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Canwest News Service
While it's still a dismal world out there for Canadian biotech companies, one former darling is finding new life after getting some legal headaches out of the way.
QLT Inc., a Canadian pharmaceutical company know for its drug Visudyne, which combats vision loss, settled its lawsuit with the Massachusetts General Hospital on last week agreeing to pay US$20-million to dismiss the case.
The hospital and the Massachusetts Eye and Ear Infirmary, which settled its own case against the company in January for US$113-million, helped develop the treatment with QLT.
"It was quite an overhang as in it could have been significantly worse than $20-million," said David Dean of Cormark Securities Inc.
The news helped lift QLT's stock by almost 30% last week, closing at $5.04, up 49ยข or 10.8% on Friday alone.
An analyst at RBC Capital also raised his investment rating on shares of QLT from "sector perform" to "outperform," helping drive the stock higher, which is up about 75% year-to-date and has doubled over the last five months.
"The company is looking like it's much less of a risk now that that overhang is gone," Mr. Dean said.
Outside the court room rival drug companies have also taken a chunk out of QLT's market shares.
In 2005 Genentech Inc. entered the market segment with Lucentis, a therapy for age-related macular degeneration that shredded Visudyne's market domination. The following quarter saw sales numbers for Visudyne fall 43% to $61-million versus the same period a year before.
For a time QLT was considered dead in the water but after entering into a new development and manufacturing agreement with Novartis Pharmaceuticals in October the stock is on the move again.
The agreement gives QLT exclusive rights to Visudyne patents in U.S. markets and establishes a 20% royalty on the sale Visudyne by Novartis in all markets outside the United States.
jobrown@nationalpost.com
