Exhibit 99.1
[QLT Inc. logo] QLT Inc. 887 Great Northern Way t 604.707.7000
Vancouver, BC Canada V5T 4T5 f 604.707.7001
www.qltinc.com
news release
QLT ANNOUNCES Q3 RESULTS FOR 2003 AND UPDATES GUIDANCE
FOR IMMEDIATE RELEASE OCTOBER 23, 2003
Vancouver, Canada--QLT Inc. (NASDAQ: QLTI; TSX: QLT) today reported financial
results for the third quarter ended September 30, 2003, and updated guidance for
2003. Unless specified otherwise, all amounts are in U.S. dollars and reported
under U.S. GAAP.
Q3 2003 VISUDYNE(R) SALES
For the three months ended September 30, 2003, Visudyne(R) sales were $89.8
million. This represents an increase of 28% over sales in the third quarter of
2002. Visudyne sales in the U.S. for the quarter were $46.4 million,
representing 52% of total sales for the quarter. This represents an increase of
13% over U.S. sales in the third quarter of 2002. The remaining $43.4 million
sales in the rest of the world are up 49% over the same period last year.
Q3 2003 EARNINGS PER SHARE (EPS)
EPS in the third quarter of 2003 was $0.19, up $0.10 from the prior year's third
quarter. The increase was mainly due to the strong Visudyne sales performance,
higher than expected profit share from the Visudyne alliance and a milestone
payment received from Axcan Pharma.
2003 ANNUAL GUIDANCE
Given the continued strong Visudyne sales growth, the company is updating its
Visudyne sales guidance from $335-$350 million to $350-$355 million, or top-line
growth over 2002 of 22% to 24%. The company has also updated its EPS guidance
for 2003 to $0.62 - $0.67. This update in EPS guidance reflects the new top-line
sales guidance and current view on the profit share from the Visudyne alliance.
"We are pleased with the continued strong growth on both top- and bottom-line
and the strength of the Visudyne alliance with Novartis," said Paul Hastings,
President and Chief Executive Officer. "This result, as well as our results
year-to-date and our guidance for the year, helps us position QLT to build the
pipeline and deliver immediate and long term value to our shareholders."
Q3 RESULTS
REVENUES
The company's revenues reached $38.3 million in the third quarter, growing by
33% from the third quarter of 2002. Revenues from Visudyne comprised $37.2
million of this total, up 40% over the same period in 2002. QLT's share of
Visudyne net profit from the alliance for the third quarter was 32% of Visudyne
sales. The company has revised its forecast of its share of profit from the
alliance from 29-30% to 30-31% of total Visudyne sales for 2003.
RESEARCH AND DEVELOPMENT (R&D)
Expenditures for R&D of $9.7 million were 10% lower in the third quarter
compared to the same period in 2002. The decrease is due mainly to reduced
clinical trial expenditures compared to the same period last year.
SELLING, GENERAL AND ADMINISTRATIVE (SG&A)
For the third quarter of 2003, SG&A expenditures were $3.7 million representing
an increase of 5% over the third quarter of 2002. The increase was due to
changes in foreign currency exchange rates.
CASH AND SHORT-TERM INVESTMENTS
The company's cash and short-term investments rose from $269 million to $461
million during the third quarter of 2003. The increase was due to the
convertible senior notes offering in August, cash from operations, and favorable
foreign currency exchange rate effects. QLT expects to have approximately $480
million in cash and short-term investments by the end of 2003.
CLINICAL UPDATE
Results from the Phase III early retreatment (VER) study with Visudyne showed
that the early retreatment regimen did not result in a significant improvement
in vision outcomes over the standard retreatment regimen every 3 months. This
study involved earlier and more frequent treatments in patients with
predominantly classic lesions to reduce the risk of the initial moderate vision
loss compared to the standard treatment of Visudyne. These data did reconfirm
the vision benefits and safety shown in the original TAP or Treatment in
Age-related macular degeneration with Photodynamic therapy study. The results
will be presented at the upcoming American Academy of Ophthalmology meeting in
November.
ABOUT VISUDYNE
Visudyne therapy was approved in the U.S. in April 2000, and in Europe in July
2000, for the treatment of predominantly classic subfoveal choroidal
neovascularization (CNV) due to age-related macular degeneration (AMD), the
leading cause of severe vision loss in patients over 50. The treatment has now
been approved in more than 70 countries with extended approvals in over 55
countries. QLT's revenue from Visudyne sales consists of 50% of the Visudyne
profits of the Visudyne alliance with the Ophthalmics Business Unit of Novartis
Pharma AG, and reimbursement for manufacturing and other costs.
QLT INC.--FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In accordance with United States generally accepted accounting principles)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
(In thousands of United States dollars, except per share information) 2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
REVENUES
Revenue from Visudyne(R) $37,158 $26,477 $103,767 $72,279
Contract research and development 1,124 2,236 3,495 5,232
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38,282 28,713 107,262 77,511
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COSTS AND EXPENSES
Cost of sales 6,211 4,715 17,681 13,268
Research and development 9,684 10,702 32,646 29,572
Selling, general and administrative 3,653 3,474 10,118 12,453
Depreciation 825 799 2,266 2,300
Restructuring - - (394) -
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20,373 19,690 62,317 57,593
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OPERATING INCOME 17,909 9,023 44,945 19,918
OTHER INCOME AND EXPENSES
Net foreign exchange gains (losses) 406 (985) 3,320 (552)
Interest income 2,443 1,402 6,087 3,337
Interest expense (773) - (773) -
Equity gain (loss) in NSQ - 3 - (276)
Other gains (losses) 1,813 (371) 1,813 (169)
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3,889 49 10,447 2,340
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INCOME BEFORE INCOME TAXES $21,798 $ 9,072 $ 55,392 $22,258
PROVISION FOR INCOME TAXES (8,649) (3,169) (19,545) (7,838)
===============================================================================================================================
NET INCOME $13,149 $ 5,903 $ 35,847 $14,420
===============================================================================================================================
NET INCOME PER COMMON SHARE
Basic $ 0.19 $ 0.09 $ 0.52 $ 0.21
Diluted $ 0.19 $ 0.09 $ 0.52 $ 0.21
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (IN
THOUSANDS)
Basic 68,837 68,257 68,686 68,188
Diluted 69,196 68,406 68,882 68,507
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QLT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In accordance with United States generally accepted accounting principles)
SEPTEMBER 30, December 31,
(In thousands of United States dollars) 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $229,160 $128,138
Short-term investment securities 231,820 79,797
Accounts receivable 34,629 30,186
Inventories 28,882 23,900
Current portion of deferred income tax assets 13,722 17,092
Other 16,108 13,310
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554,321 292,423
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PROPERTY AND EQUIPMENT 40,319 35,281
DEFERRED INCOME TAX ASSETS 1,889 13,966
OTHER LONG-TERM ASSETS 6,073 4,170
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$602,602 $345,841
=========================================================================================================================
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 5,334 $ 9,960
Accrued restructuring charge - 2,631
Other accrued liabilities 10,516 7,027
Deferred revenue 8,129 12,678
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23,979 32,296
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LONG-TERM DEBT 172,500 -
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196,479 32,296
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SHAREHOLDERS' EQUITY
COMMON SHARES 395,196 391,716
ACCUMULATED DEFICIT (17,053) (52,901)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) 27,980 (25,270)
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406,123 313,545
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$602,602 $345,841
=========================================================================================================================
As at September, 2003, there were 68,848,275 issued and outstanding common
shares and 7,449,205 outstanding options to purchase common shares.
QLT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In accordance with United States generally accepted accounting principles)
THREE MONTHS ENDED NINE MONTHS ENDED
(In thousands of United States dollars) SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 13,149 $ 5,903 $ 35,847 $14,420
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 825 799 2,266 2,300
Amortization of deferred financial expenses 122 - 122 -
Unrealized foreign exchange (gain) loss (159) (1,225) 1,939 (327)
Deferred income tax assets 8,649 3,169 19,545 7,838
Restructuring - - (394) -
Equity (gain) loss in NSQ - (3) - 276
Changes in non-cash operating assets and liabilities
Accounts receivable (935) (2,719) 94 878
Inventories (791) 2,423 (1,083) 7,936
Other assets 7,310 1,835 3,093 (5,171)
Accounts payable (2,191) (975) (4,512) (4,678)
Accrued restructuring charge - - (2,005) -
Other accrued liabilities 2,623 1,099 2,607 (2,719)
Deferred revenue (1,800) 369 (6,398) 5,970
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26,802 10,675 51,121 26,723
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CASH USED IN INVESTING ACTIVITIES
Short-term investment securities (137,636) (53,824) (139,328) (589)
Purchase of property and equipment (1,284) (458) (3,495) (1,425)
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(138,920) (54,282) (142,823) (2,014)
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CASH PROVIDED BY FINANCING ACTIVITIES
Long term debt (net) 167,748 - 167,748 -
Issuance of common shares 833 372 3,472 2,929
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168,581 372 171,220 2,929
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EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 836 (5,264) 21,504 (1,418)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 57,299 (48,499) 101,022 26,220
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 171,861 144,382 128,138 69,663
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 229,160 $ 95,883 $ 229,160 $95,883
===============================================================================================================================
QLT Inc. is a global pharmaceutical company specializing in the discovery,
development and commercialization of innovative therapies to treat cancer, eye
diseases and niche areas for which treatments can be marketed by a specialty
sales force. Combining expertise in ophthalmology, oncology and photodynamic
therapy, QLT has commercialized two products to date, including Visudyne
therapy, which is the most successfully launched ophthalmology product ever. For
more information, visit our web site at www.qltinc.com.
QLT Inc. will hold an analyst and investor conference call to discuss third
quarter results on Thursday, October 23rd at 8:30 a.m. EDT (5:30 a.m. PDT). The
call will be broadcast live via the Internet at www.qltinc.com. A replay of the
call will be available via the Internet and also via telephone at 416-695-5800,
access code 1486581.
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QLT CONTACTS:
QLT Inc.:
- --------
Vancouver, Canada
Therese Hayes / Tamara Hicks
Telephone: 604-707-7000 or 1-800-663-5486
Fax: 604-707-7001
Visudyne(R) is a trade mark of Novartis AG
QLT Inc. is listed on The Nasdaq Stock Market under the trading symbol "QLTI"
and on The Toronto Stock Exchange under the trading symbol "QLT."
Certain statements in this press release constitute "forward-looking statements"
of QLT within the meaning of the Private Securities Litigation Reform Act of
1995, which involve known and unknown risks, uncertainties and other factors
that may cause our actual results to be materially different from any future
results, performance or achievements expressed or implied by such statements.
Forward-looking statements include, but are not limited to, all those which use
the word "will," and those statements with respect to anticipated levels of
sales of Visudyne(R), estimates of QLT's 2003 EPS (both GAAP and Operating EPS),
estimates of QLT's share of profit from its alliance with Novartis, estimates of
2003 Visudyne net profits and net income, and statements with respect to the
future growth of the Company. These statements are only predictions and actual
events or results may differ materially. Factors that could cause such actual
events or results expressed or implied by such forward-looking statements to
differ materially from any future results expressed or implied by such
statements include, but are not limited to: the risk that future sales of
Visudyne may be less than expected, our future operating results are uncertain
and likely to fluctuate, currency fluctuations in our primary markets may impact
our financial results, uncertainty of and timing of pricing and reimbursement
may limit the future sales of Visudyne, clinical development programs may not be
successful or regulatory approvals not obtained, the outcome of the pending
patent and securities litigation against us may be unfavorable and have an
adverse impact on our financial results, we are dependent on third-parties to
commercialise Visudyne and other factors described in detail in QLT's Annual
Information Form on Form 10-K, quarterly reports on Form 10-Q and other filings
with the U.S. Securities and Exchange Commission and Canadian securities
regulatory authorities. Forward-looking statements are based on our current
expectations and, except a required by law, QLT undertakes no obligation to
update such information to reflect later events or developments.