Cipher Pharmaceuticals Reports Second Quarter 2025 Results, Including Record Revenue

Cision Canada

2 days ago

(All figures are presented in U.S. Dollars)
Highest single-quarter revenue in the Company's history with total revenue of $13.4 million in Q2 2025
Adjusted EBITDA 1 in Q2 2025 was $7.6 million, an increase of 148% over Q2 2024
Epuris sales volumes grew 14% in the quarter compared to Q2 2024
Natroba TM sales were $7.8 million during the quarter, a sequential increase of 16% over Q1 2025
Strong cash generation with $6.0 million cash from operations in Q2 2025
$15.0 million debt repayment and share repurchases of $2.1 million during Q2 2025
$7.0 million debt repayment subsequent to Q2 2025
MISSISSAUGA, ON, Aug. 7, 2025 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: CPH) (OTCQX: CPHRF) (" Cipher" or the " Company") today announced its financial and operating results for the three and six months ended June 30, 2025.
First Quarter 2025 Financial Highlights
(All figures in U.S. dollars, compared to Q2 2024, unless otherwise noted)
Total revenue was $13.4 million in Q2 2025, an increase of 152%
Canadian product portfolio revenue increased by 12% to $4.1 million in Q2 2025, compared to $3.7 million in Q2 2024
Natroba TM provided $7.8 million of incremental product revenue in Q2 2025
Licensing revenue was $1.5 million in Q2 2025, compared to $1.6 million in Q2 2024
Total gross profit from operations increased by 159% to $10.9 million in Q2 2025
Adjusted EBITDA 1 increased 148% to $7.6 million in Q2 2025
Cash balance of $11.3 million at the end of Q2 2025
Management Commentary
Craig Mull, Interim CEO, commented:"Cipher has continued its growth during the second quarter of 2025, with quarterly revenue achieving a historical record for the Company, largely contributed to by our U.S. business. The U.S. business, led by Natroba™, continues to exceed our expectations from when we acquired the business almost one year ago, in July 2024. The U.S. business has contributed to a more than doubling of Cipher's total revenue and Adjusted EBITDA 1 compared to the prior year, for both the second quarter and the year-to-date. We look forward to providing further updates on the impact our strategy and activities surrounding the business have on the performance of Natroba™ for the remainder of 2025.
Cipher's base business in Canada continues to experience year-over-year growth from Epuris®, with the product realizing revenue growth of 25% for the year-to-date 2025 compared to the same period in 2024, which largely offsets the decline in revenue derived from our licensing portfolio as a result of the competitive pressures faced by our commercial partners for these out-licensed products in the U.S. market."
Ryan Mailling, CFO, commented: "In Q2 2025, we had another quarter of strong cash generation, with $6.0 million of cash generated from operations during the quarter. Cash generated in the second quarter, combined with previous cash accumulation, was allocated during the quarter to a $15.0 million repayment on our revolving credit facility, de-levering the business, as well as repurchases of our common shares through our normal course issuer bid ("NCIB"), which returned $2.1 million to our shareholders. After this effective use of available capital, at the end of the second quarter $11.3 million of cash remained on our balance sheet.
Accordingly, subsequent to the end of the quarter we further allocated $7.0 million to an additional repayment on our revolving credit facility, resulting in $47.0 million of financing remaining available through the facility, plus a $25.0 million accordion option, which in total is $72.0 million of total potential financing available. We continue to be in an excellent position to execute on growth opportunities."
Corporate Highlights
On April 29, 2025, Cipher announced its product Natroba TM received preferred step-through status on Medicaid in the state of Illinois, whereby its main product competitor Permethrin 5% was downgraded to non-preferred on the state's preferred drug listing. This move by Illinois Medicaid will require all prescriptions for Permethrin 5% to first 'step-though' Natroba TM representing the treatment of choice in the state.
On May 1, 2025, Cipher announced that the Toronto Stock Exchange (the "TSX") had approved the Company's Notice of Intention to Make a Normal Course Issuer Bid under which the Company may purchase for cancellation, from time to time up to May 4, 2026, up to an aggregate of 1,485,260 of its issued and outstanding common shares, being 10% of its public float of 14,852,604 common shares as of April 22, 2025. In accordance with TSX rules, any daily repurchases on the TSX under the NCIB are limited to a maximum of 10,427 common shares, which represents 25% of the average daily trading volume on the TSX of 41,708 for the six months ended March 31, 2025. To facilitate larger repurchases, the Company is entitled to make one weekly block purchase on the TSX that may exceed the daily repurchase restrictions.
On May 8, 2025, the Company repaid $15.0 million of the outstanding balance on its revolving credit facility.
On August 6, 2025, the Company repaid $7.0 million of the remaining outstanding balance on its revolving credit facility. As a result of the repayment, the outstanding balance on the Company's revolving credit facility has been reduced to $18.0 million. Due to the revolving nature of the credit facility, an additional $47.0 million remains available to the Company to draw upon, should financing be required.
Q2 2025 Financial Review
(All figures in U.S. dollars, compared to Q2 2024, unless otherwise noted)
Total revenue was $13.4 million in Q2 2025, compared to $5.3 million in Q2 2024, an increase of 152%
Product revenue from the Canadian product portfolio was $4.1 million in Q2 2025, an increase of 12% from $3.7 million in Q2 2024
Product revenue from Natroba TM in the U.S. was $7.8 million, up sequentially from $6.7 million in Q1 2025
Licensing revenue decreased 9% to $1.5 million in Q2 2025 compared to $1.6 million in Q2 2024, impacted by lower net sales realized by Cipher's partners on which the Company earns a royalty and contractual royalty rate reductions, partially offset by higher product shipments to licensing partners
Total gross profit was $10.9 million in Q2 2025, compared to $4.2 million in Q2 2024, an increase of 159%
Gross margin as a percentage of product revenue increased by 9% to 79% in Q2 2025 from 70% in Q2 2024, driven by the addition of Natroba™, which was acquired on July 29, 2024
Total gross margin increased by 2% to 81% in Q2 2025 from 79% in Q2 2024 due to the addition of Natroba™, partially offset by reduced licensing revenue
Net income and earnings per common share were $5.9 million and $0.23, respectively, in Q2 2025, compared to $3.0 million and $0.12, respectively, in Q2 2024, with the increase primarily attributable to the additional operating income generated from Natroba™ in Q2 2025
EBITDA 1 in Q2 2025 was $8.6 million, compared to $2.2 million in Q2 2024, an increase of 290%
Adjusted EBITDA 1 in Q2 2025 was $7.6 million, compared to $3.1 million in Q2 2024, an increase of $4.5 million or 148%
Adjusted EBITDA 1 per share in Q2 2025 was $0.29 compared to $0.13 in Q2 2024, an increase of $0.16 per share or 123%
Under the Company's NCIB, 230,278 common shares were repurchased and cancelled at an average share price of CDN$12.74
Business Strategy & Outlook
Cipher expects to continue to execute on its business strategy, remains focused on profitability and delivering shareholder value. Key areas of focus include:
Driving market share growth of Natroba™ in the anti-parasitic market in the U.S. where market leader "Permethrin" is no longer an effective treatment but still holds 75% 2 market share.
Obtaining Health Canada regulatory approval for Natroba™ and commercializing the product directly in the Canadian market by leveraging Cipher's existing infrastructure in Canada.
Out-licensing Natroba™ globally where there is high unmet need, such as warm climate regions.
Acquiring complementary dermatology products to add to our North American platform to enhance the profitability, size and scale of the business.
Financial Statements and MD&A
Cipher's financial statements for the three and six months ended June 30, 2025, and Management's Discussion and Analysis (the "MD&A") for the three and six months ended June 30, 2025, are available on the Company's website at www.cipherpharma.com in the "Investors" section under "Financial Reports" and on SEDAR+ at www.sedarplus.ca.
Notice of Conference Call
Cipher will hold a conference call on August 8, 2025 at 8:30 a.m. (ET) to discuss its financial results and other corporate developments.
To access the conference call by telephone, dial [phone] or [phone]
A live audio webcast will be available at https://app.webinar.net/2vQrZ2AYmV5
An archived replay of the webcast will be available until August 15, 2025 and can be accessed by dialing [phone] or [phone] and entering conference replay code 36094#
About Cipher Pharmaceuticals Inc.
Cipher Pharmaceuticals (TSX: CPH) (OTCQX: CPHRF) is a specialty pharmaceutical company with a robust and diversified portfolio of commercial and early to late-stage products, mainly in dermatology. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets those products in Canada, the U.S., and South America. For more information, visit www.cipherpharma.com.
Forward-Looking Statements and Non-IFRS Measures
This document includes forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, expectations for future growth, objectives and goals and strategies to achieve those objectives and goals, the potential purchases to be made under the NCIB, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "will", "could", "should", "would", "suspect", "outlook", "believe", "plan", "anticipate", "estimate", "expect", "intend", "forecast", "objective", "hope" and "continue" (or the negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements. By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on these statements as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, our ability to enter into development, manufacturing and marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect; our dependency on a limited number of products; our dependency on protection from patents that will expire; the extent and impact of health pandemic outbreaks on our business; integration difficulties and other risks if we acquire or in-license technologies or product candidates; reliance on third parties for the marketing of certain products; the product approval process by regulators which can be highly unpredictable; the timing of completion of clinical trials, regulatory submissions and regulatory approvals; reliance on third parties to manufacture our products and events outside of our control that could adversely impact the ability of our manufacturing partners to supply products to meet our demands; we may be subject to future product liability claims; unexpected product safety or efficacy concerns may arise; we generate license revenue from a limited number of distribution and supply agreements; the Company's performance depends, in part, on the performance of its distributors and suppliers; the pharmaceutical industry is highly competitive with new competing product entrants; requirements for additional capital to fund future operations; products may be subject to pricing regulation; dependence on key managerial personnel and external collaborators; the ability to receive regulatory approvals for products in development or future products; certain of our products are subject to regulation as controlled substances; limitations on reimbursement in the healthcare industry; the ability to convince public payors and hospitals to include our products on the approved formulary lists; ability to receive timely payment from certain customers; application of various laws pertaining to health care fraud and abuse; the Company's reliance on the success of strategic investments and partnerships; the publication of negative results of clinical trials; unpredictable development goals and projected time frames; rising insurance costs; ability to enforce covenants not to compete; risks associated with the healthcare industry generally; we may be unsuccessful in evaluating material risks involved in completed and future acquisitions; we may be unable to identify, acquire or integrate acquisition targets successfully; success in applying tax loss carry forwards; inability to meet covenants under our long-term debt arrangement; compliance with privacy and security regulation; our policies regarding product returns, allowances and chargebacks may reduce revenues; additional regulatory burden and controls over financial reporting; application of regulations that could restrict our activities and abilities to generate revenues as planned; reliance on third parties to perform distribution, logistics, invoicing, regulatory and sales services; general commercial litigation, class actions, other litigation claims and regulatory actions; the difficulty for shareholders to realize in the United States upon judgments of U.S. courts predicated upon civil liability of the Company and its directors and officers who are not residents of the United States; increases in tariffs, trade restrictions or taxes on our products; the potential violation of intellectual property rights of third parties; our efforts to obtain, protect or enforce our patents and other intellectual property rights related to our products; changes in U.S., Canadian or foreign patent laws; inability to protect our trademarks from infringement; shareholders may be further diluted if we issue securities to raise capital; volatility of our share price; the fact that we have a significant shareholder; our operating results may fluctuate significantly; and our debt obligations will have priority over the common shares of the Company in the event of a liquidation, dissolution or winding up. We caution that the foregoing list of important factors that may affect future results is not exhaustive. When reviewing our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about factors that may cause actual results to differ materially from expectations, and about material factors or assumptions applied in making forward-looking statements, may be found in the "Risk Factors" section of our MD&A for the year ended December 31, 2024 and the Company's Annual Information Form, and elsewhere in our filings with Canadian securities regulators. Except as required by Canadian securities law, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.
1)
EBITDA and adjusted EBITDA are non-IFRS financial measures. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are unlikely to be comparable to similar measures presented by other companies. Management uses non-IFRS measures such as Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA to provide investors with supplemental measures of the Company's operating performance and thus highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, non-cash share-based compensation, changes in fair value of derivative financial instruments, costs and provisions for legal matters, loss on disposal of assets and loss on extinguishment of lease, impairment of intangible assets, acquisition costs, restructuring costs, fair value adjustments to acquired inventory and unrealized foreign exchange gains and losses.
2)
IQVIA market data as at June 30, 2025.
The following is a summary of how EBITDA and Adjusted EBITDA are calculated:
(IN THOUSANDS OF U.S. DOLLARS,
Three months
ended
June 30, 2025
Three months
ended
June 30, 2024
Six months
ended
June 30, 2025
Six months
ended
June 30, 2024
except for per share amounts)
$
$
$
$
Net income and comprehensive income
5,893
2,995
8,517
7,918
Add back:
Depreciation and amortization
1,807
292
3,629
581
Interest expense (income)
345
(611)
815
(1,166)
Income tax expense (recovery)
512
(480)
(225)
(2,435)
EBITDA
8,557
2,196
12,736
4,898
Unrealized foreign exchange (gain) loss
(1,759)
401
(1,770)
1,043
Acquisition, restructuring and other costs
—
284
128
284
Fair value adjustments to acquired inventory
131
—
777
—
Costs and provisions for legal matter
221
—
1,221
—
Share-based compensation
436
183
680
407
Adjusted EBITDA
7,586
3,064
13,772
6,632
Adjusted EBITDA per share – basic
0.29
0.13
0.54
0.28
Adjusted EBITDA per share – dilutive
0.29
0.12
0.52
0.27
Consolidated statements of income and comprehensive income
Three months
ended June 30,
Six months
ended June 30,
(IN THOUSANDS OF U.S. DOLLARS,
2025
2024
2025
2024
except for per share amounts)
$
$
$
$
Revenue
Licensing revenue
1,478
1,618
2,213
4,218
Product revenue
11,903
3,686
23,187
6,953
Net revenue
13,381
5,304
25,400
11,171
Operating expenses
Cost of products sold
2,498
1,106
5,377
2,161
Research and development
—
—
21
—
Depreciation and amortization
1,807
292
3,629
581
Selling, general and administrative
4,085
1,601
9,036
3,069
Total operating expenses
8,390
2,999
18,063
5,811
Other (income) expenses
Interest expense (income)
345
(611)
815
(1,166)
Unrealized foreign exchange (gain) loss
(1,759)
401
(1,770)
1,043
Total other (income) expenses
(1,414)
(210)
(955)
(123)
Income before income taxes
6,405
2,515
8,292
5,483
Current income tax expense
—
—
—
—
Deferred income tax expense (recovery)
512
(480)
(225)
(2,435)
Total income tax expense (recovery)
512
(480)
(225)
(2,435)
Net income and comprehensive income for the period
5,893
2,995
8,517
7,918
Income per share
Basic
0.23
0.12
0.33
0.33
Diluted
0.22
0.12
0.32
0.32
Consolidated statements of financial position
As at June 30,
As at December 31,
2025
2024
(IN THOUSANDS OF U.S. DOLLARS)
$
$
Assets
Current assets
Cash and cash equivalents
11,339
17,837
Accounts receivable
11,868
13,860
Inventory
5,576
5,792
Prepaid expenses and other assets
1,766
995
Total current assets
30,549
38,484
Property and equipment
522
680
Intangible assets
75,287
78,754
Deferred financing costs
311
386
Goodwill
17,447
17,447
Deferred tax assets
28,278
26,761
Total assets
152,394
162,512
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities
4,846
5,873
Income taxes payable
9
54
Interest payable
82
358
Contract liabilities
12,564
13,306
Current portion of lease obligation
262
283
Total current liabilities
17,763
19,874
Lease obligation
193
295
Long-term debt
25,000
40,000
Total liabilities
42,956
60,169
Shareholders' equity
Share capital
27,556
27,680
Contributed surplus
7,149
6,525
Accumulated other comprehensive loss
(9,514)
(9,514)
Retained earnings
84,247
77,652
Total shareholders' equity
109,438
102,343
Total liabilities and shareholders' equity
152,394
162,512
SOURCE Cipher Pharmaceuticals Inc.