The recently appointed board of Vancouver-based QLT (TSX:ALT) today issued a letter to shareholders in which it outlined its new corporate strategy. The board, which says it has held seven full meetings and more than forty-five board subcommittee meetings in the thirty-five days since it was appointed, will terminate nearly three quarters of its staff; 146 employees, and implement a number of changes.
Much of the changes at QLT are centered around building a leaner operation that can preserve the one indisputable positive the company has -cash. Today’s press release offered that the old QLT would have eventually burned through its existing financial assets, including its cash and remaining royalty payments from Eligard and Novartis. The company’s cash balance at the end of Q1, its most recently reported quarter, was $207.2-million.
Because of today’s changes, QLT says it is now forecasting that EBITDA for fiscal 2012 will now fall between a gain or loss of $3-million, compared to its previous guidance of a loss of $10-million to $17-million. The company lost (US) $30.41-million in 2011.
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Regarding its cash position, which as of today stands at more than half of its $377-million market cap, the plan seemed to change, if ever so slightly. On March 31st, the company announced it would return between $75-million to $100-million to shareholders in the third quarter of 2012 in the form of a one time special dividend.
Today’s press release said the the board “…has authorized a $100-million return of capital to its shareholders, to be implemented as soon as practicable.” The release went on to say that “…the board is currently exploring and evaluating a variety of options to most efficiently and effectively return capital to its shareholders.”
QLT has seen its share of highs and lows. Founded in 1981 as Quadra Logic Technologies, the company went public in 1986 at $2.50 per share. In 2000, the year QLT received FDA approval for macular degeneration treatment Visudyne, the company’s shares soared to over $100 a share. But things came crashing back to earth after Visudyne brought in less revenue than anticipated, and shares of QLT fell to just over the $2 mark in 2009. Today Visudyne, which is marketed by Swiss giant Novartis, has been used in more than two million treatments worldwide and is commercially available in more than 80 countries. But the treatment has has remained a disappointment, numbers-wise; Visudyne sales for the first quarter of 2012 were $22.5-million, an increase of just 3.1% from the first quarter of 2011.
Shares of QLT on the TSX closed today down .1% to $7.69.