QLT (QLTI), which will merge with Auxilium Pharmaceuticals (AUXL) by Dec 31, 2014, reported a second-quarter 2014 loss of 17 cents. The quarterly loss was wider than the Zacks Consensus Estimate of a loss of 12 cents and the year-ago loss of 11 cents per share.
QLT did not report any revenues during the second quarter of 2014, as was the case a year ago. We note that QLT’s product portfolio had earlier 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-U.S. territories. Visudyne is used for treating abnormal growth of leaky blood vessels in the eye caused by wet age-related macular degeneration.
Research and development (R&D) expenses at QLT came in at $4.1 million in the second quarter of 2014 compared with $4.4 million in the year-ago quarter. Cost savings on workforce reduction at QLT in 2012 primarily led to the lower R&D. Moreover, lower costs incurred pertaining to the phase Ib retreatment study on QLT091001 contributed to the decline. Selling, general and administrative expenses more than doubled to $4.1 million in the reported quarter. The increase was primarily due to fees incurred for the exploration of certain strategic alternatives. Resultantly, the company decided to merge with Auxilium.
We believe investor focus will remain on the above mentioned impending merger (read more: Auxilium and QLT to Merge on Tax Saving Attractions ).
QLT, which focuses on developing and commercializing innovative ocular products for those with high unmet medical needs, carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Endo International (ENDP) with a Zacks Rank #1 (Strong Buy).
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