	137,702		133,999
	Deferred tax liabilities	35,818,190		38,142,775
	Total nonâ€'current liabilities	100,641,881		114,881,163
Total liabilities		156,008,375		175,766,930
Condensed Consolidated Interim Statements of Financial Position (continued)
(expressed in Canadian dollars)
(unaudited)
		March 31, 2017		December 31, 2016
Equity:
	Share capital	124,960,997		124,700,345
	Warrants	2,011,652		2,020,152
	Contributed surplus	6,645,197		6,756,201
	Accumulated other comprehensive (loss) income	(414,178)		681,992
	Deficit	(102,365,478)		(97,289,953)
Total equity attributable to shareholders of the company		30,838,190		36,868,737
	Non-controlling interest	2,130,943		2,090,000
Total equity		32,969,133		38,958,737
Commitments and contingencies
Subsequent events
Total liabilities and equity		$	188,977,508	$	214,725,667

 

 

Condensed Consolidated Interim Statements of Net (Loss) Income and Comprehensive (Loss) Income
(expressed in Canadian dollars)
(unaudited)
Three months ended March 31			2017		2016
Revenue, net
	AGGRASTAT®		$	7,013,396	$	6,068,864
	Active Pharmaceutical Ingredients		1,693,690		-
Total Revenue, net			8,707,086		6,068,864
Cost of goods sold			2,649,091		874,494
Gross Profit			6,057,995		5,194,370
Expenses
	Selling, general and administrative		5,228,193		3,166,165
	Research and development		5,263,529		807,297
			10,491,722		3,973,462
(Loss) income before the undernoted			(4,433,727)		1,220,908
Other expense:
	Revaluation of longâ€'term derivative		-		89,298
			-		89,298
Finance costs (income):
	Finance expense, net		2,158,865		346,880
	Foreign exchange gain, net		(361,149)		(6,920)
			1,797,716		339,960
Net (loss) income before taxes			$	(6,231,443)	$	791,650
Income taxes (expense) recovery
	Current		(133,255)		-
	Deferred		1,289,173		-
Net (loss) income			$	(5,075,525)	$	791,650
Translation adjustment			(1,116,098)		(479,027)
Comprehensive (loss) income			$	(6,191,623)	$	312,623
(Loss) Earnings per share:
	Basic		$	(0.33)	$	0.05
	Diluted		$	(0.33)	$	0.05
Weighted average shares outstanding:
	Basic			15,538,859		14,596,006
	Diluted			15,538,859		16,673,117

 

 

Condensed Consolidated Interim Statements of Cash Flows
(expressed in Canadian dollars)
(unaudited)
For the three months ended March 31				2017		2016
Cash (used in) provided by:
Operating activities:
	Net (loss) income for the period			$	(5,075,525)	$	791,650
	Adjustments for:
		Current income tax expense		133,255		-
		Deferred income tax recovery		(1,289,173)		-
		Amortization of property and equipment		388,363		19,005
		Amortization of intangible assets		2,505,697		420,547
		Shareâ€'based compensation		60,871		140,060
		Finance expense, net		2,158,865		346,880
		Unrealized foreign exchange (gain) loss		(364,289)		6,750
		Revaluation of longâ€'term derivative		-		89,296
	Change in the following:
		Accounts receivable		7,882,110		6,642,899
		Inventories		(382,600)		(200,383)
		Prepaid expenses		(946,185)		667,510
		Other assets		(6,175)		-
		Accounts payable and accrued liabilities		(4,073,366)		(3,769,282)
		Deferred revenue		(11,244)		-
		Other long-term liabilities		3,703		-
	Interest paid			(1,423,431)		(57,720)
	Royalties paid			(395,146)		(305,846)
Cash flows (used in) from operating activities				(834,270)		4,791,368
Investing activities:
	Acquisition of Class E common shares of Apicore			(935,595)		-
	Acquisition of property and equipment			(356,893)		(51,248)
Cash flows used in investing activities				(1,292,488)		(51,248)
Financing activities:
	Exercise of stock options			130,148		246,812
	Exercise of Apicore stock options			122,471		-
	Exercise of warrants			11,000		-
	Repayment of long-term debt			(12,655,040)		(416,667)
	Decrease in cash in escrow			12,809,072		-
	Finance lease payments			(40,178)		-
	Repayment of short-term borrowings			(5,717)		-
Cash flows from (used in) financing activities				371,756		(169,855)
Foreign exchange gain on cash held in foreign currency				(3,140)		(170)
(Decrease) increase in cash				(1,758,142)		4,570,095
Cash and cash equivalents, beginning of period				12,266,177		3,568,592
Cash and cash equivalents, end of period				$	10,508,035	$	8,138,687

 

SOURCE Medicure Inc.

 

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