Biotech Values

[DewDiligence]

QLTI quarterly CC was ho-hum:

[The only notable detail was that, according to CEO Paul Hastings, Visudyne+Triamcinilone combo therapy has all but supplanted Visudyne monotherapy as the standard of care among many ophthalmologists. The typical treatment regimen is two intravitreal injections of Triamcinilone, which QLTI considers an attractive alternative to the large number of intravitreal injections required in a course of treatment with Macugen and Lucentis.

Note the info in the last paragraph about QLTI’s cash hoard.]

http://biz.yahoo.com/rc/040427/health_qlt_earns_3.html

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Strong Visudyne sales lift QLT profit; stock sags

Tuesday April 27, 4:33 pm ET
By Rajiv Sekhri

TORONTO, April 27 (Reuters) - Soaring sales of its Visudyne treatment for blindness and a one-time gain from an acquisition helped QLT Inc. (NasdaqNM:QLTI) double its first-quarter profit, the company said on Tuesday.

But shares of the Vancouver, British Columbia-based biotech firm fell hard in Toronto and New York on disappointment that QLT did not raise its sales forecasts following recent announcements of reimbursements for Visudyne use in the United States and Japan.

Earnings rose to $24 million, or 34 cents a share, for the quarter, up from $11.5 million, or 17 cents a share, in the year-before period. QLT said its acquisition of Kinetic Pharmaceuticals in March helped boost earnings.

Sales of Visudyne, which QLT markets through its partner Novartis (NOVN.VX), were $101.1 million in the quarter. [This is the first quarter in which worldwide Visudyne sales have exceeded a US$400M annual run rate.]

QLT's revenues rose 25.3 percent to $41.3 million. The company's chief executive, Paul Hastings, said on Tuesday that QLT now forecasts Visudyne sales of $430 million to $455 million for 2004, a narrower range than its previous forecast of $420 million to $455 million.

In the past few months, U.S. health authorities have increased reimbursement for Visudyne use and have expanded the number of patients eligible to use it. On April 23, Japanese health authorities said they would reimburse patients for Visudyne use.

Visudyne is a treatment for age-related macular degeneration, the leading cause of blindness in people over 50. Treatment of the classic form of the disease was most widely reimbursed by health authorities, but in recent months U.S. health authorities have extended reimbursement to the minimally classic and occult forms of the disease, a move that could potentially double QLT's patient pool of about 60,000.

"Now that we have secured reimbursement for additional users in the United States, received reimbursement for occult in many major markets in Europe, we will carefully watch daily, weekly, monthly and quarterly global sales trends and we commit to further updating our guidance throughout the year when we have ample data to support it," Hastings told a conference call for analysts.

QLT shares dropped 4.5 percent, or $1.37, to close at $28.93 on Nasdaq on Tuesday. In Toronto, they fell nearly 5 percent, or C$1.98, to end the session at C$38.56. The shares have risen 140 percent in the past year in Toronto and 160 percent on Nasdaq.

"I think there was some hope revenue guidance may go up," said Karen Boodram, an analyst with Pacific International Securities in Vancouver. "They have a range and might exceed that range but it is still early. I think they are being cautious."

Investors are also worried about the changing competitive landscape for Visudyne, which currently is the only drug treatment to treat age-related macular degeneration.

Pfizer (NYSE:PFE) is developing a drug, Macugen, with Eyetech Pharmaceuticals Inc. that could be on the market as early as 2005.

In addition, investors are waiting for news on what acquisitions QLT will make. Hastings has offered no specifics during the past three conference calls on his strategy to expand the company's drug development pipeline through purchases. "With half a billion sitting in a war chest there really is room for QLT to go out there and make a big difference," said Marcel Brichon, an analyst with Global Securities Corp. in Vancouver, British Columbia. "I think they're going to strengthen their pipeline at some point."

($1=$1.35 Canadian)
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