Cipher Pharmaceuticals Q4 2024 Update - $CPH.to

Quick update after Q4 2024

*Disclosure: I own shares in CPH.to. I am not a professional. Please do your own due diligence.

Price: $12.40 CAD / $8.43 USD

MC: 213 million USD

EV: 236 million USD

1 year performance: +52%

CPH reported yesterday and held a call this morning. Results were pretty much in line with my expectations and the stock is up 3-4%.

*all numbers in USD unless stated otherwise

Quarter Recap

• Revenue came in at 11.8 million vs 4.9 million last year.

  • This is the first full quarter of the ParaPro products.

• Adj EBITDA came in at 5 million vs 2.9 million last year.

  • Note that this quarter had quite a bit of items added back to get to the adjusted EBITDA this quarter.

• Absorica revenue down to 0.9 million.

• Epuris revenue of 3.5 million vs 2.9 million last year.

  • Market share for Epuris is at 47.7%. This is the highest I have seen them mention.

• Natroba revenue was 7 million for the quarter.

• They plan on restarting the NCIB including purchasing available block purchases.

• Market share for Natroba at 23% for entire anti-parasitic market.

• There was this blurb in the news release relating to Sun Pharma and Absorica. They incurred 0.9 million in additional expenses this quarter.

  • The Company completed an arbitration hearing in mid-January 2025 in connection with its supply and distribution agreement with Sun Pharmaceuticals Industries, Inc. ("Sun") relating to the drug Absorica LD in Canada. The arbitration was initiated by the Company as a result of an alleged breach of the agreement by Sun relating to a purported misappropriation of Cipher's clinical data. The arbitration is expected to be decided in the second quarter of 2025.

Call Notes

• Natroba

  • The wind down of co-promote of Natroba concluded at the end of the quarter.

  • Expenses have been streamlined and distribution expenses have been reduced.

  • They are new selling directly across US.

  • Feel they can expand marketshare in scabies in US.

  • Looking to bring to Canada.

    • Have a pre-meeting with Health Canada in Q2 2025.

    • Preparing submissions now.

• Out-license outside North America

  • In discussions with 8 different parties in 8 different regions.

  • In more advanced discussions with a party in China and Middle East.

• Still looking at company and product acquisitions.

• No questions or comments around MOB.

Valuation

For 2025 I have them doing around 50 million in revenue and 24 million in EBITDA. This is without some additional potential catalysts. The works out to about 10x EV/EBITDA.

Closing Thoughts

I wasn’t expecting much from the financials for the quarter. I like the comments around the NCIB. The are quite a few different potential catalysts for CPH here. I think the market needs to see some deals made in order to re-rate higher.

I continue to hold my position.

Thanks for reading.

Dean

* long CPH.to