Cangene Profitable During Its Second Quarter

March 21, 2011

WINNIPEG'S largest life sciences company, Cangene Corp., returned to profitability in the second quarter with revenue up compared to the year before.

The plasma-based pharmaceutical and bio-defence manufacturer produced $2.4 million in profits or four cents a share for the quarter ending Jan. 31, on sales of $40.2 million.

That's down from a gain of $5.7 million, or eight cents a share in the corresponding quarter last year. Revenue was up three per cent.

The company blames the earnings drop on the higher cost of sales, and increased amortization and selling, general and administrative expenses.

"Strong revenues highlighted the second quarter of 2011 and marked a return to profitability after two weaker quarters," said Michael Graham, Cangene's acting president and CEO.

In the first quarter of this fiscal year, Cangene recorded a net loss of $5.36 million.

The company made two shipments of its anthrax immune globulin to the U.S. Strategic National Stockpile, which contributed to strong results in the quarter.

But Graham said the company cannot predict when those shipments will occur.

The company is receiving lower royalties from Apotex Group, its majority shareholder, reflecting a reduced royalty rate in fiscal 2011,the last year of the royalty agreement.

The company's longtime CEO, John Langstaff, retired earlier in the quarter.

Graham said the company expects to conclude its search for a new CEO by the end of the fiscal year.

Its efforts to develop its own immune globulin intravenous (IGIV) product to compete in the $4.5-billion global market to treat primary immune deficiency and other inflammatory diseases slowed in the quarter while the plant was changed over to commence production-scale engineering runs.

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