DRAXIS Health has reported a lower net loss despite decreased revenues and earnings for its financial results for the 2008 first quarter, which ended March 31.
The Kirkland, Quebec-based company reported that revenues and earnings for the first quarter of 2008 were below those in the first quarter of 2007 due to lower sales of sterile products, the negative impact of a stronger Canadian dollar relative to the first quarter of 2007, the inclusion in the first quarter of 2007 of non-recurring items and the inclusion in the first quarter of 2008 of the direct and indirect costs related to the potential sale of the company.
Consolidated revenues for the first quarter of 2008 were $19.2 million versus $21 million in the first quarter of 2007. Product sales in the first quarter of 2008 were $18.7 million, down 5 percent from $19.6 million in the first quarter of 2007, according to DRAXIS.
Operating loss for the first quarter of 2008 was $2.4 million compared to operating income of $2.5 million in the same period in 2007. Operating income in the first quarter of 2007 benefited from the receipt of two non-recurring items, namely contingent milestone payments from Shire BioChem of approximately $800,000 and $500,000 in insurance proceeds.
Subsequent to the end of the first quarter of 2008, DRAXIS and Jubilant Organosys entered into an arrangement agreement on April 4, whereby an indirect wholly owned subsidiary of Jubilant will acquire all the outstanding common shares of DRAXIS at a price of $6.00 per share in cash by way of a plan of arrangement, according to the company.
The extent to which the company can reasonably predict the financial performance for 2008 is limited due to variables outside its control, DRAXIS said. Accordingly, the company said it does not plan to provide specific quantitative guidance given the anticipated period of expansion and significant growth that is expected to be accompanied by periods of increased forecast variability.