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QLT Narrows Loss

Zacks Equity Research

QLT Inc.’s (QLTI) first quarter 2013 loss of 11 cents per share was narrower than the year-ago loss of 21 cents per share. The narrower loss was due to the lower costs incurred by QLT in the first quarter of 2013.

QLT reported no revenues during the first quarter of 2013. We note that QLT’s product portfolio previously included eye-drug Visudyne. In Sep 2012, QLT sold its Visudyne business to Valeant Pharmaceuticals International, Inc. (VRX).
Previously, QLT had an agreement with Novartis (NVS) for the commercialization of Visudyne in ex-US territories. Novartis is obligated to pay a royalty of 20% on ex-US sales of Visudyne till 2014 and thereon 16% till 2019.

Visudyne is used for treating abnormal growth of leaky blood vessels in the eye caused by wet age-related macular degeneration. In 2011, Visudyne generated revenues of approximately $21 million in the US. Moreover, the ex-US royalties recorded by QLT during that timeframe were approximately $14 million.

Research and development (R&D) expenses at QLT came in at $4.1 million in the first quarter of 2013 compared with $6.5 million in the year-ago quarter. Selling, general and administrative (SG&A) expense plummeted 49.3% to $2.1 million in the first quarter of 2013. The decrease was primarily attributable to cost savings from the restructurings announced by QLT in 2012.

Earlier in the year, QLT completed the sale of its punctal plug drug delivery system technology to Mati Therapeutics Inc. Mati was founded by Robert Butchofsky, an ex-president and chief executive officer of QLT .

QLT currently carries a Zacks Rank #3 (Hold). Lannett, Inc. (LCI) appears to be more attractive and carries a Zacks Rank #1 (Strong Buy).

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