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Labopharm Reports Results for Third Quarter Fiscal 2007
Date:11/9/2007

in (as a percentage of product sales revenue), excluding a non-recurring favourable adjustment of $236,000, for the third quarter of fiscal 2007 increased to 56% from 37% for the third quarter of fiscal 2006. The increase in adjusted gross margin compared to the third quarter of last year was due to lower manufacturing costs and higher average selling prices per tablet resulting primarily from the launch in Canada, which were partially offset by a royalty expense payable to an affiliate of Purdue Pharma to avoid any potential conflict with respect to patents.

Licensing revenue for the third quarter of fiscal 2007 was $1.1 million and represented a portion of licensing payments received from the Company's licensing and distribution partners for once-daily tramadol. Licensing revenue for the third quarter of fiscal 2006 was $2.2 million. The decrease in licensing revenues was primarily the result of the extensions of the estimated term over which the Company is recognizing the US$20 million up-front payment previously received from Purdue Pharma.

Revenue from research and development collaborations for the third quarter of fiscal 2007 was $1.2 million and was related to the ongoing development of an additional strength of Labopharm's once-daily tramadol product. The Company did not generate revenue from research and development collaborations in the corresponding quarter of last year.

Research and development expenses before research and development tax credits for the third quarter of fiscal 2007 increased to $7.9 million from $3.4 million for the third quarter of fiscal 2006. The increase was primarily due to the Phase III clinical trial for once-daily trazodone that was initiated in the second quarter of fiscal 2007, several pharmacokinetic studies for additional development programs and the general increase in the Company's research and development activities. Research and development tax credits for the third quarter of fiscal 2007 were unchange
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SOURCE Labopharm Inc.
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