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Concordia International blames industry headwinds as it reports wider quarterly loss

Concordia has launched initiatives to improve its working capital after reporting a wider quarterly loss
Concordia's results come amid accusations it colluded to keep drug prices high

Concordia International (TSE:CXR) reported a wider fourth quarter loss as revenue declined during what the pharmaceutical company said was a challenging and transitional year.

The Canadian company - which was last month accused by the UK regulator of colluding with Actavis UK to keep prices of hydrocortisone tablets high - posted a net loss from continuing operations of US$663.7mln for three months to 31 December, compared to a loss of US$31.5mln the same period a year earlier.

During the period, the company took a research and development impairment charge of US$58.5mln relating to projects that it decided to discontinue.

The group made consolidated revenue of $170.4mln, a decrease of 8.1% compared with the third quarter of 2016. Concordia blamed industry headwinds, which has led to a reassessment of its business model.

"During the fourth quarter, our North American business continued to be challenged,” said chief financial officer Edward Borkowski. “We remain focused on stabilising this segment, while evaluating opportunities to further leverage and diversify our International segment.”

Borkowski said the company has launched initiatives to improve its working capital and operating efficiencies.

He said considering the industry headwinds and its efforts to stabilise the business, the group would not issue full-year guidance for 2017. “We will continue to assess the timing of providing guidance as we make progress throughout the year,” he said.

The full year results come after the Competition and Markets Authority (CMA) earlier this month accused Concordia and Actavis UK, which is now owned by India's Intas Pharmaceuticals, for a significant rise in the price of the tablets in the UK between 2013 and 2016.

The price per pack rose from £49 to £88 over the period, which the CMA said deprived thousands of patients and raised costs for the NHS. 

Actavis, then known as Auden McKenzie, allegedly persuaded Concordia’s former Amdipharm business from entering the market with its own competing generic version of the tablets.

In turn Actavis was believed to have given Amdipharm a fixed supply of the tablets, which are used to treat deficiencies like Addison’s disease, at a low price.

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