Intellipharmaceutics International reported the results of operations for the third quarter ended August 31, 2015.
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Revenue related to the company's license and commercialization agreement with Par Pharmaceutical, Inc. in the three months ended August 31, 2015, was $0.8 million versus $1.1 million for the three months ended August 31, 2014.
The lower revenue in the third quarter of 2015 was in large part a result of a softening of pricing conditions and market share, consistent with industry post-exclusivity experience and to a lesser extent, seasonality.
These products are indicated for conditions including attention deficit hyperactivity disorder which the company expects may see increases in prescription rates during the school term and declines in prescription rates during the summer months.
During the quarter ended August 31, 2015 the company held a combined market share of 43% of total generic prescriptions dispensed for the 15 mg and 30 mg strengths, more than double our nearest generic competitor.
The company recorded net loss for the three months ended August 31, 2015 of $1.9 million or $0.08 per common share, compared with a net loss of $1.7 million or $0.07 per common share for the three months ended August 31, 2014.
The net loss for the three months ended August 31, 2015, is higher than the comparable prior period primarily due to the lower revenues for the third quarter of 2015 as explained above.
During the three months ended August 31, 2015, the net loss is attributed to the ongoing R&D and selling, general and administrative expenses, including an increase in bio-studies, partially offset by licensing revenues from commercial sales of generic Focalin XR (dexmethylphenidate hydrochloride extended-release) capsules.
During the three months ended August 31, 2014, the net loss is attributed to the ongoing R&D and selling, general and administrative expense, and salary increases to certain non-management employees; partially offset by licensing and milestone revenue.
Research and development (R&D) expenditures in the three months ended August 31, 2015 were $1.7 million, which were comparable to $1.7 million in the three month period ended August 31, 2014.
The company incurred increased expenses on furthering R&D activities of several generic and NDA 505(b)(2) new product candidates (RexistaTM Oxycodone XR and RegabatinTM XR), offset by lower expenses on stock options and the U.S. dollar strengthening by 17% versus the Canadian dollar (local salaries are paid in Canadian funds) relative to the prior period.
Selling, general and administrative expenses were $0.8 million for the three months ended August 31, 2015 in comparison to $0.9 million for the three months ended August 31, 2014.
The decrease is primarily due to strengthening of the U.S. dollar by 17% versus the Canadian dollar in the third quarter of 2015, relative to the three months ended August 31, 2014. In particular, the stronger US dollar had a positive impact on local wages and salaries and administrative costs, partially offset by higher marketing costs.
The company had cash of $2.8 million as at August 31, 2015 compared to $3.0 million as at May 31, 2015.
For the three months ended August 31, 2015, cash flows used in operating activities decreased to $1.2 million as compared to cash flows used in operating activities for the three months ended August 31, 2014 of $1.4 million.
The August 31, 2015, decrease was due to the receipt of approximately $1 million, compared to $1.6 million.
For the three months ended August 31, 2015, net cash flows provided from financing activities of $1.2 million, related principally to at-the-market issuances of 218,300 of our common shares sold on NASDAQ for gross proceeds of $0.7 million and net proceeds of $0.7 million, as well as $0.6 million related to the exercise of warrants, partially offset by capital lease and financing cost payments. ■