Yesterday, drugmaker QLT (NASDAQ:QLTI) released mixed first-quarter financial results as the prospects for its top compounds, macular degeneration treatment Visudyne and hormone therapy Eligard, diverge.

QLT announced its Visudyne sales numbers earlier in the week, so there were no surprises with its 35% decline in revenue for the quarter. But more negative Visudyne news came today when the European Union (EU) marketing authorities decided to recommend an inferior label for the drug after it failed to improve patient outcomes for a subset of macular degeneration patients. QLT estimates that this negative labeling will affect up to 30% of the drug's EU prescriptions, although it will take many months for this to take effect.

Despite the negative European news today, QLT's management seemed optimistic about Visudyne's future (does it really have any other choice?). The company is continuing to project 40% market share of the drug in the long run for treating AMD if doctors start using it in combination therapy with other compounds like Genentech's (NYSE:DNA) Lucentis. The estimated sales opportunity that this sort of market share would support was approximated to be about $250 million by QLT's management. It seems a bit optimistic that Visudyne will get to this sort of market penetration, though, considering that the drug's market share was estimated to be at 15% in the U.S. for March.

On the conference call, management expressed frustration with marketing partner Novartis (NYSE:NVS), which was described as not doing a good enough job at controlling partnership costs and thus driving down profitability of the drug. Novartis will also be marketing Lucentis in the EU, so it will be interesting to see how this dynamic plays out where Novartis is one of QLT's biggest allies but also a potential competitor.

Management also mentioned on the call that the $42 million in sales of Eligard in the first quarter are on track to beating the top end of the company's guidance of $160 million in Eligard sales for the year. Despite this, Eligard sales forecasts will not be raised, due to the assumption that there will probably be a generic version of a competing hormone therapy product on the market some time in 2007.

As I said earlier in the week, "Value investors may get shares (of QLT) on an even bigger sale later in the year or in 2008 once the shoe drops on Visudyne's European sales." With the uglier labeling for the drug meaning an even bigger EU sales drop, this sale price opportunity may come sooner rather than later.

QLT is a Motley Fool Hidden Gems recommendation. You can view the entire Hidden Gems scorecard with your free trial.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.