Hari Sambasivam

Company Profile
Current Price: Shares O/S (mm):
12-Month Target Price: Share Float (mm):
24-Month Target Price: Market Cap (mm):
Outlook/Recommendation 12-Month Potential Return: 52-Week Range:
24-Month Potential Return:
Year-End Dec 31 1995A 1996A 1997A 1998A 1999E 2000E
Valuation Drivers ($mm)
Cash Reserves $11.8 $97.2 $86.9 $78.2 $228.8 $234.3
Cash Burn Rate $15.0 $9.7 $8.1 $28.9 $28.9 -$7.5
R&D Expenses $12.1 $11.5 $19.2 $23.9 $27.0 $29.7
Profitability
EPS ($0.39) ($0.10) ($0.32) ($0.45) ($0.57) $0.09
Valuation Capital Structure
Total Assets (mm) $22.8 $112.2 $86.9 $103.2
Total Debt (mm) $0.0 $0.0 $0.0 $0.0
Shareholders? Equity (mm) $21.2 $108.9 $94.8 $95.1
Debt/Total Cap 0.0x 0.0x 0.0x 0.0x
Current Assets (mm) $13.9 $107.8 $94.2 $93.3
Current Liabilities (mm) $1.6 $3.3 $6.4 $8.1

Latest Developments

Quick Facts (Figures in Canadian dollars, unless otherwise noted.)
Financial Summary (Figures in Canadian dollars, unless otherwise noted.)
QLT PhotoTherapeutics Inc. (QLT-T, M; QLTI-Q)

November 9, 1999
Recommendation: HOLD

$51.50
$48.50
$60.50
64.0
64.0
$3,297
$11.88 - $67.30 -6%

17% TSE 300 Weight: 0.540%
QLT is a leader in the field of photodynamic therapy. Its first product,
PHOTOFRIN, has been approved for selected oncological indications. However,
QLT?s main opportunity is for Visudyne, which is aimed at treating Age-related
Macular Degeneration (AMD).
QLT?s stock value is driven primarily by the prospects for Visudyne in the
treatment of AMD. Phase III trials (TAP trial; 2 studies in the U.S. and Europe;
609 patients and 22 centres) in previously untreatable patients with blood vessel
formation beneath the fovea (key retinal area) showed encouraging data for
Visudyne. Visudyne elicited stable/improved vision (loss of less than 3 lines of
vision in a standard eye chart) in 61.4% of patients vs. 45.9% for placebo (34%
improvement; statistically significant), with a greater difference anticipated after
2 years of therapy. Improved vision (1 line or more) is seen in 16% of treated
patients vs. 7% on placebo. The data demonstrated good safety and efficacy in
patients with predominantly classic lesions after 1 year of therapy.
Our valuation suggests a target price of $48.50, using 2002E EPS of $2.73, a P/E
multiple of 30 (given the opportunity for growth of Visudyne) and a discount
factor of 30%. The stock is rated as a HOLD due to recent increases, but a Long-Term
BUY given upcoming milestones and sparse near-term competition for
Visudyne.
QLT?s losses per share for Q3/99 and 9M/99 were ($0.15) and ($0.36),
respectively and were consistent with our estimate of ($0.57) for 1999. Expenses
for Q3/99 included QLT?s share of the pre-marketing costs for Visudyne
($3.95mm). The campaign to educate users re: Visudyne is proceeding well
with: (1) 109 of 200 lasers placed; (2) granting of a temporary reimbursement
code in the U.S.; and (3) education of Medicare-related reimbursement agencies.
Photofrin sales in Q3/99 were slow at $1.9mm (same as Q3/98). PHOTOFRIN
received further European approvals assisted by its approval in the UK. Accrual
for PHOTOFRIN?s phase III trial for Barrett?s Esophagus has been completed
with data expected in Q4/00. Near-term milestones for Visudyne include the
FDA advisory committee meeting on 17 Nov and the release in Q2/00 of 2-year
data from the TAP trial and the data from the VIP trial. Our rating remains a
HOLD pending analysis of initial Visudyne revenues in the U.S.