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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
PURSUANT to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the Month of August, 2000
Commission File Number 0-30860
Axcan Pharma Inc.
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(Exact Name of Registrant)
597, boul, Laurier, Mont-Saint-Hilaire (Quebec), Canada J3H 6C4
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F Form 40-F
[X] [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No
[ ] [X]
This Form 6-K consist of:
A press release issued by Axcan Pharma Inc. on August 10, 2000 entitled "Third
Quarter Results: Axcan Pharma Announces Significant Increase in Revenues and
Earnings."
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AXCAN PHARMA INC.
Date: August 14, 2000 By: /s/ Jean Vezina
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Name: Jean Vezina
Title: Vice-President, Finance and
Chief Financial Officer
Date: August 10, 2000 Investor Contact:
Axcan Pharma Inc. David W. Mims
597, boul, Laurier Executive Vice President and Chief
Mont-Saint-Hillaire (Quebec) Operating Officer
Canada J3H 6C4 Tel: (205) 991-805
Tel: (450) 467-5138
1 (800) 565-325 Isabelle Adjahi
Fax: (450) 464-9979 Director, Investor Relations
www.axcan.com Tel: (450) 467-5138
FOR IMMEDIATE RELEASE
Third Quarter Results
Axcan Pharma Announces Significant Increase in Revenues and Earnings
MONT SAINT-HILAIRE, QUEBEC - Axcan Pharma Inc. ("Axcan") announced today its
results for the third quarter ended June 30, 2000, indicating an increase of
214% in revenues and earnings of $0.11 per share compared to $0.03 per share for
the corresponding period in 1999. All amounts are in US dollars.
"This quarter has been extremely encouraging," said Leon Gosselin, Axcan's
President and CEO. "We have listed our shares on Nasdaq, succeeded in concluding
important new financing, acquired a promising new product, PHOTOFRIN(R), and
have put in place the management structure necessary to assure future growth,"
he added.
Total revenues for the third quarter amounted to $22 million compared to $7
million for the same period last year. This increase is primarily due to the
acquisition of Axcan Scandipharm
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Inc. and the acquisition of the 50% interest in Axcan Schwarz, LLC ("Axcan
Schwarz") that Axcan did not already own. For the first nine months of fiscal
2000, revenues amounted to $63.5 million compared to $19.8 million for the first
nine months of the previous fiscal year.
Much of Axcan's recent sales growth is derived from sales in the United States.
Revenue from US sales of Axcan's products was $50.9 million for the first nine
months compared to $8.7 million for the same period last year.
Net earnings for the three months ended June 30, 2000, amounted to $2.9 million,
or $0.11 per share, compared to $0.4 million, or $0.03 per share, for the
corresponding period of fiscal 1999. Net earnings for the quarter ended June 30,
2000 include earnings from discontinued operations of $1.5 million, or $0.06 per
share, following the sale of Axcan's share in Althin Biopharm, which resulted in
a net gain on disposal of assets of $1.4 million. For the first nine months, net
earnings amounted to $4.3 million, or $0.18 per share compared to $0.3 million,
or $0.02 per share, for the corresponding period one year earlier.
The cost of goods sold was $5.4 million for the quarter ended June 30, 2000,
compared to $1.7 million for the corresponding period in 1999. For the first
nine months, the cost of goods sold amounted to $16.2 million compared to $5.4
million for the same period last year. As a percentage of revenue, cost of goods
sold decreased to 25% for the first nine months of the fiscal year, from 27% a
year earlier. This decrease was primarily due to increased sales in the United
States, where margins are usually higher.
Selling and administrative expenses amounted to $8.4 million for the quarter and
to $23.6 million for the first nine months of fiscal 2000. Corresponding amounts
for last year were $3.4 million for the third quarter and $10.4 million for the
first nine months of the year. The increase is mainly due to the inclusion of
expenses of Scandipharm, following its acquisition in August 1999.
Research and development expenses rose to $1.7 million in the third quarter from
$0.7 million for the same quarter last year and to $4.0 million from $1.7
million for the first nine months. This increase is primarily due to the cost of
the pivotal phase III studies of HELICIDE(TM), which began in September 1999.
Financial expenses amounted to $2.0 million for the quarter compared to $0.1
million for the corresponding period in fiscal 1999. For the first nine months
they amounted to $7.8 million compared to $0.5 million for the same period last
year. The significant increase in these expenses compared to last year is
primarily due to interest paid on loans used to finance the acquisition of
Scandipharm and the purchase of the other 50% interest in Axcan Schwarz, the
former joint venture to market Urso in the United States.
Depreciation and amortization costs rose significantly following the
acquisitions of Scandipharm and of the other 50% interest in Axcan Schwarz. For
the quarter they amounted to $2.6 million compared to $0.5 million for the same
period last year, and for the first nine
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months they were $7.6 million compared to $1.5 million a year earlier.
At the end of the quarter, Axcan's cash, cash equivalents and short-term
investments amounted to $8.1 million compared to $16.0 million one year earlier.
On July 7, 2000, Axcan received $15 million, the remaining portion of the $40.1
million public offering in the United States, bringing cash and cash equivalents
to $23 million.
RECENT HIGHLIGHTS
NASDAQ LISTING
During the third quarter, Axcan listed its common shares on NASDAQ National
Market and completed the first tranche of a financing in the United States
totalling US$40.1 million. The proceeds were used to reimburse a loan contracted
for the acquisition of Scandipharm and for general corporate purposes.
PHOTOFRIN(R) ACQUISITION AND DEVELOPMENTS
On June 9, Axcan also concluded the acquisition of PHOTOFRIN(R) from QLT Inc.
PHOTOFRIN(R) is the first drug approved in any jurisdiction as a photodynamic
therapy for the treatment of certain cancers. Terms of the transaction included
a cash payment of CDN$2.5 million and the issuance of 1,283,333 common shares of
Axcan Pharma at CDN$15.00 each, as well as milestone payments, contingent on
future product and treatment approvals. Currently approved indications include
the treatment of esophageal, bladder and non-small lung cancers. Axcan believes
that PHOTOFRIN(R) may also be extremely useful in the treatment of dysplasia and
metaplasia associated with Barrett's esophagus, a condition that results from
prolonged heartburn and is often a precursor of cancer. Axcan recently completed
the enrolment of 260 patients for a pivotal phase III study for this indication.
Following the close of the quarter, Axcan announced marketing approvals for
PHOTOFRIN(R) in Sweden, Ireland and Italy for the palliative treatment of
esophageal and non-small lung cancer. As a result, the treatment can now be
marketed in 11 European countries including France, Finland, Germany, the
Netherlands, Portugal and the United Kingdom. In addition, Axcan concluded an
agreement with Grupo Ferrer, a company based in Barcelona, with expertise in the
fields of gastroenterology and oncology, for the distribution of PHOTOFRIN(R) in
Spain, Portugal, Greece and all of Central and South America.
The Company also signed at the beginning of August, a development and supply
agreement with Diomed Inc. of Andover, Massachusetts, to provide a new compact
diode laser that is the key to developing PHOTOFRIN(R) photodynamic therapy as
an alternative treatment for certain cancers.
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SALE OF ALTHIN BIOPHARM INC.
On May 31, Axcan completed the sale to Baxter Corporation of its 50% interest in
Althin Biopharm Inc., a company active in the field of hemodialysis, for US$5
million in cash. This sale allowed Axcan to reduce its long-term debt and to
continue to pursue its objective of focusing efforts on gastroenterology.
NEW MANAGEMENT STRUCTURE
In order to keep pace with the Company's rapid growth in the United States, its
expanded pipeline and the acquisition of PHOTOFRIN(R) which will require
additional efforts in Europe, Axcan modified its management structure somewhat
in the past quarter.
Following the appointment of Mr. David W. Mims as Executive Vice President and
COO in the second quarter, the Company recently appointed Mr. Patrick L. McLean,
previously Vice President, Sales and Marketing, to the position of Vice
President and General Manager, Canada and Europe, to oversee all of Axcan's
operations in these two territories. Dr. Francois Martin was appointed Senior
Vice President, Scientific Affairs and Dr. Patrick Colin was named Vice
President, Clinical Research, reflecting their additional responsibilities as
the Company's pipeline grows.
Axcan is a leading North American pharmaceutical company in the field of
gastroenterology. Axcan is the only Canadian pharmaceutical company with its own
US sales and marketing organization and its common shares are listed on the
Toronto Stock Exchange under the symbol "AXP" and on the NASDAQ National Market
under the symbol "AXCA."
This press release contains forward looking statements, which reflect the
Corporation's current expectation regarding future events. The forward-looking
statements involve risks and uncertainties. Actual events could differ
materially from those projected herein and depend on a number of factors,
including the successful and timely completion of clinical studies, the
uncertainties related to the regulatory process and the commercialization of the
drug or vaccine thereafter. Investors should consult the Corporation's ongoing
quarterly filings and annual reports for additional information on risks and
uncertainties relating to these forward looking statements. The reader is
cautioned not to rely on these forward-looking statements. The Corporation
disclaims any obligation to update these forward-looking statements.
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CONSOLIDATED BALANCE SHEETS (unaudited)
<TABLE>
<CAPTION>
JUNE 30
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in thousands of U.S. dollars 2000 1999
$ $
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents 8,139 1,356
Short - term investments, at cost -- 14,602
Accounts receivable 12,622 5,845
Income taxes receivable 4,716 --
Inventories 12,636 6,428
Prepaid expenses and deposit 1,549 1,161
Future income taxes 2,422 132
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42,084 29,524
Investments in companies subject
to significant influence 1,232 2,297
Investment in a private company, at cost 1,156 --
Investments in bonds, at amortized cost -- 1,634
Other investments, at cost 216 533
Capital assets 163,042 23,490
Future income taxes 7,911 3,794
Debt issue costs -- 57
New product acquisition costs,
at amortized cost 583 638
Goodwill, at amortized cost 22,295 1,183
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238,519 63,150
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Liabilities
Current liabilities
Accounts payable and
accrued liabilities 10,642 3,303
Payable to a joint venturer -- 8,132
Income taxes payable 3,831 600
Instalments on
long-term debt 11,054 34
Future income taxes 301 146
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25,828 12,215
Long-term debt 37,076 2,184
Contingency provisions 5,378 --
Future income taxes 25,528 783
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93,810 15,182
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Shareholders' Equity
Equity component of deferred
purchase price 2,704 --
Capital stock 137,603 44,778
Retained earnings 5,540 3,190
Accumulated foreign currency translation adjustments (1,138) --
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144,709 47,968
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238,519 63,150
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</TABLE>
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CONSOLIDATED CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
THREE-MONTHS PERIODS NINE-MONTHS PERIODS
ENDED JUNE 30 ENDED JUNE 30
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in thousands of U.S. dollars 2000 1999 2000 1999
$ $ $ $
<S> <C> <C> <C> <C>
Operations
Earnings from continuing operations 1,411 285 2,515 59
Dividends from a company subject to
significant influence -- -- -- 17
Non-cash items
Depreciation and amortization 2,639 476 8,069 1,437
Foreign currency fluctuation -- -- (154) 82
Future income taxes (414) 102 (1,669) 8
Shares in earnings of companies subject to
significant influence (1,068) 54 (969) 131
Changes in working capital items from continuing
operations 1,940 (236) 1,120 (1,850)
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Cash flow from continuing operations 4,508 681 8,912 (116)
Cash flow from discontinued operations 220 (63) 400 178
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Cash flow from operating activities 4,728 618 9,312 62
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Financing
Repayment of notes payable (25,000) -- (92,164) --
Repayment of long-term debt (2,359) 4 (13,023) 9
Issue of shares 25,075 -- 60,039 23
Shares issue expenses (2,132) -- (3,853) --
Cash flows from discontinued operations (3) (4) (12) (13)
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Cash flow from financing activities (4,419) -- (49,013) 19
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Investment
Acquisition of short-term investments -- (4,303) 19,300 (1,029)
Disposal of short-term investments 4,588 -- 4,588 --
Acquisition of investments (581) (100) (619) (99)
Disposal of investments 1,516 (37) 1,837 (37)
Acquisition of capital assets (1,952) (229) (2,761) (619)
Net cash use by a business disposal -- (24) (24)
Cash flows from discontinued operations 7 34 22 18
Other (659) -- (2,158) --
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Cash flow from investment activities 2,919 (4,659) 20,209 (1,790)
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Foreign exchange gain on cash held in foreign currency 25 -- 72 --
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Net increase (decrease) in cash 3,253 (4,041) (19,420) (1,709)
Cash and cash equivalents beginning of period 4,886 5,397 27,559 3,065
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Cash and cash equivalents,end of period 8,139 1,356 8,139 1,356
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</TABLE>
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CONSOLIDATED EARNINGS (unaudited)
<TABLE>
<CAPTION>
THREE-MONTHS PERIODS NINE-MONTHS PERIODS
ENDED JUNE 30 ENDED JUNE 30
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in thousands of U.S. dollars, except amounts per share 2000 1999 2000 1999
$ $ $ $
<S> <C> <C> <C> <C>
Revenue 22,015 7,035 63,543 19,821
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Cost of goods sold 5,406 1,697 16,150 5,375
Selling and administrative expenses 8,406 3,395 23,635 10,378
Research and development expenses 1,714 693 4,033 1,737
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15,526 5,785 43,818 17,490
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6,489 1,250 19,725 2,331
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Financial expenses 1,992 139 7,846 544
Depreciation and amortization 2,628 480 7,582 1,461
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4,620 619 15,428 2,005
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Earnings before income taxes 1,869 631 4,297 326
Income taxes 458 346 1,782 268
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Earnings from continuing operations 1,411 285 2,515 58
Earnings from discontinued operations 1,529 134 1,796 263
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Net earnings 2,940 419 4,311 321
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Per common share:
Earnings from continuing operations 0.05 0.02 0.11 (0,00)
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Earnings from discontinued operations 0.06 0.01 0.07 0.02
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Net earnings 0.11 0.03 0.18 0.02
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Weighted average number of common shares 26,934,912 15,766,054 23,976,323 15,763,853
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</TABLE>
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