October 28, 2008 / 12:06 PM / 10 years ago

UPDATE 3-QLT eyes share buyback as divestitures provide cash

* Eyes share buyback

* Returns to third-quarter profit

* Restructuring near completion

* Shares rise 1.8 percent (Adds details. In U.S. dollars)

TORONTO, Oct 28 (Reuters) - QLT Inc QLT.TO QLTI.O on Tuesday reported a jump in third-quarter profit on gains from divestments, and the Canadian pharmaceutical company said it is considering a share buyback.

Under current market conditions, the company said it wanted to assure investors that it would conserve cash. It said it is not holding the money for any acquisitions.

“We are in a vicious bear market and we are trying to reassure investors that we want to protect and conserve our cash and everything that we have done thus far has aligned with that,” Bob Butchofsky, president and chief executive, said on a conference call with analysts.

“We are responding to the market dynamics and we really view cash conservation as something that is really critical.”

The company last bought shares in a Dutch auction in August 2006.

Its shares were up 1.8 percent at C$2.86 on the Toronto Stock Exchange.

Butchofsky, who said the company has “a lot of cash on our balance sheets,” said it would not make a decision on what to do with the cash until it has determined the future of its Eligard prostate cancer treatment.

The company said during the call that it was “in active negotiations” on the sale of Eligard, but refused to comment on it further until the deal was concluded.

Earlier this year, the company announced restructuring measures, including the sale of its U.S. operations whose primary assets Eligard; Aczone, a dermatology product for the treatment of acne vulgaris; and the Atrigel drug delivery system.

It also said at the time it would sell land and buildings at its corporate headquarters in Vancouver and cut 115 jobs, with planned future reductions as assets are divested.

Since then it has cut staff and jettisoned some of the assets, which helped prop up its third-quarter results. This included the sale of the building which added $21.3 million. The sale Aczone and Atrigel provided another $134.3 million.

This helped the company’s profit rise sharply to $146.9 million, or $1.97 a share, from $351,000, or nil a share, a year earlier.

On a continuing operations basis, QLT earned 16 cents a share, compared with a loss of 2 cents. Excluding special items, profit was 5 cents a share.

Analysts had expected an average loss of 6 cents a share on revenue of $12.3 million, according to Reuters Estimates.

Third-quarter revenue fell 25.6 percent to $10.9 million as a drop in sales of Visudyne, aimed at fighting macular degeneration, was only partly offset by higher revenue from Eligard.

Worldwide sales of Visudyne, which the company shares with global marketing partner Novartis NOVN.VX, were $34.1 million, down 30.1 percent from 2007, as previously announced. The company said it expected Visudyne sales for the year will be at the low end of its forecast range of $145 million to $160 million.

Global Eligard sales jumped 18.3 percent to $54.7 million.

Separately on Tuesday, QLT said Phase II data from a study of its Punctal Plug Drug Delivery System, a glaucoma treatment, were encouraging. (Additional reporting by Ka Yan Ng; Editing by Frank McGurty) ($1=$1.28 Canadian) (Reporting by Scott Anderson; Editing by Frank McGurty)

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