- Net product revenues were $7.4 million in the second quarter of 2012, compared to $4.9 million in the second quarter of 2011, due to higher sales to Merck Serono S.A. (“Merck Serono”) and Watson Pharmaceuticals, Inc. (“Watson”).
- Gross profit on net product revenues remained the same at 39% compared with the second quarter of 2011.
- Operating income was $1.7 million in the second quarter of 2012 as operating expenses were down 31% from prior year levels.
- Net income was $1.9 million, or $0.02 per basic and diluted share.
- Cash, cash equivalents and short-term investments were $23.0 million at June 30, 2012, up slightly from the immediately preceding quarter.
Net product revenues were $7.4 million in the second quarter of 2012 compared to $4.9 million in the second quarter of 2011. The $2.4 million increase was primarily due to higher sales to Merck Serono and Watson, offset slightly by a $0.1 million decline in STRIANT revenues due to the sale of STRIANT to Actient Pharmaceuticals, LLC (“Actient”) in April 2011.Total royalty revenues were $0.8 million in the second quarter of 2012, compared to $0.7 million in the second quarter of 2011, primarily reflecting royalty revenues from Watson on CRINONE products. There were no other revenues in the second quarter of 2012. For the second quarter of 2011, other revenues were $13.6 million, comprised of the $5.0 million milestone payment from Watson for the acceptance of the preterm birth NDA for filing by the FDA and the amortization of $8.6 million in deferred revenue recognized from the sale of assets to Watson. Amortization concluded in the second quarter of 2011. Gross profit margin on total net revenues was 46% for the second quarter of 2012, compared to 84% in the second quarter of 2011. Gross profit on net product revenues for the second quarter of 2012 remained the same at 39% compared with the same period in 2011. The higher profit margin on net product revenues in the 2012 quarter resulted primarily from the shift in sales mix to Merck Serono in favor of higher-margin country markets. Total net operating expenses were $2.1 million in the second quarter of 2012. This compares to $0.5 million in the prior year period, in which a one-time gain of $2.5 million on the sale of STRIANT to Actient was recognized.
- There were no selling and distribution expenses in the second quarter of 2012 as compared to $30 thousand in the second quarter of 2011, reflecting the sale of STRIANT to Actient.
- General and administrative costs were $1.9 million in the second quarter of 2012 compared to $2.5 million in the 2011 quarter. The decrease was due to lower professional fees for accounting and legal, and lower personnel costs following the 2012 workforce reduction.
- Research and development costs were $0.2 million in the second quarter of 2012, compared to $0.5 million in the 2011 quarter, primarily reflecting lower personnel costs following the 2012 workforce reduction and lower project expenses.
Other income and expense aggregated to net income of $0.3 million for the second quarter of 2012, compared to $2.6 million in the second quarter of 2011, primarily reflecting the recognition of the $0.2 million change in the fair value of the warrants issued in conjunction with the October 2009 stock issuance resulting from the decrease in Columbia's stock price from March 31, 2012 to June 30, 2012.As a result, the Company reported net income of $1.9 million, or $0.02 per basic and diluted share, compared to net income of $18.3 million, or $0.21 per basic and $0.16 per diluted share, for the second quarter of 2011. Cash and Equivalents At June 30, 2012, Columbia had cash, cash equivalents and short-term investments of $23.0 million, compared to cash, cash equivalents and short-term investments of $22.7 million at March 31, 2012, and $25.1 million at December 31, 2011. The Company believes its cash, cash equivalents and short-term investments will sustain its operations for the foreseeable future. Financial Outlook Columbia has streamlined the organization to operate as cash flow neutral-to-positive, while maintaining the potential from milestone payments and royalties if Watson is successful in gaining FDA approval and commercializing a progesterone product for the preterm birth indication. The Company is currently evaluating potential strategic transactions to add value for its stockholders. Any significant expenses resulting from pursuing a possible strategic transaction could produce a cash flow negative outcome in the quarters incurred. Conference Call As previously announced, Columbia Laboratories will hold a conference call to discuss financial results for the second quarter ended June 30, 2012, as follows:
|Date:||Wednesday, August 8, 2012|
|Time:||11:00 am EDT|
|Dial-in numbers:||(877) 303-9483 (U.S. & Canada) or (760) 666-3584|
|Live webcast:||www.columbialabs.com, under 'Investor'|
CRINONE ® is a registered trademark of Watson Pharmaceuticals, Inc.STRIANT ® is a registered trademark of Actient Pharmaceuticals, LLC. Financial tables follow
|COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS|
|June 30, 2012 (unaudited)||December 31,2011|
|Cash and cash equivalents||$||7,716,818||$||10,114,163|
|Accounts receivable, net||4,483,910||4,695,410|
|Prepaid expenses and other current assets||990,016||667,927|
|Total current assets||32,871,363||34,137,229|
|Property and equipment, net||2,205,822||1,481,071|
|LIABILITIES AND SHAREHOLDER'S EQUITY|
|Total current liabilities||4,678,955||6,636,517|
|Common stock warrant liability||1,703,779||8,168,846|
|COMMITMENTS AND CONTINGENCIES|
|Contingently redeemable series C preferred stock, 600 shares issued and outstanding(liquidation preference of $600,000)||600,000||600,000|
|Preferred stock, $.01 par value; 1,000,000 shares authorized,|
|Series B convertible preferred stock,130 shares issued and outstanding (liquidationpreference of $13,000)||1||1|
|Series E convertible preferred stock, 22,740 shares issued andoutstanding (liquidation preference of $2,274,000)||227||227|
|Common Stock $.01 par value; 150,000,000 shares authorized; 87,543,781 and87,367,313 shares issued in 2012 and 2011, respectively||875,437||873,673|
|Capital in excess of par value||278,531,355||278,060,138|
|Less cost of 36,448 treasury shares||(125,381||)||(125,381||)|
|Accumulated other comprehensive income||197,348||104,902|
|TOTAL SHAREHOLDERS' EQUITY||28,093,437||20,630,807|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$||35,116,060||$||36,082,586|
|COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)|
|Six Months EndedJune 30,||Three Months EndedJune 30,|
|Net product revenues (including amounts from related party:|
|2012 - $2,163,183; 2011 - $938,340)||$||10,480,461||$||8,407,029||$||7,361,829||$||4,942,085|
|Royalties (including amounts from related party:|
|2012 - $1,327,558; 2011 - $1,142,818||1,514,588||1,287,532||834,211||686,719|
|Other revenues (including amounts from related party:|
|2012 - $0; 2011 - $21,984,800)||69,028||22,043,897||34,496||13,615,315|
|Total net revenues||12,064,077||31,738,458||8,230,536||19,244,119|
|COST OF PRODUCT REVENUES|
|Cost of product revenues (including amounts from related party:|
|2012 - $1,966,333; 2011 - $817,488)||6,468,832||5,036,926||4,465,846||3,002,088|
|Selling and distribution||—||87,669||—||29,827|
|General and administrative||4,474,681||4,856,804||1,923,356||2,500,326|
|Research and development (net of reimbursement from related|
|party: 2012 - $435,199; 2011 - $2,215,176)||712,750||1,853,550||159,072||507,949|
|Net gain on U.S. sale of STRIANT||—||(2,533,127||)||—||(2,533,127||)|
|Total operating expenses||5,187,431||4,264,896||2,082,428||504,975|
|Income from operations||407,814||22,436,636||1,682,262||15,737,056|
|OTHER INCOME (EXPENSE):|
|Change in fair value of redeemable warrants||—||(2,721,205||)||—||—|
|Change in fair value of stock warrants||6,465,067||(2,260,183||)||205,700||2,797,928|
|Total other income (expense)||6,492,065||(5,304,824||)||260,548||2,578,715|
|Income before taxes||6,899,879||17,131,812||1,942,810||18,315,771|
|Provision for income taxes||(2,676||)||(4,504||)||—||(1,576||)|
|NET INCOME PER COMMON SHARE:|
|WEIGHTED AVERAGE NUMBER OF COMMON SHARESOUTSTANDING:|