(All figures are presented in U.S. Dollars)
-- Adjusted EBITDA1 in Q3 2025 was $7.3 million, an increase of 79% over Q3
2024
-- NatrobaTM sales were $8.1 million during the quarter, a sequential
increase of 4% over Q2 2025
-- Strong cash generation with $10.8 million cash from operations in Q3 2025
-- $12.0 million debt repayments and share repurchases of $1.6 million
during Q3 2025
-- Further de-levering with $5.0 million debt repayments post quarter end
MISSISSAUGA, ON, Nov. 6, 2025 /CNW/ - Cipher Pharmaceuticals Inc. (TSX: CPH) (OTCQX: CPHRF) ("Cipher" or the "Company") today announced its financial and operating results for the three and nine months ended September 30, 2025.
Third Quarter 2025 Financial Highlights
(All figures in U.S. dollars, compared to Q3 2024, unless otherwise noted)
-- Total revenue was $12.8 million in Q3 2025, an increase of 24%
-- Growth from the Canadian product portfolio of 5% in Q3 2025 and 18%
year-to-date in Q3 2025, with revenue of $4.0 million and $12.7 million,
respectively, compared to $3.8 million and $10.8 million in Q3 2024 and
year-to-date in Q3 2024, respectively
-- NatrobaTM product revenue increased by $2.6 million or 47% in Q3 2025
-- Licensing revenue was $0.8 million in Q3 2025, compared to $1.1 million
in Q3 2024
-- Total gross profit from operations increased by 25% to $10.5 million in
Q3 2025
-- Adjusted EBITDA1 of $7.3 million in Q3 2025, compared to $4.1 million in
Q3 2024, a 79% increase
-- Cash balance of $8.4 million at the end of Q3 2025
Management Commentary
Craig Mull, Interim CEO, commented: "The U.S. business, led by Natroba$(TM)$, continues to provide a meaningful growth pillar to an already sound foundation of Cipher's base business, with a sequential quarterly increase in both revenue and earnings for the third quarter.
We continued to spend considerable time identifying, evaluating and pursuing various business development opportunities during the quarter, including opportunities to acquire or in-license products that are complementary to our existing portfolio, as well as opportunities to out-license the Company's existing products, including Natroba(TM) . We are active in discussions with a number of parties, however these discussions do take time and may or may not come to realization. We will also be selective in our approach, ensuring we execute on the right opportunities for the Company. We look forward to providing further updates on our business development activities as they progress."
Ryan Mailling, CFO, commented: "With the acquisition of the Natroba(TM) business closing only 15 months ago, we have made substantial progress towards de-levering the business and are very close to achieving a net-debt free position, with a total of $32 million in repayments on our revolving credit facility within the past six months, and a remaining outstanding balance on the revolving credit facility of only $8 million as of today.
This puts us on excellent footing to execute on our business strategy of pursuing growth opportunities, as we continue to achieve strong cash generation from operations and maintain access to capital with $82 million of total potential debt financing available to us, comprising of $57 million of financing remaining available through the revolving credit facility, plus a $25 million accordion option."
Corporate Highlights
-- On August 6, 2025 and September 9, 2025, the Company made repayments of
the outstanding balance on its revolving credit facility, in the amounts
of $7.0 million and $5.0 million, respectively.
-- On August 26, 2025, the Company announced with great sadness the passing
of Harold M. Wolkin, a valued member of the Company's Board of Directors
(the "Board") and Chair of the Audit Committee. Mr. Wolkin was a very
active member of the Board and his deep understanding of the capital
markets and unwavering commitment to the Company's growth and governance
were tremendously valuable to the Company. During his tenure, he played a
vital role in guiding strategic initiatives, supporting management, and
representing the Company and its shareholders with integrity.
-- On October 31, 2025, the Company repaid an additional $5.0 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 $8.0 million as of October
31, 2025, with $5.1 million of cash remaining on hand. Due to the
revolving nature of the credit facility, an additional $57.0 million
remains available to the Company to draw upon, should financing be
required.
Q3 2025 Financial Review
(All figures in U.S. dollars, compared to Q3 2024, unless otherwise noted)
-- Total revenue was $12.8 million in Q3 2025, compared to $10.4 million in
Q3 2024, an increase of 24%
-- Total gross profit was $10.5 million in Q3 2025, compared to $8.4 million
in Q3 2024, an increase of 25%
-- Gross margin percentage increased by 1% to 82% in Q3 2025 from 81% in Q3
2024 due to strong gross margin generated by Natroba(TM), partially
offset by lower licensing royalties
-- Net income and earnings per common share were $5.5 million and $0.22,
respectively, in Q3 2025, compared to $0.3 million and $0.01,
respectively, in Q3 2024, with the increase primarily attributable to the
additional operating income generated from the Company's U.S. based
operations, led by Natroba(TM), in Q3 2025
-- EBITDA1 in Q3 2025 was $6.3 million, compared to $2.5 million in Q3 2024,
an increase of 148%
-- Adjusted EBITDA1 in Q3 2025 was $7.3 million, compared to $4.1 million in
Q3 2024, an increase of $3.2 million or 79%
-- Adjusted EBITDA1 per share in Q3 2025 was $0.29 compared to $0.16 in Q3
2024, an increase of $0.13 per share or 81%
-- Under the Company's normal course issuer bid ("NCIB"), 141,700 common
shares were repurchased and cancelled during Q3 2025 at an average share
price of CDN$15.41
Q3 2025 Year-to-Date Financial Review
(All figures in U.S. dollars, compared to the year-to-date Q3 2024, unless otherwise noted)
-- Total revenue was $38.2 million year-to-date in Q3 2025, compared to
$21.5 million year-to-date in Q3 2024, an increase of 77%
-- Growth in product revenue from the Canadian product portfolio was $12.7
million year-to-date in Q3 2025, an increase of 18% from $10.8 million
year-to-date in Q3 2024
-- Product revenue from NatrobaTM in the U.S. was $22.5 million year-to-date
in Q3 2025
-- Licensing revenue decreased 44% to $3.0 million year-to-date in Q3 2025
compared to $5.3 million year-to-date in Q3 2024, as a result of lower
product shipments to Cipher's partners on which the Company earns revenue
from supplying product, combined with lower net sales realized by these
partners whereby the Company earns a royalty
-- Gross margin as a percentage of product revenue increased by 3% to 78%
year-to-date in Q3 2025 from 75% year-to-date in Q3 2024, due to strong
margins from Natroba(TM)
-- Net income and earnings per common share were $14.0 million and $0.55,
respectively, year-to-date in Q3 2025, compared to $8.2 million and
$0.34, respectively, year-to-date in Q3 2024, with the increase primarily
attributable to the additional operating income generated from the
Company's U.S. based operations, led by Natroba(TM)
-- EBITDA1 year-to-date in Q3 2025 was $19.0 million, compared to $7.4
million year-to-date in Q3 2024, an increase of 156%
-- Adjusted EBITDA1 was $21.1 million year-to-date in Q3 2025, compared to
$10.7 million year-to-date in Q3 2024, an increase of $10.4 million or
97%
-- Adjusted EBITDA1 per share year-to-date in Q3 2025 was $0.83 compared to
$0.44 year-to-date in Q3 2024, an increase of $0.39 per share or 89%
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(TM) 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(TM) and
commercializing the product directly in the Canadian market by leveraging
Cipher's existing infrastructure in Canada.
-- Out-licensing Natroba(TM) globally where there is high unmet need, such
as warm climate regions.
-- Acquiring complementary 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 nine months ended September 30, 2025, and Management's Discussion and Analysis (the "MD&A") for the three and nine months ended September 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 November 7, 2025 at 8:30 a.m. $(ET)$ to discuss its financial results and other corporate developments.
-- To access the conference call by telephone, dial (416) 945-7677 or (888)
699-1199
-- A live audio webcast will be available at
https://app.webinar.net/gWN6RVqwnle
-- An archived replay of the webcast will be available until November 14,
2025 and can be accessed by dialing (289) 819-1450 or (888) 660-6345 and
entering conference replay code 24367#
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, statements regarding the Company's plans for Natroba(TM), statements regarding potential business development opportunities, the Company's plans to defend the petition to vacate part of the Arbitration decision, 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 arbitration, gain or loss
on disposal of assets and gain or loss on extinguishment
of leases, 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 September 30, 2025.
The following is a summary of how EBITDA and Adjusted EBITDA are calculated:
(IN THOUSANDS Three months Three months Nine months Nine months
OF U.S. ended ended ended ended
DOLLARS, September 30, September 30, September 30, September 30,
2025 2024 2025 2024
except for per $ $ $ $
share amounts)
Net income and
comprehensive
income 5,501 283 14,018 8,201
Add back:
Depreciation
and
amortization 1,797 1,925 5,426 2,506
Interest
expense
(income) 241 292 1,056 (874)
Income tax
(recovery)
expense (1,243) 43 (1,468) (2,392)
EBITDA 6,296 2,543 19,032 7,441
Unrealized
foreign
exchange loss
(gain) 605 (325) (1,165) 718 Acquisition, restructuring and other costs -- 1,577 128 1,861 Fair value -- -- 777 -- adjustments to acquired inventory Costs and provisions for arbitration 13 -- 1,234 -- Gain on disposal of assets (130) -- (130) -- Share-based compensation 533 291 1,213 698 Adjusted EBITDA 7,317 4,086 21,089 10,718 Adjusted EBITDA per share -- basic 0.29 0.16 0.83 0.44 Adjusted EBITDA per share -- dilutive 0.28 0.16 0.81 0.43
Consolidated statements of income and comprehensive income
Three months ended September Nine months ended September
30, 30,
(IN THOUSANDS
OF U.S.
DOLLARS, 2025 2024 2025 2024
except for per $ $ $ $
share amounts)
Revenue
Licensing
revenue 760 1,055 2,973 5,273
Product revenue 12,073 9,315 35,260 16,268
Net revenue 12,833 10,370 38,233 21,541
Operating
expenses
Cost of
products sold 2,348 1,970 7,725 4,131
Research and -- -- 21 --
development
Depreciation
and
amortization 1,797 1,925 5,426 2,506
Selling,
general and
administrative 3,714 6,182 12,750 9,251
Total operating
expenses 7,859 10,077 25,922 15,888
Other expenses
(income)
Gain on
disposal of
assets (130) -- (130) --
Interest
expense
(income) 241 292 1,056 (874)
Unrealized
foreign
exchange loss
(gain) 605 (325) (1,165) 718
Total other
expenses
(income) 716 (33) (239) (156)
Income before
income taxes 4,258 326 12,550 5,809
Current income -- -- -- --
tax expense
Deferred income
tax (recovery)
expense (1,243) 43 (1,468) (2,392)
Total income
tax (recovery)
expense (1,243) 43 (1,468) (2,392)
Net income and
comprehensive
income for the
period 5,501 283 14,018 8,201
Income per
share
Basic 0.22 0.01 0.55 0.34
Diluted 0.21 0.01 0.54 0.33
Consolidated statements of financial position
As at September 30, As at December 31,
2025 2024
(IN THOUSANDS OF U.S. DOLLARS) $ $
Assets
Current assets
Cash and cash equivalents 8,424 17,837
Accounts receivable 10,125 13,860
Inventory 6,710 5,792
Prepaid expenses and other assets 1,402 995
Total current assets 26,661 38,484
Property and equipment 453 680
Intangible assets 73,646 78,754
Deferred financing costs 274 386
Goodwill 17,447 17,447
Deferred tax assets 29,024 26,761
Total assets 147,505 162,512
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued
liabilities 4,128 5,873
Income taxes payable 9 54
Interest payable 2 358
Contract liabilities 16,036 13,306
Current portion of lease obligation 255 283
Total current liabilities 20,430 19,874
Lease obligation 138 295
Long-term debt 13,000 40,000
Total liabilities 33,568 60,169
Shareholders' equity
Share capital 27,808 27,680
Contributed surplus 7,339 6,525
Accumulated other comprehensive loss (9,514) (9,514)
Retained earnings 88,304 77,652
Total shareholders' equity 113,937 102,343
Total liabilities and shareholders'
equity 147,505 162,512
SOURCE Cipher Pharmaceuticals Inc.
/CONTACT:
Copyright CNW Group 2025
(END) Dow Jones Newswires
November 06, 2025 17:00 ET (22:00 GMT)