QLT Inc. (



Q4 2010 Earnings Call

March 1, 2011 8:30 AM ET


Karen Peterson – Investor Relations Specialist

Bob Butchofsky – President and CEO

Cameron Nelson – Chief Financial Officer


Scott Henry – Roth Capital

Doug Miehm – RBC Capital Markets

Jeffrey Cohen – C.K. Cooper

Cosme Ordonez – GMP Securities



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Hello. This is the Chorus Call Conference Operator. Welcome to the QLT Inc. Fourth Quarter and Year End 2010 Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. (Operator Instructions)

At this time, I would like to turn the conference over to Karen Peterson, Investor Relations Specialist. Please go ahead.

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Karen Peterson

Good morning, everyone. And welcome to QLT’s fourth quarter and year end 2010 earnings conference call. If you have not yet received a copy of our press release, you can find it by visiting our website at www.qltinc.com. Conference call is being webcast live and will be available on our website for the next 30 days.

Presenting today is Bob Butchofsky, our President and CEO; and Cameron Nelson, our Chief Financial Officer. Before I turn the call over to Bob, I’d like to take a few moments to go over the Safe Harbor statement.

I need to remind you that certain statements in this conference call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and constitute forward-looking information within the meaning of Canadian Securities Laws.

Forward-looking statements include but are not limited to, statements relating to our clinical development plans and objectives, timing to commence studies, complete enrollment and receive results, sales and other financial guidance, potential benefits, targets and commercial success of our products and technologies and other statements which contain language such as believe, goal, future, will, project, expects and outlook, and similar expressions.

Forward-looking statements are based on estimates and assumptions made by QLT in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that QLT believes are appropriate in the circumstances.

Forward-looking statements are predictions only which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from a conclusion, forecast or projection in such statements.

Many such risks and uncertainties are taken into account as part of our assumptions underlying these forward-looking statements, including but not limited to, our future operating results are uncertain and likely to fluctuate, currency fluctuations may impact financial results, risks that future sales of Visudyne or Eligard may be less than expected due to market demand, competition, pricing, reimbursement and other factors.

Uncertainties related to timing, enrollment, cost and success of R&D and commercialization of products, and other future unknown liabilities and other factors including those described in the risks factors section of QLT’s annual report on Form 10-K and quarterly reports on Form 10-Q and in other filings within the U.S. and Canadian Securities regulatory authorities.

These factors should be considered carefully and you should not place undue reliance on QLT’s forward-looking statements. QLT has no intention and undertakes no obligation to update such information to reflect later events or developments except as required by law.

This presentation includes a discussion of non-GAAP financial measures as defined by applicable securities laws. The most directly comparable GAAP financial measures and information reconciling these non-GAAP finance measures to QLT’s financial results prepared in accordance with GAAP have been included in the earnings press release issued today and posted on our website.

And, with that, I’ll turn the call over to Bob.

Bob Butchofsky

Thank you, Karen, and good morning, everyone. Thanks for joining us on our 2010 year end earnings call. I want to begin the call by highlighting some of the financial results from last year. First, we generated almost $16 million in adjusted EBITDA, even while we ramped up R&D spending in the second half of the year for both the retinoid and plug programs.

We ended the year with $210 million in cash with no debt. Additionally, we have $130 million of Contingent Consideration on the balance sheet -- the value of the payments due to us from the Eligard royalty stream. Thus we have approximately $340 million in hard asset underlying the value of the company and this doesn’t include any value for Visudyne or for the rest of our pipeline.

We believe our stock has been undervalued in, even though it appreciated almost 50% last year, so in 2010 we repurchased and retired another 2.9 million shares of QLT stock, which represents more than 5% of our outstanding shares.

However, I believe the most significant achievement in the last quarter was the growth we saw in our U.S. Visudyne business. As you know, we became a commercial company in January of last year when we got the U.S. rights to Visudyne from Novartis. By mid-year we had a full compliment of field-based sales and medical affairs staff to support the brand. I was very pleased to see our fourth quarter U.S. Visudyne demand increase from 65 vials per day in the third quarter to 73 vials per day in the fourth quarter, a 13% increase leading to sales of approximately $6 million for the quarter and the first quarter-over-quarter increase in demand for Visudyne in the U.S. for over two years.

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