Cipher Pharmaceuticals (TSE:CPH) executives said the company’s first full fiscal year including the U.S.-based Natroba business delivered sharp increases in revenue, earnings, and cash generation, while management outlined several initiatives aimed at expanding the U.S. platform and pursuing additional growth opportunities.
Full-year 2025 results boosted by Natroba
Interim CEO Craig Mull said fiscal 2025 was “one of considerable growth,” highlighting that revenue and earnings more than doubled compared with the most recent full year prior to the Natroba acquisition. Cipher acquired the U.S.-based Natroba business in July 2024.
Natroba and authorized generic Spinosad contributed $30.0 million in product revenue in 2025, compared with $12.0 million in 2024. Mull noted the Natroba business produced an 83% gross margin for the year and generated adjusted EBITDA of $17.4 million in 2025.
Cipher’s Canadian “base business” delivered $20.5 million in revenue in 2025 compared with $21.4 million in 2024, while adjusted EBITDA was $10.7 million versus $10.6 million a year earlier, according to Mull. Mailling added that Canadian portfolio product revenue increased to 16.9 million (as stated on the call) from 14.7 million in 2024, led by Epuris.
Epursis growth in Canada offset by licensing declines
Mailling said revenue from Epuris increased $1.7 million, or 13%, to $14.7 million in 2025 from $13.0 million in 2024, driven largely by higher sales volumes. On a constant-currency basis, he said Epuris revenue rose $2.2 million, or 15%.
However, the company’s U.S. licensing revenue declined meaningfully. Licensing revenue for 2025 totaled $3.6 million, down $3.0 million from $6.6 million in 2024. Mailling said the Absorica portfolio was impacted by declines in product shipments and lower royalty revenue tied to lower sales volumes and net sales at Cipher’s distribution partner amid generic competition. He also said royalties were pressured by a contractual rate reduction that took effect in the third quarter of 2024 and by Cipher no longer earning a royalty on Absorica LD in the U.S. market in 2025. Licensing revenue from Lipofen and its authorized generic decreased to $1.6 million, down $0.4 million year over year due to lower sales volumes and net sales at the partner.
Profitability, cash flow, and balance sheet updates
For 2025, Cipher reported net income of $27.3 million, or $1.05 per diluted share, compared with $11.5 million, or $0.46 per diluted share, in 2024. Adjusted EBITDA was $28.1 million in 2025 compared with $15.7 million in 2024, with Mailling citing the Natroba business and growth in Canada, partially offset by lower U.S. licensing revenue.
The company generated $29.7 million in operating cash flow during 2025. Mailling said Cipher ended the year with $7.5 million in cash and $5.0 million in outstanding debt.
Mull and Mailling emphasized deleveraging after the Natroba acquisition. During 2025, the company repaid $35 million on its revolving credit facility, reducing the balance to $5 million at Dec. 31, 2025. Mailling said Cipher also used $5.4 million for common share repurchases under its normal course issuer bid.
Mailling said the revolving credit facility remains available for growth, with $60 million remaining plus a $25 million accordion option, for total potential financing availability of $85 million after repayments.
Fourth-quarter trends: margin rebound, lower SG&A
For the fourth quarter, Mailling reported total net revenue of $12.2 million, up 3% year over year. Natroba and authorized generic Spinosad revenue was $7.4 million, up 14% from $6.5 million a year earlier. Licensing revenue was $0.6 million, down $0.8 million year over year, which Mailling attributed to reduced shipments to distribution partners and lower partner net sales on which Cipher earns royalties.
Fourth-quarter gross margin rose to 81% from 57% in the prior-year quarter. Mailling said the earlier period was impacted by non-recurring fair value adjustments to acquired inventory related to the Natroba acquisition; excluding those adjustments, he said the company saw about a 1% year-over-year gross margin improvement.
Selling, general, and administrative expenses in the quarter were $3.9 million, down from $5.7 million, driven by the absence of non-recurring acquisition-related costs recorded in the prior year, a $0.7 million reduction in legal costs associated with an arbitration matter, and operational efficiencies within the U.S. business. Net income for the quarter was $13.3 million (or $0.51 per diluted share), up from $3.3 million (or $0.13 per diluted share), with Mailling also pointing to a foreign exchange gain of $0.5 million in Q4 2025 compared with a $1.8 million foreign exchange loss a year earlier. Adjusted EBITDA was $7.0 million, up from $5.0 million, and the company generated $8.7 million in operating cash flow in the quarter.
Strategy: DTC launch, Canada filing, partnering, and M&A
Mull outlined multiple growth initiatives centered on expanding the Natroba platform and pursuing business development:
- Direct-to-consumer (DTC) platform for Natroba: Mull said Cipher launched a DTC model “within the last week,” allowing consumers to visit natroba.com to connect with a healthcare professional online and, if qualified, obtain a prescription with streamlined claims adjudication and pickup or delivery. In Q&A, he said the effort involves multiple external groups and consultants rather than being built entirely in-house, and awareness will be driven through Google and social media channels. Mull said the platform could potentially lower sales costs if it works effectively and may be usable for other products with similar characteristics.
- U.S. platform expansion via in-licensing or acquisitions: Management said it is active in discussions for complementary products that could be commercialized through Cipher’s U.S. and Canadian infrastructure, particularly its U.S. sales force. Mull said Cipher has about 28 U.S. sales representatives (a mix of inside and external reps) and may need to add more as products are added, with the DTC platform expected to augment their activity.
- Canadian launch efforts for Natroba: Mull said Health Canada accepted Cipher’s New Drug Submission for Natroba for review on Jan. 28, and management expects a decision by the end of 2026.
- Global out-licensing for Natroba: Mull said Cipher continues to pursue out-licensing and sees unmet need outside the U.S., but discussions are taking longer than hoped. In response to an analyst question, he said the key hurdle has been product pricing in non-U.S. markets rather than lack of interest in the product’s effectiveness.
- Opportunistic company acquisitions: Mull said Cipher is evaluating acquisitions that add size and scale and may improve its ability to compete for deals and potentially support a Nasdaq listing, which he described as a goal the company has discussed previously.
In additional Q&A, management said it continues to list MOB-015 as an opportunity and has not decided to stop pursuing it, though Mull said it has not been a high priority. He also noted the company is monitoring developments involving Moberg in Europe. Mailling also stated the company’s tax loss balance was about CAD 134 million at year-end (before tax effect), as discussed on the call.
About Cipher Pharmaceuticals (TSE:CPH)
Cipher Pharmaceuticals (TSX: CPH) (OTCQX: CPHRF) is a specialty pharmaceutical company with a robust and diversified portfolio of commercial and early to late-stage products, mainly in dermatology. Cipher acquires products that fulfill unmet medical needs, manages the required clinical development and regulatory approval process, and currently markets those products in Canada, the U.S., and South America.
