QLT (QLTI) Reports Narrower-than-Expected Q3 Loss

QLT Inc. (QLTI) reported a third-quarter 2014 loss of 10 cents. The quarterly loss was narrower than the Zacks Consensus Estimate of a loss of 12 cents and the year-ago loss of 15 cents per share. Share price rose slightly (0.5%) on the news, however overall the stock has fallen (0.75%) to date.

QLT did not report any revenues during the third 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).

Research and development (R&D) expenses at QLT came in at $2.8 million in the third quarter of 2014, down 46.7% from the year-ago quarter. The decline in R&D expense was primarily due to higher costs incurred in 2013 related to certain toxicity studies and phase Ib retreatment study on QLT091001. Cost savings on workforce reduction and other restructuring activities at QLT undertaken in 2012 also led to the lower R&D.

On the other hand, selling, general and administrative expenses increased 42.5% to $2.4 million in the reported quarter. The increase was primarily due to consulting and transaction fees incurred in connection with the proposed merger with Auxilium Pharmaceuticals, Inc. (AUXL).

However, Auxilium Pharma terminated its merger deal with QLT. As per the termination provisions of the agreement, Auxilium paid QLT a termination fee of $28.4 million earlier this month. Auxilium Pharma is now set to be acquired by Endo International (ENDP). The deal is valued at $2.6 billion (read more: Endo to Buy Auxilium for $2.6B, Diversify Portfolio).

QLT carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Bristol-Myers Squibb Company (BMY) with a Zacks Rank #2 (Buy).