(All figures are presented in U.S. Dollars)
-- Epuris$(R)$ sales were $4.1 million during the quarter, a year-over-year increase of 14% compared to Q2 2025 and a sequential increase of 4% over Q1 2026 -- Letter of Intent executed with the pan-Canadian Pharmaceutical Alliance, securing expanded public reimbursement and enhancing patient access to Epuris(R) across Canada -- Launched a stocking program to have Natroba$(TM)$ and/or its authorized generic Spinosad 'Available at Walmart' across the U.S. -- Adjusted EBITDA 1 of $14.6 million for the first half of 2026, a year-over-year increase of 6% compared to the first half of 2025 -- Debt-free balance sheet, with $9.1 million in cash and $65.0 million of undrawn revolving credit facility capacity, plus a $25.0 million accordion option, available to fund growth initiatives
MISSISSAUGA, ON, Aug. 11, 2026 /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, 2026.
Second Quarter 2026 Financial Highlights
(All figures in U.S. dollars, compared to Q2 2025, unless otherwise noted)
-- Net income of $4.0 million, compared to $5.9 million in Q2 2025, a
decrease of 32%
-- Adjusted EBITDA1 was $6.8 million, compared to $7.6 million in Q2 2025, a
decrease of 10%
-- Basic earnings per share of $0.16, compared to $0.23 in Q2 2025, a
decrease of $0.07 or 30%
-- Cash balance of $9.1 million and $nil long-term debt at June 30, 2026
-- Total revenue was $12.1 million in Q2 2026, a decrease of 10%
-- Positive operating cash flows of $3.1 million, compared to $6.0 million
in Q2 2025, a decrease of 49%
Management Commentary
"While this quarter was a departure from the significant growth we have delivered in recent quarters, our original expectations for the U.S. business, led by Natroba(TM), continue to remain in place, despite market dynamics that may emerge over time, both within the product indication and in Medicaid programs. We expect performance to improve in future quarters as certain programs we are implementing take effect. Natroba(TM) remains highly profitable and we believe Cipher's combined business led by Natroba(TM) in the U.S. and Epuris(R) in Canada, is robust and continues to generate strong results for our shareholders, consistent with previous periods and our expectation for future periods, " said Craig Mull, Interim CEO of Cipher. "We are also focused on Cipher's next phases of growth, including the pursuit of various business development opportunities. Recently, we were in the advanced stages of a process for one of these opportunities, however, we ultimately determined that not moving forward with the process was the right decision for Cipher. We continue to assess other acquisition opportunities and are making progress in our efforts with respect to out-licensing of our products into markets outside of North America. We continue to remain optimistic that we will achieve success in finding and executing on the right opportunities."
"During the second quarter, our leading product in the Canadian portfolio, Epuris(R), experienced meaningful growth with a 14% increase in revenue compared to the same quarter last year. With the recently announced Letter of Intent that Cipher executed with the pan-Canadian Pharmaceutical Alliance, which secured expanded public reimbursement, and upon finalizing the Product Listing Agreements with federal, provincial, and territorial public drug plans, we expect the market share of Epuris(R), which currently holds a 47%(2) share of the isotretinoin market in Canada, to continue to grow as a result of additional patient access across Canada," said Ryan Mailling, CFO of Cipher. "Cipher remains debt-free, cash generative and has access to $90.0 million in financing on its credit facility, which positions us well to continue investing in our growth strategy."
Corporate Highlights
-- On March 30, 2026, the Company made a $5.0 million repayment of the
outstanding balance on its revolving credit facility. As a result of this
repayment, the Company no longer has an outstanding balance on its
revolving credit facility and has maintained $9.1 million cash on hand as
at June 30, 2026. Due to the revolving nature of the credit facility,
$65.0 million remains available to the Company to draw upon, plus a $25.0
million accordion option, should additional financing be required.
-- On May 1, 2026, Cipher announced that the Toronto Stock Exchange had
approved the Company's Notice of Intention to Make a Normal Course Issuer
Bid ("NCIB") under which the Company may purchase for cancellation, from
time to time until May 4, 2027, up to an aggregate of 1,490,343 of its
issued and outstanding common shares, being 10% of its public float of
14,903,431 common shares as of April 24, 2026. Under Cipher's previous
NCIB that commenced on May 5, 2025 and expired on May 4, 2026, the
Company had purchased for cancellation 532,940 common shares, with a
total value of $5.4 million.
-- On July 6, 2026, the Company announced that it had successfully completed
negotiations with the pan-Canadian Pharmaceutical Alliance ("pCPA"),
resulting in a Letter of Intent ("LOI") for Epuris(R) (isotretinoin). The
execution of this LOI represents a critical milestone toward securing
expanded public reimbursement and enhancing patient access to Epuris(R)
across Canada. Following this achievement, Cipher is collaborating with
federal, provincial, and territorial public drug plans to finalize
Product Listing Agreements to ensure timely access for eligible Canadian
patients.
-- During Q3 2026, the Company has implemented a stocking program to have
Natroba and/or its authorized generic Spinosad, available at all Walmart
stores across the U.S. This is a component of Cipher's increased focus on
growing the commercial side of the business.
Q2 2026 Financial Review
(All figures in U.S. dollars, compared to Q2 2025, unless otherwise noted)
-- Total revenue was $12.1 million, compared to $13.4 million in Q2 2025, a
decrease of 10%.
-- Revenue from Natroba(TM) was $6.3 million, compared to $7.8 million in Q2
2025, a decrease of 19%, impacted by reduced sales volumes arising from a
reduction in the number of patients covered by Medicaid programs.
-- Revenue from the Canadian product portfolio was $4.6 million, compared to
$4.1 million in Q2 2025, an increase of 12%, driven by growth in Epuris.
-- Licensing revenue was $1.2 million, a decrease of $0.3 million or 22%,
compared to $1.5 million in Q2 2025, primarily due to lower product
shipments to licensing partners.
-- Total gross profit was $9.7 million, compared to $10.9 million in Q2
2025, a decrease of 11%.
-- Gross margin decreased by 1% to 80%, from 81% in Q2 2025, primarily due
to the impact of lower product revenue associated with Natroba and lower
licensing revenue, which contribute comparatively higher margins than the
remainder of the Company's product portfolio.
-- Selling, general and administrative expenses were reduced by $0.7 million
or 16%, to $3.4 million in Q2 2026, compared to $4.1 million in Q2 2025,
as a result of a reduced cost structure for the U.S. commercial
operations, including salaries and benefits costs, combined with lower
professional services fees.
-- Net income and earnings per common share were $4.0 million and $0.16,
respectively, compared to $5.9 million and $0.23, respectively in Q2
2025, impacted by reduced gross profit, combined with an unrealized
foreign exchange loss from the effects of the U.S. dollar's appreciation
relative to the Canadian dollar on the translation of certain net assets
denominated in Canadian dollars.
-- Adjusted EBITDA1 in Q2 2026 was $6.8 million, compared to $7.6 million in
Q2 2025, a decrease of $0.8 million or 10%, largely attributable to lower
gross profit, partially offset by reductions in selling, general and
administrative expenses.
-- Adjusted EBITDA1 per common share in Q2 2026 was $0.27 compared to $0.29
in Q2 2025, a decrease of $0.02 per common share or 7%.
Q2 2026 Year-to-Date Financial Review
(All figures in U.S. dollars, compared to the year-to-date Q2 2025, unless otherwise noted)
-- Total revenue was $24.6 million year-to-date Q2 2026, compared to $25.4
million year-to-date Q2 2025, a decrease of 3%.
-- Total gross profit was $20.0 million year-to-date Q2 2026, consistent
with year-to-date Q2 2025.
-- Gross margin increased by 2% to 81% year-to-date Q2 2026, from 79%
year-to-date Q2 2025, primarily due to the impact of non-cash fair value
adjustments on acquired inventory included in the cost of products sold
in the prior year-to-date period, together with higher licensing revenue
in the current year-to-date period.
-- Selling, general and administrative expenses were reduced by $2.7 million
or 30%, to $6.3 million year-to-date Q2 2026, compared to $9.0 million
year-to-date Q2 2025, as a result of non-recurring legal costs related to
arbitration proceedings incurred during year-to-date Q2 2025 and a
reduced cost structure for the U.S. commercial operations during the
current year-to-date period.
-- Net income and earnings per common share were $10.2 million and $0.40,
respectively, year-to-date Q2 2026, compared to $8.5 million and $0.33,
respectively, year-to-date Q2 2025, with the increase primarily
attributable to reduced selling, general and administrative costs.
-- Adjusted EBITDA1 was $14.6 million year-to-date Q2 2026, compared to
$13.8 million year-to-date Q2 2025, an increase of $0.8 million or 6%.
-- Adjusted EBITDA1 per common share year-to-date Q2 2026 was $0.57 compared
to $0.54 year-to-date Q2 2025, an increase of $0.03 per common share or
6%.
Business Strategy & Outlook
While second quarter results reflected near-term pressure on Natroba(TM) from evolving U.S. reimbursement dynamics, the fundamental drivers of the Company's growth strategy remain firmly in place. Cipher expects to continue to execute on its business strategy in 2026 and remains focused on profitability and driving shareholder value. Key areas of focus include:
-- Driving market share growth of Natroba(TM) in the U.S. anti-parasitic
market, where market leader Permethrin is no longer an effective
treatment due to the loss of efficacy resulting from resistance, yet
still holds 74%2 market share -- representing a substantial, well-defined
conversion opportunity for Natroba(TM), a proven single application
treatment.
-- Acquiring or in-licensing complementary products to add to our North
American platform to enhance the profitability, size and scale of the
business.
-- 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.
-- Pursuing acquisitions of companies or products with specific strategic
value, while remaining disciplined on valuation and terms.
Financial Statements and MD&A
Cipher's financial statements for the three and six months ended June 30, 2026, and management's discussion and analysis (the "MD&A") for the three and six months ended June 30, 2026, 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 12, 2026, 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/dx3kp6moGDY
-- An archived replay of the webcast will be available until August 19,
2026, and can be accessed by dialing (289) 819-1450 or (888) 660-6345 and
entering conference replay code 41132#
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. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets those products either directly or indirectly 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, statements with respect to objectives and goals and strategies to achieve those objectives and goals, 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. Forward-looking statements in this press release include statements relating to Cipher's strategy to expand product offerings through acquisitions and in-licensing; the pursuit of growth through accretive acquisitions of companies or products of strategic value; Cipher's financial position, expected strong cash flows, and ability to execute its growth strategy utilizing its available $90 million in debt financing; the intent to obtain Health Canada regulatory approval for Natroba(TM) and commercialize it directly in the Canadian market using existing infrastructure; expectations for driving market share growth for Natroba(TM) in the U.S. anti-parasitic market; plans to acquire complementary products to enhance the profitability, size, and scale of the North American platform; intentions to out-license Natroba(TM) globally in regions with high unmet need; expectations regarding the successful execution and implementation of Product Listing Agreements with federal, provincial, and territorial public drug plans following the Letter of Intent with the pan-Canadian Pharmaceutical Alliance; and expectations for continued market share growth for Epuris(R) in Canada as a result of expanded public reimbursement and enhanced patient access.
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. These assumptions include, but are not limited to: the Company's ability to successfully identify, evaluate, and complete accretive acquisitions and in-licensing opportunities that fit its strategic goals; the timely and successful receipt of regulatory approval from Health Canada for Natroba(TM); the continued generation of strong cash flows from operations and the continued availability of the $90 million debt financing facility; the ability of Natroba(TM) to effectively compete against existing treatments, such as Permethrin, and capture significant market share in the U.S.; the adequacy of Cipher's existing Canadian sales and distribution infrastructure to commercialize Natroba(TM); the existence of favourable market conditions and global partners willing to enter into out-licensing agreements for Natroba(TM); the successful negotiation and finalization of Product Listing Agreements with federal, provincial, and territorial public drug plans on terms consistent with the Letter of Intent; and the ability of expanded public reimbursement to increase patient access to Epuris(R) and drive continued market share growth in the Canadian isotretinoin market.
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: the inability to identify suitable business development or acquisition targets, or the failure to successfully integrate acquired businesses and achieve expected synergies; delays, restrictions, or the ultimate failure to obtain necessary regulatory approvals, including Health Canada approval for Natroba(TM); intense competition in the pharmaceutical industry and the U.S. anti-parasitic market, which may hinder Natroba(TM)'s market share growth; changes in macroeconomic conditions, interest rates, or the Company's financial performance that could negatively impact cash flows or restrict access to capital and debt financing; challenges in negotiating favourable out-licensing agreements globally or failure of international partners to successfully commercialize products; 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, 2025 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 June 30, 2026. IQVIA Inc.
("IQVIA") is globally recognized as a leading independent
provider of pharmaceutical market intelligence, prescription
tracking and healthcare analytics.
The following is a summary of how EBITDA and Adjusted EBITDA are calculated:
Three months Three months Six months Six months
(IN THOUSANDS endedJune 30, endedJune 30, endedJune 30, endedJune 30,
OF U.S. 2026$ 2025$ 2026$ 2025$
DOLLARS,except
for per share
amounts)
Net income and
comprehensive
income 4,013 5,893 10,176 8,517
Add back:
Depreciation
and
amortization 1,785 1,807 3,592 3,629
Interest
(income)
expense (15) 345 36 815
Income tax
(recovery)
expense (369) 512 (1,583) (225)
EBITDA 5,414 8,557 12,221 12,736
Unrealized
foreign
exchange loss
(gain) 846 (1,759) 1,498 (1,770)
Acquisition,
restructuring
and other
costs 259 -- 259 128
Fair value
adjustments
to acquired
inventory -- 131 -- 777
Costs and
provisions
for
arbitration -- 221 4 1,221
Gain on -- -- (57) --
disposal of
assets
Share-based
compensation 323 436 627 680
Adjusted
EBITDA 6,842 7,586 14,552 13,772
Adjusted
EBITDA per
share --
basic 0.27 0.29 0.57 0.54
Adjusted
EBITDA per
share --
diluted 0.26 0.29 0.56 0.52
Consolidated statements of income and comprehensive income
(IN THOUSANDS OF Three monthsended June 30, Six monthsended June 30,
U.S. DOLLARS,except
for per share
amounts)
2026 2025 2026 2025
$ $ $ $
Revenue
Licensing revenue 1,150 1,478 2,264 2,213
Product revenue 10,917 11,903 22,308 23,187
Net revenue 12,067 13,381 24,572 25,400
Operating expenses
Cost of products
sold 2,368 2,498 4,576 5,377
Research and
development -- -- -- 21
Depreciation and
amortization 1,785 1,807 3,592 3,629
Selling, general and
administrative 3,439 4,085 6,334 9,036
Total operating
expenses 7,592 8,390 14,502 18,063
Other expenses
(income)
Gain on disposal of -- -- (57) --
assets
Interest (income)
expense (15) 345 36 815
Unrealized foreign
exchange loss
(gain) 846 (1,759) 1,498 (1,770)
Total other expenses
(income) 831 (1,414) 1,477 (955)
Income before income
taxes 3,644 6,405 8,593 8,292
Current income tax -- -- -- --
expense
Deferred income tax
(recovery) expense (369) 512 (1,583) (225)
Total income tax
(recovery) expense (369) 512 (1,583) (225)
Net income and
comprehensive
income for the
period 4,013 5,893 10,176 8,517
Income per share
Basic 0.16 0.23 0.40 0.33
Diluted 0.15 0.22 0.39 0.32
Consolidated statements of financial position
As at June 30, As at December 31,
2026 2025
(IN THOUSANDS OF U.S. DOLLARS) $ $
Assets
Current assets
Cash and cash equivalents 9,111 7,493
Accounts receivable 12,142 11,206
Inventory 9,241 8,190
Prepaid expenses and other assets 485 1,158
Total current assets 30,979 28,047
Property and equipment 413 569
Intangible assets 69,380 72,013
Deferred financing costs 162 236
Goodwill 17,447 17,447
Deferred tax assets 38,508 38,190
Total assets 156,889 156,502
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities 6,730 6,391
Income taxes payable -- 7
Interest payable -- 6
Contract liability 12,538 18,349
Current portion of lease obligation 242 289
Total current liabilities 19,510 25,042
Lease obligation 125 216 Long-term debt -- 5,000 Total liabilities 19,635 30,258 Shareholders' equity Share capital 28,427 27,857 Contributed surplus 8,052 7,788 Accumulated other comprehensive loss (9,514) (9,514) Retained earnings 110,289 100,113 Total shareholders' equity 137,254 126,244 Total liabilities and shareholders' equity 156,889 156,502
SOURCE Cipher Pharmaceuticals Inc.
/CONTACT:
Copyright CNW Group 2026
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