NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES
Pediapharm Inc. (the "Corporation") (TSX VENTURE:PDP) is pleased to announce the
filing of its annual audited financial results ended March 31, 2014. As a result
of the Corporation changing its financial year-end from December 31 to March 31,
these are annual audited financial statements for a fifteen-month period. All
dollar amounts are expressed in Canadian currency and results are reported in
accordance with IFRS accounting principles.
Highlights for the period ended March 31, 2014:
-- Total revenues for the fifteen-month period ended March 31, 2014
increased by 88% compared to the twelve-month period ended December 31,
2012. Using a twelve-month run rate for the period ended March 31, 2014,
the increase in revenue is 50%;
-- NYDA(R), a breakthrough treatment for head lice and its eggs, was a
major contributor to the revenue growth and is on track to reach over
$2,000,000 in revenue in 2014;
-- The Company has over $7,000,000 of cash and cash equivalents as of March
31, 2014;
-- On December 27th 2013, the common shares of Pediapharm began to trade on
the TSX Venture Exchange under the ticker symbol PDP.V following an
amalgamation transaction with Chelsea Acquisition Corporation.
Concurrently, the Company successfully completed a round of financing
with gross proceeds of approximately $7,000,000;
-- On February 21, 2014, the Company completed a "bought deal" private
placement of 5,555,556 common shares of the Company at a price of $0.36
per common shares for gross proceeds of $2,000,000;
-- As a result of its on-going business development efforts, Pediapharm has
a long list of potential product acquisitions and licensing agreements
under due diligence review.
Recent Highlights:
On April 4, 2014, the Company announced the termination of its promotional sales
agreements with Sanofi Canada ("Sanofi") for Suprax(R) and Allerject(TM),
effective June 30, 2014. While this was disappointing news for the Company,
Pediapharm knows this was not due to its own performance, as revenues for these
products had experienced significant growth. In fact, the Company had tremendous
success in more than doubling the revenues from Suprax(R) within 4 years.
Since then, the Company has entered into an exclusive supply and distribution
agreement with Merz Pharma Canada, Ltd. regarding the Canadian rights to
CUVPOSA(TM) (glycopyrrolate) oral solution intended for pediatric chronic severe
drooling (sialorrhea) associated with neurologic conditions such as cerebral
palsy. Pediapharm believes that CUVPOSA(TM) will be the first product to be
officially approved in Canada to treat that disease and as such, the Company is
hoping to be granted a Special Access Program and a priority review from Health
Canada. There are approximately 6,000 patients that could potentially be treated
by CUVPOSA(TM) and the company is confident to capture 20% of those.
Furthermore, the Company and Hoffmann-La Roche Limited ("Roche") have entered
into an asset purchase agreement regarding the Canadian rights to Roche's
naproxen suspension. Roche will retain the Naprosyn(TM) trademark and retains
all product rights to the other oral dosage forms under this brand. This product
in its suspension form is only available under prescription (Rx) and is
indicated for the treatment of osteoarthritis, rheumatoid arthritis, ankylosing
spondylitis, and juvenile rheumatoid arthritis. Due to the significant unmet
medical need, it will be reintroduced to the market as Pediapharm naproxen
suspension. On July 24, 2014, Pediapharm announced that a Special Access
Program' (SAP) from Health Canada has been initiated for Naproxen suspension.
This program allows physicians to prescribe the product to their patients when
no commercially alternatives are available. This program has been initiated at
the request of physicians mainly treating patients suffering of Juvenile
Rheumatoid Arthritis (JRA). The product will be made available through
Pediapharm and the SAP will be in place until the availability of Pediapharm
Naproxen Suspension.
"We are seeing excellent sales momentum from our current product portfolio, such
as NYDA(R) which is growing at a pace to reach $2,000,000 by year-end." stated
Sylvain Chretien, President and Chief Executive Officer of Pediapharm. He added:
"We have a strong cash position with over $7,000,000 as at March 31, 2014 and we
are very active in assessing exclusive licence agreements and potential products
acquisitions, as shown by the recent additions of CUVPOSA(TM) and Pediapharm
naproxen suspension to our portfolio. We expect to add more license agreements
and strive to acquire another Canadian product before the end of 2014."
concluded the CEO.
Despite loss of agreement with Sanofi, the Company strives to achieve revenue
growth in 2014. The Company's focus remains to execute its commercial plan with
existing products, such as NYDA(R), a revolutionary treatment indicated for
eradication of head lice and its eggs. NYDA(R) is on track to reach over
$2,000,000 in revenue in 2014 and has the potential to achieve peak revenues of
$6,000,000 to $8,000,000 by 2017.
The future looks promising with four products presently under review with Health
Canada or in the process of being filed for approval from Health Canada. The
following represents a list of these products: Easyhaler(R)-budesonide,
Pediapharm Naproxen suspension, Cesinex(R) and CUVPOSA(TM). The 2 most advanced
files are Easyhaler(R)-budesonide and Pediapharm Naproxen suspension with an
estimated product launch by March 2015. Easyhaler(R)-budesoninde will be
competing in a market of $195 million and Pediapharm Naproxen suspension in a
market of $76 million, including $8 million of the suspension form.
The Company's core strategy regarding business development remains to acquire
exclusive licensing agreements (commonly known as "in-licensing"), as well as
Canadian products, such as the aforementioned recent acquisition from
Hoffmann-La Roche Limited. This strategy will put Pediapharm in a strong
position to further sustain its future growth.
Review of operating results for the period ended March 31, 2014
For the three months ended March 31, 2014, revenues reached $677,969 compared
with revenues of $821,413 in the three months ended March 31, 2013. While there
was a very strong revenue growth from NYDA(R), it was somewhat offset by a
reduction of revenue from sales of Suprax(R), as a result of the termination of
the Company's promotional sales agreements with Sanofi Canada for Suprax(R) and
Allerject(TM). The termination, effective June 30, 2014, had a negative impact
of approximately $200,000 in the three months ended March 31, 2014, since the
Company could not recognize revenue on the annual performance bonuses it was
tracking towards, which it is no longer entitled.
For the fifteen months ended March 31, 2014, revenues reached $4,681,776
compared with revenues of $2,490,503 in the twelve months ended December 31,
2012, representing a 88% growth. Using a twelve-month run rate for the period
ended March 31, 2014, the increase in revenue is 50%. The main reasons for the
overall increase are important revenue growth from NYDA(R) throughout the
fifteen-month period, as well as the solid performance of Allerject(TM) and
Suprax(R) during the twelve-month period ended December 31, 2013.
The operating loss for the three months ended March 31, 2014 was $1,094,665
compared to the $210,220 in the three months ended March 31, 2013. The net loss
for the three months ended March 31, 2014 was $1,566,442 compared to the
$339,314 in the three months ended March 31, 2013. The expenses related to the
amalgamation with Chelsea Acquisition Corporation as well as the expenses
associated with the fact Pediapharm became listed on the TSX Venture Exchange
were the main reasons for the difference in net loss.
The operating loss for the fifteen months ended March 31, 2014 was $1,534,829
compared to the $2,079,969 in the twelve months ended December 31, 2012. The
improvement was mainly due to the increase in revenue of 88%. The net loss for
the fifteen months ended March 31, 2014 was $4,079,633 compared to the
$2,246,068 in the twelve months ended December 31, 2012. The expenses related to
the amalgamation with Chelsea Acquisition Corporation were the main reasons for
the difference in net loss.
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March 31, March 31, March 31, December 31,
2014 2013 2014 2012
(3 months) (3 months) (15 months) (12 months)
----------------------------------------------------------------------------
Revenue 677,969 821,413 4,681,776 2,490,503
----------------------------------------------------------------------------
Selling and
administrative expenses 1,772,634 1,031,633 6,216,605 4,570,472
----------------------------------------------------------------------------
Operating loss (1,094,665) (210,220) (1,534,829) (2,079,969)
----------------------------------------------------------------------------
Other expenses 471,777 129,093 2,544,804 166,099
----------------------------------------------------------------------------
Net loss (1,566,442) (339,314) (4,079,633) (2,246,068)
----------------------------------------------------------------------------
Cash flow from (used in)
operating activities (426,833) (264,997) (2,010,333) (1,932,622)
----------------------------------------------------------------------------
Cash flow from (used in)
investing activities 154,977 (117,588) 93,188 (78,372)
----------------------------------------------------------------------------
Cash flow from (used in)
financing activities 1,252,270 367,750 8,409,818 1,804,644
----------------------------------------------------------------------------
About Pediapharm Inc.
Pediapharm is the only Canadian specialty pharmaceutical company dedicated to
serving the needs of the pediatric community. Its mission is to bring to the
Canadian market the latest innovative pediatric products with the objective to
improve the health and the well-being of children in Canada. Since its debut in
2008, Pediapharm has entered into numerous commercial agreements with partners
from Canada and other countries around the world. The company's innovative
product portfolio includes NYDA(R); a breakthrough treatment for head lice;
EpiCeram(R) a non-steroid emulsion for eczema; KoolEffect(TM) which reduces the
symptoms of fever; and VapoLyptus(TM); a soothing vapour patch of Eucalyptus and
Camphor.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements and other statements that
are not historical. Such forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions that could cause actual results to
vary materially from target results and the results or events predicted in these
forward-looking statements. As a result, investors are cautioned not to place
undue reliance on these forward-looking statements.
The forward-looking statements contained in this news release are made as of the
date of this release. Except as required by applicable law, the Corporation
disclaims any intention and assumes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Forward-looking information reflects the current
expectations or belief of the Corporation based on information currently
available and such information is subject to a number of assumptions, risks and
uncertainties described in details at pp. 35 to 41 of the Management Information
Circular of Chelsea Acquisition Corporation dated November 12, 2013 available on
SEDAR at www.sedar.com and other risks associated with being a specialty
pharmaceutical company.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Sylvain Chretien
President and Chief Executive Officer
Pediapharm Inc.
514-762-2626 ext. 201
sylvain.chretien@pedia-pharm.com
Roland Boivin
Chief Financial Officer
Pediapharm Inc.
514-762-2626 ext. 202
roland.boivin@pedia-pharm.com
Relations Publiques Paradox Public Relations Inc.
Carl Desjardins
514-341-0408
carldesjardins@paradox-pr.ca
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