IntelliPharmaCeutics (IPCI) Q1 Loss Narrower Than Expected

IntelliPharmaCeutics International Inc. IPCI reported loss of 7 cents per share in the first quarter of 2017, narrower than both the Zacks Consensus Estimate of a loss of 8 cents and the year-ago loss of 9 cents per share. The lower net loss may be primarily attributed to higher licensing revenues from commercial sales of generic Novartis AG NVS Focalin XR.

IntelliPharmaCeutics’ share gained 5.37%, following the first-quarter earnings release. However, the share price movement shows that the stock has underperformed the Zacks classified Medical-Drugs industry so far this year. To be precise, the stock lost 23.9% during this period compared with the industry’s decrease of 0.3%.

Total revenue increased from the year-ago figure of $0.6 million to $1.2 million. The increase in revenues was due to the Jan 2017 launch of the 25 mg and 35 mg strengths of generic Focalin XR capsules in the U.S. by its marketing partner, Par Pharmaceutical Inc., a subsidiary of Endo International plc ENDP. Par Pharmaceutical will launch the remaining four strengths in the first half of this year.

However, revenues missed the Zacks Consensus Estimates of $2 million.

Quarter in Detail

The majority of the company’s net revenue was generated by licensing activities, which raked in sales of $1.16 million in the reported quarter, up 83% from the year-ago period.

The company also received a non-refundable up-front payment of $3 million as against a commercial supply agreement with Mallinckrodt in the fourth quarter of 2016. Under the terms of the agreement, the company recognized $0.08 million as revenues for the three months ended Feb 28, 2017.

IntelliPharmaCeutics’ research and development (R&D) expenses rose 11.1% year over year to $2 million as the product development program for both Rexista and Regabatin advanced.

Selling, general and administrative (SG&A) expenses rose 25% to $1 million due to higher corporate legal activities and other professional fees as well as higher compensation expenses.

Pipeline Updates

During the reported quarter, the FDA accepted the company’s new drug application (NDA) filed for its pipeline candidate Rexista (abuse-deterrent oxycodone hydrochloride extended release tablets) in the 10 mg, 15 mg, 20 mg, 30 mg, 40 mg, 60 mg and 80 mg strengths. The company is looking to get Rexista approved for management of pain that is severe enough to require daily, round the clock, long-term opioid treatment and for which alternative treatment options are inadequate.

The company has also made significant progress toward the anticipated launch of its generic version of AstraZeneca’s AZN schizophrenia drug, Seroquel XR tablets by partner Mallinckrodt, in May 2017.

Intellipharmaceutics International Inc. Price

 

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Zacks Rank

IntelliPharmaCeutics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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