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Fiserv Reports First Quarter 2019 Results
GAAP revenue growth of 4 percent and internal revenue growth of 5
percent;
GAAP EPS decrease of 44 percent and adjusted EPS increase of 12 percent;
Full year 2019 guidance affirmed
BROOKFIELD, Wis.–(BUSINESS WIRE)–Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial
services technology solutions, today reported financial results for the
first quarter of 2019.
First Quarter 2019 GAAP Results
GAAP revenue for the company increased 4 percent to $1.50 billion in the
first quarter of 2019 compared to the first quarter of 2018, with 9
percent growth in the Payments segment and 3 percent decline in the
Financial segment. The sale of a 55 percent interest of the company’s
Lending Solutions business (the “Lending Transaction”) in the first
quarter of 2018 resulted in a decline in GAAP revenue in 2019 for the
Financial segment.
GAAP earnings per share was $0.56 in the first quarter of 2019,
decreasing 44 percent compared to the first quarter of 2018. GAAP
earnings per share in the first quarter of 2019 included costs of $0.16
per share related to the previously announced merger agreement to
acquire First Data Corporation. GAAP earnings per share in the first
quarter of 2018 included a gain of $0.37 per share on the Lending
Transaction.
GAAP operating margin was 24.8 percent in the first quarter of 2019,
compared to 42.2 percent in the first quarter of 2018. GAAP operating
margin in the first quarter of 2018 included a $232 million gain
resulting from the Lending Transaction.
Net cash provided by operating activities was $373 million in the first
quarter of 2019 compared to $372 million in the first quarter of 2018.
“We are off to a strong start to the year, with first quarter internal
revenue growth and sales ahead of our initial expectations,” said
Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “In
addition to strong financial performance, we are well into integration
planning and looking forward to completing the First Data acquisition in
the second half of the year.”
First Quarter 2019 Non-GAAP Results and Additional Information
-
Adjusted revenue increased 5 percent to $1.43 billion in the quarter
compared to the prior year period. -
Internal revenue growth for the company was 5 percent in the quarter,
with 4 percent growth in the Payments segment and 6 percent growth in
the Financial segment. -
Adjusted earnings per share increased 12 percent to $0.84 in the
quarter compared to the prior year period. -
Adjusted operating margin was 31.9 percent in the quarter compared to
32.5 percent in the prior year period. -
Free cash flow was $302 million in the quarter compared to $316
million in the prior year period. -
Sales results were up 10 percent in the quarter compared to the prior
year period. -
The company repurchased 1.6 million shares of common stock for
$120 million in the quarter prior to the announcement of the First
Data Corporation transaction, as described below. The company has
deferred additional share repurchase until the close of the
acquisition. As of March 31, 2019, the company had 24.3 million
remaining shares authorized for repurchase. -
On April 18, 2019, Fiserv shareholders approved the issuance of shares
in connection with the First Data Corporation transaction with more
than 99 percent of the vote in favor of the action.
Agreement to Merge with First Data Corporation
On January 16, 2019, Fiserv announced that it had entered into a
definitive merger agreement to acquire First Data Corporation in an
all-stock transaction for an equity value of approximately $22 billion
as of the announcement. The transaction is expected to close during the
second half of 2019 subject to customary closing conditions and
regulatory approvals.
Outlook for 2019
Fiserv continues to expect internal revenue growth in a range of 4.5 to
5 percent for the year. The company also expects adjusted earnings per
share in a range of $3.39 to $3.52, which represents growth of 10 to 14
percent, as adjusted for the Lending Transaction. The company’s outlook
for the year does not include any impact related to its proposed
transaction with First Data Corporation.
“Our strong start to the year has us well positioned to meet our
full-year financial commitments,” said Yabuki.
Earnings Conference Call
The company will discuss its first quarter 2019 results on a conference
call and webcast at 4 p.m. CT on Tuesday, April 30, 2019. To register
for the event, go to fiserv.com
and click on the Q1 Earnings webcast link. Supplemental materials will
be available in the “Investor Relations” section of the website.
About Fiserv
Fiserv, Inc. (NASDAQ: FISV) enables clients worldwide to create and
deliver financial services experiences in step with the way people live
and work today. For 35 years, Fiserv has been a trusted leader in
financial services technology, helping clients achieve best-in-class
results by driving quality and innovation in payments, processing
services, risk and compliance, customer and channel management, and
insights and optimization. Fiserv is a member of the FORTUNE®
500 and has been named among the FORTUNE Magazine World’s Most Admired
Companies® for six consecutive years, recognized for strength
of business model, people management, social responsibility and
innovation leadership. Visit fiserv.com
and follow on social media for more information and the latest company
news.
Use of Non-GAAP Financial Measures
In this earnings release, the company supplements its reporting of
information determined in accordance with GAAP, such as revenue,
operating income, operating margin, net income, earnings per share and
net cash provided by operating activities, with “adjusted revenue,”
“internal revenue growth,” “adjusted operating income,” “adjusted
operating margin,” “adjusted net income,” “adjusted earnings per share,”
“adjusted earnings per share, as adjusted for the Lending Transaction
impact,” and “free cash flow.” Management believes that adjustments for
certain non-cash or other items and the exclusion of certain
pass-through revenue and expenses should enhance shareholders’ ability
to evaluate the company’s performance, as such measures provide
additional insights into the factors and trends affecting its business.
Therefore, the company excludes these items from GAAP revenue, operating
income, operating margin, net income, earnings per share and net cash
provided by operating activities to calculate these non-GAAP measures.
The corresponding reconciliations of these non-GAAP financial measures
to the most comparable GAAP measures are included in this earnings
release, except for forward-looking measures where a reconciliation to
the corresponding GAAP measures is not available due to the variability,
complexity and limited visibility of the non-cash and other items
described below that are excluded from the non-GAAP outlook measures.
See page 13 for additional information regarding the company’s
forward-looking non-GAAP financial measures.
Examples of non-cash or other items may include, but are not limited to,
non-cash deferred revenue adjustments arising from acquisitions,
non-cash intangible asset amortization expense associated with
acquisitions, non-cash impairment charges, severance costs, charges
associated with early debt extinguishment and bridge financing costs,
merger and integration costs, certain costs associated with the
achievement of the company’s operational effectiveness objectives, gains
or losses from dispositions and unconsolidated affiliates, and certain
discrete tax benefits and expenses. The company excludes these items to
more clearly focus on the factors management believes are pertinent to
its operations, and management uses this information to make operating
decisions, including the allocation of resources to the company’s
various businesses.
Internal revenue growth and free cash flow are non-GAAP financial
measures and are described on page 12. Management believes internal
revenue growth is useful because it presents revenue growth excluding
acquisitions, dispositions and the impact of postage reimbursements in
the company’s Output Solutions business, and including deferred revenue
purchase accounting adjustments. Management believes free cash flow is
useful to measure the funds generated in a given period that are
available for debt service requirements and strategic capital decisions.
Management believes this supplemental information enhances shareholders’
ability to evaluate and understand the company’s core business
performance.
These non-GAAP measures may not be comparable to similarly titled
measures reported by other companies and should be considered in
addition to, and not as a substitute for, revenue, operating income,
operating margin, net income, earnings per share and net cash provided
by operating activities or any other amount determined in accordance
with GAAP.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding anticipated internal revenue growth,
adjusted earnings per share and adjusted earnings per share growth.
Statements can generally be identified as forward-looking because they
include words such as “believes,” “anticipates,” “expects,” “could,”
“should” or words of similar meaning. Statements that describe the
company’s future plans, objectives or goals are also forward-looking
statements.
Forward-looking statements are subject to assumptions, risks and
uncertainties that may cause actual results to differ materially from
those contemplated by such forward-looking statements. The factors that
could cause Fiserv’s actual results to differ materially include, among
others: the possibility that Fiserv and First Data Corporation may be
unable to achieve expected synergies and operating efficiencies from the
proposed merger within the expected time frames or at all or to
successfully integrate the operations of First Data Corporation into
those of Fiserv; such integration may be more difficult, time-consuming
or costly than expected; revenues following the transaction may be lower
than expected, including for possible reasons such as unexpected costs,
charges or expenses resulting from the transaction; operating costs,
customer loss and business disruption (including, without limitation,
difficulties in maintaining relationships with employees, customers,
clients or suppliers) may be greater than expected following the
transaction; the retention of certain key employees; the occurrence of
any event, change or other circumstances that could give rise to the
termination of the merger agreement; the outcome of any legal
proceedings that may be instituted against Fiserv, First Data
Corporation and others related to the merger agreement; unforeseen risks
relating to liabilities of Fiserv or First Data Corporation may exist;
the conditions to the completion of the transaction may not be
satisfied, or the regulatory approvals required for the transaction may
not be obtained on the terms expected or on the anticipated schedule;
the amount of the costs, fees, expenses and charges related to the
transaction, including the costs, fees, expenses and charges related to
any financing arrangements entered into in connection with the
transaction; the parties’ ability to meet expectations regarding the
timing, completion and accounting and tax treatments of the transaction.
Fiserv and First Data Corporation are subject to, among other matters,
changes in customer demand for their products and services; pricing and
other actions by competitors; general changes in local, regional,
national and international economic conditions and the impact they may
have on Fiserv and First Data Corporation and their customers and
Fiserv’s and First Data Corporation’s assessment of that impact; rapid
technological developments and changes, and the ability of Fiserv’s and
First Data Corporation’s technology to keep pace with a rapidly evolving
marketplace; the impact of a security breach or operational failure on
Fiserv’s and First Data Corporation’s business; the effect of proposed
and enacted legislative and regulatory actions in the United States and
internationally affecting the financial services industry as a whole
and/or Fiserv and First Data Corporation and their subsidiaries
individually or collectively; regulatory supervision and oversight, and
Fiserv’s and First Data Corporation’s ability to comply with government
regulations; the impact of Fiserv’s and First Data Corporation’s
strategic initiatives; Fiserv’s and First Data Corporation’s ability to
continue to introduce competitive new products and services on a timely,
cost-effective basis; the ability to contain costs and expenses; the
protection and validity of intellectual property rights; the outcome of
pending and future litigation and governmental proceedings; acts of war
and terrorism; and other factors included in “Risk Factors” in Fiserv’s
and First Data Corporation’s respective filings with the SEC, including
their respective Annual Reports on Form 10-K for the year ended December
31, 2018, and in other documents that the companies file with the SEC,
which are available at http://www.sec.gov.
You should consider these factors carefully in evaluating
forward-looking statements and are cautioned not to place undue reliance
on such statements. Fiserv assumes no obligation to update any
forward-looking statements, which speak only as of the date of this news
release.
Fiserv, Inc. | ||||||||
Condensed Consolidated Statements of Income | ||||||||
(In millions, except per share amounts, unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
Revenue | ||||||||
Processing and services | $ | 1,293 | $ | 1,238 | ||||
Product | 209 | 202 | ||||||
Total revenue | 1,502 | 1,440 | ||||||
Expenses | ||||||||
Cost of processing and services | 624 | 568 | ||||||
Cost of product | 174 | 191 | ||||||
Selling, general and administrative | 341 | 305 | ||||||
Gain on sale of business | (10 | ) | (232 | ) | ||||
Total expenses | 1,129 | 832 | ||||||
Operating income | 373 | 608 | ||||||
Interest expense | (59 | ) | (45 | ) | ||||
Debt financing activities | (59 | ) | — | |||||
Non-operating income | 3 | — | ||||||
Income before income taxes and income from investments in |
258 | 563 | ||||||
Income tax provision | (31 | ) | (140 | ) | ||||
Loss from investments in unconsolidated affiliates | (2 | ) | — | |||||
Net income | $ | 225 | $ | 423 | ||||
GAAP earnings per share – diluted | $ | 0.56 | $ | 1.00 | ||||
Diluted shares used in computing earnings per share | 399.1 | 421.6 | ||||||
Earnings per share is calculated using actual, unrounded amounts. | ||||||||
Fiserv, Inc. | ||||||||
Reconciliation of GAAP to | ||||||||
Adjusted Net Income and Adjusted Earnings Per Share | ||||||||
(In millions, except per share amounts, unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
GAAP net income | $ | 225 | $ | 423 | ||||
Adjustments: | ||||||||
Merger, integration and other costs 1 | 41 | 23 | ||||||
Severance costs | 7 | 5 | ||||||
Amortization of acquisition-related intangible assets | 45 | 40 | ||||||
Debt financing activities 2 | 59 | — | ||||||
Lending Transaction impact 3 | — | (9 | ) | |||||
Tax impact of adjustments 4 | (34 | ) | (13 | ) | ||||
Gain on sale of business 5 | (10 | ) | (232 | ) | ||||
Tax impact of gain on sale of business 4 | 2 | 78 | ||||||
Unconsolidated affiliate activities 6 | 3 | — | ||||||
Tax impact of unconsolidated affiliate activities 4 | (1 | ) | — | |||||
Adjusted net income | $ | 337 | $ | 315 | ||||
GAAP earnings per share | $ | 0.56 | $ | 1.00 | ||||
Adjustments – net of income taxes: | ||||||||
Merger, integration and other costs 1 | 0.08 | 0.04 | ||||||
Severance costs | 0.01 | 0.01 | ||||||
Amortization of acquisition-related intangible assets | 0.09 | 0.07 | ||||||
Debt financing activities 2 | 0.11 | — | ||||||
Lending Transaction impact 3 | — | (0.02 | ) | |||||
Gain on sale of business 5 | (0.02 | ) | (0.37 | ) | ||||
Unconsolidated affiliate activities 6 | 0.01 | — | ||||||
Adjusted earnings per share | $ | 0.84 | $ | 0.75 | ||||
1 |
Merger, integration and other costs include acquisition and related integration costs of $30 million in 2019 and $15 million in 2018, and certain costs associated with the achievement of the company’s operational effectiveness objectives of $11 million in 2019 and $8 million in 2018, primarily consisting of expenses related to data center consolidation activities. Acquisition and related integration costs in 2019 include $23 million, primarily consisting of legal and other professional service fees, related to the previously announced acquisition of First Data Corporation. |
2 |
Represents expenses associated with entering into and maintaining a bridge term loan facility for the purpose of refinancing certain indebtedness of First Data Corporation upon the closing date of the acquisition. |
3 |
Represents the earnings attributable to the disposed 55 percent interest of the company’s Lending Solutions business. |
4 |
The tax impact of adjustments is calculated using a tax rate of 22 percent, which approximates the company’s annual effective tax rate, exclusive of the actual tax impacts associated with the gain on sale of business and unconsolidated affiliate activities. |
5 |
Represents the gain on the Lending Transaction, including contingent consideration received in 2019. |
6 |
Represents the company’s share of amortization of acquisition-related intangible assets on the Lending Transaction. |
See page 3 for disclosures related to the use of non-GAAP financial measures. |
|
Earnings per share is calculated using actual, unrounded amounts. | |
Fiserv, Inc. | ||||||||
Financial Results by Segment | ||||||||
(In millions, unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
Total Company | ||||||||
Revenue | $ | 1,502 | $ | 1,440 | ||||
Output Solutions postage reimbursements | (69 | ) | (74 | ) | ||||
Deferred revenue purchase accounting adjustments | — | 2 | ||||||
Adjusted revenue | $ | 1,433 | $ | 1,368 | ||||
Operating income | $ | 373 | $ | 608 | ||||
Merger, integration and other costs | 42 | 23 | ||||||
Severance costs | 7 | 5 | ||||||
Amortization of acquisition-related intangible assets | 45 | 40 | ||||||
Gain on sale of business | (10 | ) | (232 | ) | ||||
Adjusted operating income | $ | 457 | $ | 444 | ||||
Operating margin | 24.8 | % | 42.2 | % | ||||
Adjusted operating margin | 31.9 | % | 32.5 | % | ||||
Payments and Industry Products (“Payments”) | ||||||||
Revenue | $ | 914 | $ | 842 | ||||
Output Solutions postage reimbursements | (69 | ) | (74 | ) | ||||
Deferred revenue purchase accounting adjustments | — | 2 | ||||||
Adjusted revenue | $ | 845 | $ | 770 | ||||
Operating income | $ | 287 | $ | 271 | ||||
Merger, integration and other costs | — | 1 | ||||||
Adjusted operating income | $ | 287 | $ | 272 | ||||
Operating margin | 31.4 | % | 32.2 | % | ||||
Adjusted operating margin | 34.0 | % | 35.4 | % | ||||
Financial Institution Services (“Financial”) | ||||||||
Revenue | $ | 598 | $ | 616 | ||||
Operating income | $ | 199 | $ | 202 | ||||
Operating margin | 33.3 | % | 32.8 | % | ||||
Corporate and Other | ||||||||
Revenue | $ | (10 | ) | $ | (18 | ) | ||
Operating (loss) income | $ | (113 | ) | $ | 135 | |||
Merger, integration and other costs | 42 | 22 | ||||||
Severance costs | 7 | 5 | ||||||
Amortization of acquisition-related intangible assets | 45 | 40 | ||||||
Gain on sale of business | (10 | ) | (232 | ) | ||||
Adjusted operating loss | $ | (29 | ) | $ | (30 | ) | ||
See page 3 for disclosures related to the use of non-GAAP financial measures. |
||||||||
Operating margin percentages are calculated using actual, unrounded amounts. |
||||||||
Fiserv, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(In millions, unaudited) | ||||||||
Three Months Ended March 31, |
||||||||
2019 | 2018 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 225 | $ | 423 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and other amortization | 100 | 93 | ||||||
Amortization of acquisition-related intangible assets | 45 | 40 | ||||||
Amortization of financing costs and debt discounts | 60 | 1 | ||||||
Share-based compensation | 19 | 19 | ||||||
Deferred income taxes | 8 | 77 | ||||||
Gain on sale of business | (10 | ) | (232 | ) | ||||
Loss from investments in unconsolidated affiliates | 2 | — | ||||||
Other operating activities | (2 | ) | — | |||||
Changes in assets and liabilities, net of effects from acquisitions and dispositions: |
||||||||
Trade accounts receivable | 6 | 67 | ||||||
Prepaid expenses and other assets | (26 | ) | (44 | ) | ||||
Contract costs | (58 | ) | (50 | ) | ||||
Accounts payable and other liabilities | (26 | ) | 38 | |||||
Contract liabilities | 30 | (60 | ) | |||||
Net cash provided by operating activities | 373 | 372 | ||||||
Cash flows from investing activities | ||||||||
Capital expenditures, including capitalization of software costs | (98 | ) | (77 | ) | ||||
Proceeds from sale of business | — | 419 | ||||||
Payments for acquisition of business, including working capital adjustments |
56 | — | ||||||
Purchases of investments | — | (1 | ) | |||||
Other investing activities | 6 | (10 | ) | |||||
Net cash (used in) provided by investing activities | (36 | ) | 331 | |||||
Cash flows from financing activities | ||||||||
Debt proceeds | 587 | 509 | ||||||
Debt repayments | (680 | ) | (806 | ) | ||||
Payments of debt financing, redemption and other costs | (56 | ) | — | |||||
Proceeds from issuance of treasury stock | 32 | 28 | ||||||
Purchases of treasury stock, including employee shares withheld for tax obligations |
(183 | ) | (427 | ) | ||||
Net cash used in financing activities | (300 | ) | (696 | ) | ||||
Net change in cash and cash equivalents | 37 | 7 | ||||||
Net cash flows from discontinued operations | — | 50 | ||||||
Cash and cash equivalents, beginning balance | 415 | 325 | ||||||
Cash and cash equivalents, ending balance | $ | 452 | $ | 382 | ||||
Certain prior period amounts have been reclassified to conform to current period presentation. |
||||||||
Fiserv, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(In millions, unaudited) | |||||||
March 31, |
December 31, |
||||||
Assets | |||||||
Cash and cash equivalents | $ | 452 | $ | 415 | |||
Trade accounts receivable – net | 1,044 | 1,049 | |||||
Prepaid expenses and other current assets | 779 | 760 | |||||
Total current assets | 2,275 | 2,224 | |||||
Property and equipment – net | 409 | 398 | |||||
Intangible assets – net | 2,117 | 2,143 | |||||
Goodwill | 5,703 | 5,702 | |||||
Contract costs – net | 435 | 419 | |||||
Other long-term assets | 737 | 376 | |||||
Total assets | $ | 11,676 | $ | 11,262 | |||
Liabilities and Shareholders’ Equity | |||||||
Accounts payable and accrued expenses | $ | 1,718 | $ | 1,626 | |||
Current maturities of long-term debt | 7 | 4 | |||||
Contract liabilities | 395 | 380 | |||||
Total current liabilities | 2,120 | 2,010 | |||||
Long-term debt | 5,868 | 5,955 | |||||
Deferred income taxes | 745 | 745 | |||||
Long-term contract liabilities | 103 | 89 | |||||
Other long-term liabilities | 446 | 170 | |||||
Total liabilities | 9,282 | 8,969 | |||||
Shareholders’ equity | 2,394 | 2,293 | |||||
Total liabilities and shareholders’ equity | $ | 11,676 | $ | 11,262 | |||
Fiserv, Inc. Selected Non-GAAP Financial Measures ($ in millions, unaudited) |
||
Internal Revenue Growth 1 |
Three Months Ended |
|
Payments Segment | 4% | |
Financial Segment | 6% | |
Total Company | 5% | |
1 |
Internal revenue growth is measured as the increase in adjusted revenue (see page 9) for the current period excluding acquired revenue and revenue attributable to dispositions, divided by adjusted revenue from the prior year period excluding revenue attributable to dispositions. Revenue attributable to dispositions includes transition services revenue within Corporate and Other. |
In the first quarter of 2019, acquired revenue was $46 million (all in the Payments segment). Revenue attributable to dispositions was $9 million (all in Corporate and Other) and $54 million (all in the Financial segment) in the first quarter of 2019 and 2018, respectively, from the Lending Transaction. |
|
Free Cash Flow |
Three Months Ended March 31, |
|||||||
2019 | 2018 | |||||||
Net cash provided by operating activities | $ | 373 | $ | 372 | ||||
Capital expenditures | (98 | ) | (77 | ) | ||||
Adjustments: | ||||||||
Severance, merger and integration payments | 35 | 27 | ||||||
Tax payments on adjustments | (8 | ) | (6 | ) | ||||
Free cash flow | $ | 302 | $ | 316 | ||||
See page 3 for disclosures related to the use of non-GAAP |
||||||||
Fiserv, Inc. |
Full Year Forward-Looking Non-GAAP Financial Measures |
Internal Revenue Growth – The company’s internal revenue growth
outlook for 2019 excludes acquisitions, dispositions, and the impact of
postage reimbursements in its Output Solutions business, and includes
deferred revenue purchase accounting adjustments. These adjustments are
subject to variability and are anticipated to increase 2019 GAAP revenue
growth by approximately 1 percentage point as compared to the internal
revenue growth rate.
Adjusted Earnings Per Share – The company’s adjusted earnings per
share outlook for 2019 excludes certain non-cash or other items which
should enhance shareholders’ ability to evaluate the company’s
performance, as such measures provide additional insights into the
factors and trends affecting its business.
Contacts
Media Relations:
Britt Zarling
Vice President,
Corporate Communications
Fiserv, Inc.
414-378-4040
[email protected]
Investor Relations:
Tiffany Willis
Vice President,
Investor Relations
Fiserv, Inc.
678-375-4643
[email protected]
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Cannabis
Cannabis Capsule Global Analysis Report 2024: Market to Reach $79.2 Billion in 2028 – Forecast to 2033 Featuring GW Pharmaceuticals, Trulieve Cannabis, Green Thumb Industries, Tilray, Columbia Care
Innocan
Innocan Pharma Initiates FDA Approval Process for Liposome Injection Therapy for Chronic Pain
With its submission of a Pre-IND Meeting Request Letter, Innocan initiates the regulatory process with the U.S. Food and Drug Administration (FDA) for the approval of its prolonged CBD release technology for human use
HERZLIYA, Israel and CALGARY, AB, April 22, 2024 /PRNewswire/ — Innocan Pharma Corporation (CSE: INNO) (FSE: IP4) (OTCQB: INNPF) (“Innocan” or the “Company”), is pleased to announce that is has reached a key milestone: the Company submitted its letter of application for a Pre-IND meeting, the first phase in the FDA approval process in the United States for Innocan’s Liposome-Cannabidiol (LPT-CBD) injectable treatment of chronic pain.
With the global market for pain therapeutics widely expected to exceed US$100 billion by 2032[1], LPT therapy which requires only one single monthly subcutaneous injection, is positioned as a highly attractive alternative to opioid-based approaches. Opioids have and continue to take a significant human toll in recent years, with more than three-quarters of drug overdose deaths in the United States involving opioids, according to the United States Center for Disease Control and Prevention[2].
Innocan’s therapy has shown consistent efficacy in multiple pre-clinical trials in recent years of it’s LPT-CBD injectable treatment through prolonged and controlled release of CBD in animals with chronic pain conditions. Innocan’s Pre-IND Meeting Request Letter to the FDA is a key milestone and important first step in seeking approval of its LPT-CBD therapy for use in humans. At the Pre-IND meeting, the objective will be to obtain guidance from the FDA on the preclinical and clinical development plan, enabling the initiation of an Investigational New Drug (IND) program in the United States.
Iris Bincovich, CEO of Innocan, commented: “We are extremely excited to embark on this next stage in the development of LPT-CBD injectables, this is a major Milestone for Innocan Pharma. We have invested significant effort and many thousands of person-hours in its research and development, accumulating a wealth of preclinical data that will serve as the foundation for our participation in the FDA process. This is a key milestone for Innocan and marks our first step towards the FDA’s recognition of our technology. We see significant potential for our therapy, with an addressable market for pain management therapeutics expected to exceed US $100 billion by 2032, and we look forward to tapping that.“
Dr. Joseph Pergolizzi, Innocan’s FDA Advisory Board Member, added:
“We have worked hard to catalogue the data collected as part of our animal LPT therapy testing program and prepare it for the FDA. We look forward to working under FDA guidance, with the goal of completing the review process as quickly and efficiently as possible. We believe that Innocan’s unique treatment method, if and when it should become FDA-approved has the potential of being a highly valuable non-opioid addition in the medical arsenal of the management of chronic pain.”
About Innocan
Innocan is a pharmaceutical tech company that operates under two main segments: Pharmaceuticals and Consumer Wellness. In the Pharmaceuticals segment, Innocan focuses on developing innovative drug delivery platform technologies based on advanced cannabinoids science, to treat various conditions to improve patients’ quality of life. This segment involves two drug delivery technologies: (i) LPT CBD- loaded liposome platform facilitating exact dosing and the prolonged and controlled release of CBD into the blood stream. The LPT delivery platform research is in the preclinical trial phase for: Pain Management. In the Consumer Wellness segment, Innocan develops and markets a wide portfolio of innovative and high-performance self-care products to promote a healthier lifestyle. Under this segment, Innocan has established a joint venture by the name of BI Sky Global Ltd. that focuses on advanced targeted online sales. https://innocanpharma.com/
For further information, please contact:
For Innocan Pharma Corporation:
Iris Bincovich, CEO
+1-516-210-4025
+972-54-3012842
+442037699377
[email protected]
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Cautionary note regarding forward-looking information
Certain information set forth in this news release, including, without limitation, information regarding research and development, collaborations, the filing of potential applications with the FDA and other regulatory authorities, the potential achievement of future regulatory milestones, the potential for treatment of conditions and other therapeutic effects resulting from research activities and/or the Company’s products, requisite regulatory approvals and the timing for market entry, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Innocan’s control. The forward-looking information contained in this news release is based on certain key expectations and assumptions made by Innocan, including expectations and assumptions concerning the anticipated benefits of the products, satisfaction of regulatory requirements in various jurisdictions and satisfactory completion of requisite production and distribution arrangements.
Forward-looking information is subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include but are not limited to: general global and local (national) economic, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; and relationships with suppliers, manufacturers, customers, business partners and competitors. There are also risks that are inherent in the nature of product distribution, including import / export matters and the failure to obtain any required regulatory and other approvals (or to do so in a timely manner) and availability in each market of product inputs and finished products. The anticipated timeline for entry to markets may change for a number of reasons, including the inability to secure necessary regulatory requirements, or the need for additional time to conclude and/or satisfy the manufacturing and distribution arrangements. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of launch of product distribution. A comprehensive discussion of other risks that impact Innocan can also be found in Innocan’s public reports and filings which are available under Innocan’s profile at www.sedar.com.
Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Innocan does not undertake to update, correct or revise any forward looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.
[1] https://www.gminsights.com/industry-analysis/pain-management-drugs-market
[2] https://www.cdc.gov/opioids/data/index.html
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Curaleaf
Curaleaf Completes Acquisition of Northern Green Canada
Bolsters Company’s Advantage in Several Key Emerging Markets, including Australia, New Zealand, Germany, Poland and the United Kingdom
NEW YORK, April 22, 2024 /PRNewswire/ — Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer cannabis products, announced today the closing of its acquisition of Northern Green Canada (“NGC”), a vertically integrated Canadian licensed cannabis producer focused primarily on expanding in the international market through its EU-GMP certification. The accretive acquisition amplifies the Company’s strategic advantage in established European markets including Germany, Poland and the United Kingdom and provides a foothold in the emerging markets of Australia and New Zealand.
Integrating NGC’s international operation will equip Curaleaf with a secure and consistent high quality, non-irradiated, indoor EU-GMP flower supply, essential to maintaining its leading positions in Germany, the United Kingdom and Poland.
“We are thrilled to welcome NGC formally to the Curaleaf family of global brands,” said Boris Jordan, Founder and Executive Chairman of Curaleaf. “This is an incredibly important deal for our international expansion strategy, as we’ll be able to bolster our supply of high quality EU-GMP certified flower immediately to key European markets as well as enter the fast-growing markets of Australia and New Zealand.”
The global cannabis market is projected to generate $55 billion in sales by 2027. Emerging markets beyond the United States and Canada, including Germany, Australia and New Zealand are expected to contribute $6.3 billion of the $55 billion projection.
Terms of the acquisition of NGC include an initial payment at closing of the Company’s Subordinate Voting Shares valued at approximately US $16 million, subject to a typical post-closing adjustment. An earnout may also be paid in 2025 based upon 2024 performance of NGC’s operations, up to 50% of which will be cash and the rest paid in additional Subordinate Voting Shares. The issuance of Subordinate Voting Shares in connection with the acquisition of NGC has been conditionally approved by the Toronto Stock Exchange, subject to fulfilling customary listing conditions.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (“Curaleaf”) is a leading international provider of consumer products in cannabis with a mission to enhance lives by cultivating, sharing and celebrating the power of the plant. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf, Select, Grassroots, JAMS, Find and Zero Proof provide industry-leading service, product selection and accessibility across the medical and adult use markets. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Toronto Stock Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com.
Forward Looking Statements
This media advisory contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward–looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans”, “expects” or, “proposed”, “is expected”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward-looking statements and information concerning the expected benefits of the acquisition of NGC, and the Company’s planned expansion on internal markets, the Company’s anticipated strategic advantages in European markets and emerging markets, the integration of NGC’s internal operations, the anticipated global cannabis market, and the listing of shares issuable in connection with the acquisition on the Toronto Stock Exchange. Such forward-looking statements and information reflect management’s current beliefs and are based on assumptions made by and information currently available to the Company with respect to the matters described in this new release, including the Company’s ability to successfully realize the expected benefits of the acquisition, and the Company’s ability to fulfil the listing conditions imposed by the Toronto Stock Exchange. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including the failure to realize the expected benefits of the acquisition, or the Company’s failure to fulfil the listing conditions imposed by the Toronto Stock Exchange. Additional information about these assumptions and risks and uncertainties is contained under “Risk Factors and Uncertainties” in the Company’s latest annual information form filed on March 6, 2024, which is available under the Company’s SEDAR profile at http://www.sedar.com, and in other filings that the Company has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release. The Toronto Stock Exchange has not reviewed, approved or disapproved the content of this news release.
INVESTOR CONTACT
Curaleaf Holdings, Inc.
Camilo Lyon, Chief Investment Officer
[email protected]
MEDIA CONTACT
Curaleaf Holdings, Inc.
Tracy Brady, SVP Corporate Communications
[email protected]
View original content:https://www.prnewswire.co.uk/news-releases/curaleaf-completes-acquisition-of-northern-green-canada-302123010.html
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