Revenue increases to $5.5 million; Company records earnings per share of $0.13

Toronto Stock Exchange Symbol: DND

MISSISSAUGA, ON, July 31, 2013 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: DND) ("Cipher") today announced its financial and operational results for the three and six months ended June 30, 2013.

Q2 2013 Highlights

• Net revenue increased to $5.5 million, from $1.6 million in Q2 2012.
• EBITDA of $3.3 million versus $0.4 million in Q2 2012.
• Net income was $3.1 million, or $0.13 per basic share, compared with net income of $0.02 million, or $0.01 per basic share, in Q2 2012.
• Cash balance increased to $17.8 million at quarter end, compared with $15.8 million at December 31, 2012 and $16.5 million at March 31, 2013.
• Out-licensed Latin American distribution rights for CIP-TRAMADOL ER to Tecnofarma International Ltd.
• Subsequent to quarter end, announced the Canadian launch of Epuris^™ (isotretinoin) capsules.

"The continued strong growth of Absorica^™ drove significant gains in our revenue, earnings and cash for the second quarter," said Larry Andrews, President and CEO of Cipher. "The product was up to 13.1% share of the U.S. isotretinoin market by June, from 7.5% at the end of Q1¹, and the feedback from our marketing partner Ranbaxy has been very positive. We launched the product in Canada in late June with our own sales force and are pursuing out-licensing agreements in other markets. We are also looking at opportunities to expand our product portfolio."

Financial Review and Outlook

Net revenue for Q2 2013 was $5.5 million, compared with $1.6 million in Q2 2012.  The year-over-year increase was mainly driven by the success of Absorica^™, which contributed $4.2 million of net revenue in Q2 2013 versus $0.3 million in Q2 2012.  Net revenue from Lipofen^® was $0.8 million in Q2 2013, compared with $0.9 million in Q2 2012. Net revenue from the Company's extended release tramadol product (ConZip^®/Durela^®) increased to $0.5 million in Q2 2013, compared with $0.4 million in Q2 2012.

Research and Development expense in Q2 2013 was $0.3 million, the same level as incurred in Q2 2012. Selling, General and Administrative ("SG&A") expenses for Q2 2013 increased to $1.9 million, compared to $0.9 million in Q2 2012. The year-over-year increase in SG&A reflects the planned build out of the Company's commercial infrastructure in Canada to support the launch of Epuris^™ and future products.  The Company incurred approximately $0.5 million of one-time costs to support the June 2013 launch of Epuris^™. 

Net income in Q2 2013 grew to $3.1 million, or $0.13 per basic share ($0.12 per diluted share), compared with net income of $0.2 million, or $0.01 per basic and diluted share, in Q2 2012.

The Company's cash position increased at quarter end. As at June 30, 2013, Cipher had cash and cash equivalents of $17.8 million, compared with $15.8 million at December 31, 2012.

For the second half of fiscal 2013, Cipher expects continued aggregate revenue growth from its currently marketed products and the recent introduction of Epuris^™ in Canada. In particular, the Company expects the full-year contribution of Absorica^™ to be a primary revenue driver.  In 2013, Cipher will be investing in commercial sales and marketing capabilities in Canada. The Company expects an increase in operating expenses of approximately $1.0 million to $1.5 million during the balance of 2013, compared to the same period in 2012, related to the launch of Epuris^™ in Canada. Cipher expects its revenue growth to continue to offset the additional spending rencorporate proven drug delivery technologies and advance them through the clinical development and regulatory approval stages, after which the products are out-licensed to international partners. Because Cipher's products are based on proven technology platforms applied to currently marketed drugs, they are expected to have lower approval risk, shorter development timelines and significantly lower development costs. The Company's lead compound is being marketed in the United States by Kowa Pharmaceuticals America under the label Lipofen®. Cipher's second product, an extended-release version of the pain reliever tramadol, has received FDA final approval and will be marketed in the United States by Vertical Pharmaceuticals Inc. The Company's third product, a novel formulation of the acne treatment isotretinoin, recently completed its final Phase III safety study.

Cipher is listed on the Toronto Stock Exchange under the symbol 'DND' and has approximately 24 million shares outstanding.  For more information, please visit www.cipherpharma.com.

Forward-Looking Statements

Statements made in this news release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", "hope" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements.  Factors that could cause results to vary include those identified in the Company's Annual Information Form and other filings with Canadian securities regulatory authorities, such as the applicability of patents and proprietary technology; possible patent litigation; regulatory approval of products in the Company's pipeline; changes in government regulation or regulatory approval processes; government and third-party payer reimbursement; dependence on strategic partnerships for product candidates and technologies, marketing and R&D services; meeting projected drug development timelines and goals; intensifying competition; rapid technological change in the pharmaceutical industry; anticipated future losses; the ability to access capital to fund R&D; and the ability to attract and retain key personnel. All forward-looking statements presented herein should be considered in conjunction with such filings. Except as required by Canadian securities laws, the Company does not undertake to update any forward-looking statements; such statements speak only as of the date made.