Not all sales declines are unexpected.
Ever since Genentech's
Sales of Visudyne by partner Novartis
It's important to remember that QLT only gets to book a portion of these sales as revenue (about 25% of sales last quarter), and QLT's margins fall as Visudyne sales decline. There's still plenty of room for international sales to drop further, but U.S. sales are finally starting to level off on a quarter-over-quarter basis, with Q1 sales of $8 million.
The real story with the Visudyne sales announcement is not that Novartis' sales of the drug fell precipitously again, but rather how much value to QLT the drug has. QLT and others are trying to resuscitate the drug's future through further clinical testing of the drug.
The hope is that combination use of Visudyne with Lucentis or its cheaper brother Avastin will show improved efficacy versus Lucentis monotherapy, or as salvage therapy for patients who fail to adequately be treated with Lucentis. Some of the larger clinical studies with these compounds won't be completed until 2009, though, which could mean another year of declining sales for Visudyne.
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Fool contributor Brian Lawler does not own shares of any company mentioned in this article.