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Cardiome Posts 4Q Profit

Zacks Equity Research

Cardiome Pharma Corp. (CRME) reported fourth quarter 2012 earnings of 13 cents per share as compared with the Zacks Consensus Estimate of a loss of 6 cents and the year-ago loss of 10 cents per share. In the reported quarter, net income included a $11.2 million gain on the settlement of debt owed to Merck & Co. Inc. (MRK).

Fourth quarter revenues were $0.1 million, compared with $0.2 million in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $1 million.

Full year 2012 net loss per share was 30 cents, narrower than the Zacks Consensus Estimate of a loss of 42 cents and the year-ago loss of 46 cents. Revenues in 2012 were $0.8 million, down from $1.5 million in 2011 and well below the Zacks Consensus Estimate of $2 million.

In early 2013, Cardiome paid back $13 million to Merck under their settlement agreement. Earlier, in Apr 2009, Cardiome and Merck had signed a collaboration and license agreement for vernakalant. In late 2012, the companies had announced that their agreement will come to an end.

In 2012, research and development expenses fell 60.5% year over year to $6 million. The decrease was driven by reduced costs for vernakalant (:IV) as a result of the termination of the ACT 5 clinical trial and restructuring initiatives which eliminated Cardiome’s internal research activities.

Selling, general and administrative expenses fell 16.5% to $9.6 million in 2012. Workforce reductions in 2012 caused a decline in wages and benefits.

Both Cardiome and Merck carry a Zacks Rank #3 (Hold). Currently, companies like Lannett Company, Inc. (LCI) and QLT Inc. (QLTI) look more attractive with a Zacks Rank #1 (Strong Buy).

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