Medicure Reports Financial Results for Quarter and Year Ended December 31, 2017

Tuesday, May 1, 2018

WINNIPEG, May 1, 2018 /CNW/ - Medicure Inc. ("Medicure" or the "Company") (TSXV:MPH, OTC:MCUJF), a cardiovascular pharmaceutical company, today reported its results from operations for the quarter and year ended December 31, 2017. 

Year Ended December 31, 2017 Highlights:

  • Recorded net revenue from the sale of AGGRASTAT® (tirofiban hydrochloride) of $27.1 million during the year ended December 31, 2017 compared to $29.3 million for the year ended December 31, 2016;
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)1 for the year ended December 31, 2017 was $4.6 million compared to adjusted EBITDA of $8.2 million for the year ended December 31, 2016; and
  • Net income for the year ended December 31, 2017 was $43.4 million, which includes the gain on the sale of the Apicore business which occurred in October 2017, compared to net income of $27.0 million for the year ended December 31, 2016.

Financial Results

Net revenues from AGGRASTAT® for the year ended December 31, 2017 were $27.1 million compared to $29.3 million for the year ended December 31, 2016. 

Net revenues for the three months ended December 31, 2017 were $5.0 million compared to $7.3 million for the three months ended December 31, 2016.

The Company recorded a restatement to its 2016 revenues, adjusted EBITDA and net income reducing those amounts by $674,833 and increasing accounts payable and accrued liabilities by the corresponding amount pertaining to an additional accrual for product discounts required at December 31, 2016.

The Company continues to experience an increase in patient market share held by the product and an increase in the number of new hospital customers using AGGRASTAT® leading to the highest hospital demand for AGGRASTAT® in the Company's history. Although, there was an increase in use of AGGRASTAT®, the lower net income was largely due to a stronger Canadian dollar compared to its US counterpart and increased competitive pricing of generic Integrilin. 

Medicure continues to focus on expanding the customer base for AGGRASTAT® and diversification of revenues with the acquisition of additional cardiovascular drugs for the US market, such as the recently launched ZYPITAMAG™ (pitavastatin).

Adjusted EBITDA for the year ended December 31, 2017 was $4.6 million compared to $8.2 million for the year ended December 31, 2016. The decrease in adjusted EBITDA for the year is the result of the lower revenues which were due primarily to lower discounted prices for AGGRASTAT® and a higher Canadian dollar. Adjusted EBITDA for the three months ended December 31, 2017 was negative $0.6 million compared to $0.8 million for the three months ended December 31, 2016.

Net income for the year ended December 31, 2017 was $43.4 million or $2.78 per share which includes income of $11.5 million or $0.74 per share from continuing operations and income from discontinued operations of $31.9 million or $2.04 per share, which includes the operations of Apicore and the gain on the sale of the Apicore business. This compares to net income of $27.0 million or $1.80 per share for the year ended December 31, 2016.

Net income for the three months ended December 31, 2017 was $51.5 million or $3.27 per share primarily relating to the gain on the sale of the Apicore business compared to net income of $23.8 million or $1.53 per share for the three months ended December 31, 2016. 

At December 31, 2017, the Company had unrestricted cash totaling $5.3 million compared to $12.3 million as of December 31, 2016. The decrease in cash is due to higher interest payments made during the year relating to the debt obtained in November 2016 and the acquisition of additional common shares of Apicore during the period, as well as the repayment of the Company's long-term debt from the proceeds of the sale of the Apicore business.  Cash from operating activities of approximately $21.9 million for the year ended December 31, 2017 resulted from increased accounts payable and accrued liabilities at December 31, 2017, which were settled subsequent to year end.

All amounts referenced herein are in Canadian dollars unless otherwise noted.

Notes

(1) The Company defines EBITDA as "earnings before interest, taxes, depreciation, amortization and other income or expense" and Adjusted EBITDA as "EBITDA adjusted for non-cash and one-time items".  The terms "EBITDA" and "Adjusted EBITDA", as it relates to the quarters and years ended December 31, 2017 and 2016 results prepared using International Financial Reporting Standards ("IFRS"), do not have any standardized meaning according to IFRS. It is therefore unlikely to be comparable to similar measures presented by other companies.

Conference Call Info:

Topic:  Medicure's Fiscal Year End 2017 Results

Call date:  Wednesday, May 2, 2018

Time:  7:00 AM Central Time (8:00 AM Eastern Time)

Canada toll-free:  1 (888) 465-5079   Canada toll: 1 (416) 216-4169

United States toll-free:  1 (888) 545-0687

Passcode:  6477570#

Webcast:    This conference call will be webcast live over the internet and can be accessed from the Medicure investor relations page at the following link: http://www.medicure.com/investors.html  

You may request international country-specific access information by e-mailing the Company in advance. Management will accept and answer questions related to the financial results and operations during the question-and-answer period at the end of the conference call. A recording of the call will be available following the event at the Company's website.

About Medicure

Medicure is a pharmaceutical company focused on the development and commercialization of therapeutics for the U.S. cardiovascular market. The primary focus of the Company is the marketing and distribution of AGGRASTAT® (tirofiban hydrochloride) injection and ZYPITAMAG™ (pitavastatin) tablets in the United States, where they are sold through the Company's U.S. subsidiary, Medicure Pharma, Inc. For more information on Medicure please visit www.medicure.com.

To be added to Medicure's e-mail list, please visit: 
http://medicure.mediaroom.com/alerts

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Information: Statements contained in this press release that are not statements of historical fact, including, without limitation, statements containing the words "believes", "may", "plans", "will", "estimates", "continues", "anticipates", "intends", "expects" and similar expressions, may constitute "forward-looking information" within the meaning of applicable Canadian and U.S. federal securities laws (such forward-looking information and forward-looking statements are hereinafter collectively referred to as "forward-looking statements"). Forward-looking statements, include the target launch date for new products, estimates, analysis and opinions of management of the Company made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors which the Company believes to be relevant and reasonable in the circumstances. Inherent in forward-looking statements are known and unknown risks, uncertainties and other factors beyond the Company's ability to predict or control that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements, and as such, readers are cautioned not to place undue reliance on forward-looking statements. Such risk factors include, among others, the Company's future product revenues, stage of development, additional capital requirements, risks associated with the completion and timing of clinical trials and obtaining regulatory approval to market the Company's products, the ability to protect its intellectual property, dependence upon collaborative partners, changes in government regulation or regulatory approval processes, and rapid technological change in the industry. Such statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about: general business and economic conditions; the impact of changes in Canadian-US dollar and other foreign exchange rates on the Company's revenues, costs and results; the timing of the receipt of regulatory and governmental approvals for the Company's research and development projects; the availability of financing for the Company's commercial operations and/or research and development projects, or the availability of financing on reasonable terms; results of current and future clinical trials; the uncertainties associated with the acceptance and demand for new products and market competition. The foregoing list of important factors and assumptions is not exhaustive. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of factors, other than as may be required by applicable legislation. Additional discussion regarding the risks and uncertainties relating to the Company and its business can be found in the Company's other filings with the applicable Canadian securities regulatory authorities or the US Securities and Exchange Commission, and in the "Risk Factors" section of its Form 20F for the year ended December 31, 2016.

AGGRASTAT® (tirofiban hydrochloride) is a registered trademark of Medicure International Inc.

Consolidated Statements of Financial Position

(expressed in Canadian dollars)

As at December 31


2017

2016 - Restated





Assets




Current assets:





Cash and cash equivalents


$

5,260,480

$

12,266,177


Cash held in escrow


-

12,809,072


Accounts receivable


8,588,255

17,200,778


Consideration receivable


82,678,366

-


Inventories


3,075,006

12,176,644


Prepaid expenses


903,914

759,077


Assets held for sale


14,052,861

-


Total current assets


114,558,882

55,211,748

Non‑current assets:





Property, plant and equipment


221,622

10,300,639


Goodwill


-

47,485,572


Intangible assets


1,756,300

100,864,817


Other assets


-

161,891


Holdback receivable


12,068,773

-


Deferred tax assets


326,108

701,000


Total non‑current assets


14,372,803

159,513,919

Total assets


$

128,931,685

$

214,725,667

Liabilities and Equity




Current liabilities:





Short-term borrowings


$

-

$

1,383,864


Accounts payable and accrued liabilities


10,371,103

17,917,199


Accrued transaction costs


22,360,730

-


Current income taxes payable


2,428,560

504,586


Current portion of royalty obligation


1,537,202

2,019,243


Deferred revenue


-

1,161,608


Current portion of finance lease obligations


-

89,241


Current portion of long‑term debt


-

2,883,752


Derivative option on Apicore Class C shares


-

32,901,006


Liability to repurchase Apicore Class E shares


-

2,700,101


Liabilities held for sale


6,976,313

-


Total current liabilities


43,673,908

61,560,600

Non‑current liabilities





Royalty obligation


2,911,810

3,666,479


License fee payable


501,800

-


Long‑term debt


-

68,180,424


Finance lease obligations


-

242,449


Due to vendor


-

2,759,507


Fair value of Apicore Series A-1 preferred shares


-

1,755,530


Other long‑term liabilities


1,135,007

133,999


Deferred tax liability


-

38,142,775


Total non‑current liabilities


4,548,617

114,881,163

Total liabilities


48,222,525

176,441,763

Equity:





Share capital


125,733,727

124,700,345


Warrants


1,948,805

2,020,152


Contributed surplus


6,897,266

6,756,201


Accumulated other comprehensive income


673,264

681,992


Deficit


(54,543,902)

(97,964,786)

Total equity attributable to shareholders of the Company

80,709,160

36,193,904


Non-controlling interest


-

2,090,000

Total equity


80,709,160

38,283,904

Total liabilities and equity


$

128,931,685

$

214,725,667

 

Consolidated Statements of Net Income and Comprehensive Income
(expressed in Canadian dollars)

For the year ended December 31


2017

2016 -
Restated

2015

Revenue, net






AGGRASTAT® 


$

27,132,832

$

29,304,800

$

22,083,128

Cost of goods sold


3,464,686

3,721,191

2,259,867

Gross profit


23,668,146

25,583,609

19,823,261






Expenses






Selling, general and administrative


14,867,635

15,417,604

10,237,116


Research and development


5,148,233

3,630,079

4,865,255



20,015,868

19,047,683

15,102,371

Income before the undernoted


3,652,278

6,535,926

4,720,890






Other (income) expense:






Revaluation of holdback receivable


(82,489)

-

-


Revaluation of long‑term derivative


-

-

(33,080)


Impairment loss (reversal of impairment loss)


635,721

-

(788,305)


Loss on settlement of debt


-

-

60,595



553,232

-

(760,790)






Finance costs (income):






Finance expense, net


837,461

2,478,914

4,123,452


Foreign exchange (gain) loss, net


(175,459)

262,469

68,799



662,002

2,741,383

4,192,251

Net income before income taxes


$

2,437,044

$

3,794,543

$

1,289,429

Income taxes recovery (expense)






Current


9,392,836

(501,315)

-


Deferred


(333,187)

331,095

379,000

Net income before discontinued operations


$

11,496,693

$

3,624,323

$

1,668,429

Net income from discontinued operations, net of tax


31,924,191

23,358,318

-

Net income


$

43,420,884

$

26,982,641

$

1,668,429

Translation adjustment, attributable to:






Continuing operations


(30,295)

(400,829)

806,059


Discontinued operations


21,567

(21,567)

-

Comprehensive income


$

43,412,156

$

26,560,245

$

2,474,488






Earnings per share from continuing operations






Basic


$

0.74

$

0.24

$

0.12


Diluted


$

0.63

$

0.21

$

0.11






Earnings per share from discontinued operations






Basic


$

2.04

$

1.56

$

-


Diluted


$

1.76

$

1.35

$

-





Earnings per share




Basic


$

2.78

$

1.80

$

0.12


Diluted


$

2.39

$

1.56

$

0.11







 

Consolidated Statements of Cash Flows
(expressed in Canadian dollars)

For the year ended December 31

2017

2016 -
Restated

2015

Cash (used in) provided by:




Operating activities:





Net income from continuing operations for the year

$

11,496,693

$

3,624,323

$

1,668,429


Net income from discontinued operations for the year

31,924,191

23,358,318

-


43,420,884

26,982,641

1,668,426


Adjustments for:






Gain on sale of Apicore

(55,254,236)

-

-



Current income tax (recovery) expense

(9,392,836)

504,586

-



Deferred income tax (recovery) expense

(1,513,868)

301,512

(379,000)



Impairment loss (reversal of impairment loss)

635,721

-

(788,305)



Revaluation of holdback receivable

(82,489)

-

-



Revaluation of long-term derivative

-

(20,560,440)

(33,080)



Gain on step acquisition

-

(4,895,573)

-



Loss on settlement of debt

-

-

60,595



Amortization of property, plant and equipment

1,173,019

189,008

31,544



Amortization of intangible assets

6,633,957

2,192,024

659,390



Share‑based compensation

623,115

1,400,241

1,460,316



Write-down (write-up) of inventories

385,289

(108,817)

40,920



Finance expense, net

837,461

3,416,678

4,123,452



Difference between fair value of other long-term






     liability and funding received

-

-

47,222



Unrealized foreign exchange loss

270,663

215,386

111,817


Change in the following:






Accounts receivable

(3,713,375)

(4,174,691)

(8,185,940)



Inventories

145,339

2,520,499

(1,230,619)



Prepaid expenses

76,724

1,706,109

(1,124,095)



Other Assets

33,130

(1,229)

-



Accounts payable and accrued liabilities

48,398,200

143,257

4,637,217



Deferred revenue

(621,455)

(382,727)

-



Other long-term liabilities

77,467

(102,828)

-


Interest paid

(7,485,956)

(1,223,664)

(314,300)


Income taxes paid

(894,327)

-

-


Royalties paid

(1,829,295)

(1,712,390)

(642,768)

Cash flows from operating activities

21,923,132

6,409,582

142,795

Investing activities:





Proceeds from Apicore Sale Transaction

89,719,599

-

-


Acquisition of Class C common shares of Apicore

(31,606,865)

-

-


Acquisition of Class E common shares of Apicore

(2,640,725)

-

-


Acquisition of Apicore, net of cash acquired

-

(41,711,546)

-


Acquisition of property, plant and equipment

(1,194,703)

(464,208)

(226,570)


Acquisition of intangible assets

(127,144)

-

-

Cash flows from (used in) investing activities

54,150,162

(42,175,754)

(226,570)









For the year ended December 31

 

2017

2016 -
Restated

2015

Financing activities:






Issuance of common shares, net of share issue







costs


-

-

3,630,324


Proceeds from exercise of stock options


519,999

1,844,130

33,165


Proceeds from exercise of Apicore stock options


421,942

-

-


Proceeds from exercise of warrants


92,332

39,172

150,245


Issuance of long-term debt


-

56,781,184

-


Repayment of long-term debt


(75,180,908)

(1,666,666)

(694,444)


Repayment of note payable to Apicore


(18,507,400)

-

-


Increase in short-term borrowings


161,923

332,555

-


Decrease (increase) in cash held in escrow


12,809,072

(12,809,072)

-


Finance lease payments


(101,946)

(10,463)

-


Payment of due to vendor


(3,185,945)

-

-

Cash flows (used in) from financing activities


(82,970,931)

44,510,840

3,119,290

Foreign exchange (loss) gain on cash held in foreign






currency


(108,060)

(47,083)

39,208

Increase (decrease) in cash


(7,005,697)

8,697,585

3,074,723

Cash and cash equivalents, beginning of period


12,266,177

3,568,592

493,869

Cash and cash equivalents, end of period


$

5,260,480

$

12,266,177

$

3,568,592

 

SOURCE Medicure Inc.

For further information: James Kinley, Chief Financial Officer, Tel. 888-435-2220, Fax 204-488-9823, E-mail: info@medicure.com, www.medicure.com

 


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