QLT Inc. is planning to distribute $200-million (U.S.) in cash to its shareholders, or about $3.95 per share – vastly more than the company’s original target for a return of capital.
The record date for the special distribution would be June 24 and the payout would be the following day, assuming it gets shareholder and other approvals.
The Vancouver-based company was once one of Canada’s most commercially successful biotechnology companies based on the success of its Visudyne treatment for a common form of age-related blindness.
However, the company hasn’t come up with another blockbuster product and shareholders have pushed QLT to downsize – resulting in a reduction of its workforce by more than 80 per cent and the sale of Visudyne.
QLT said its board had initially been authorized to return $100-million in capital but will double that with the proposed distribution, which will be subjected to a shareholder vote June 14.
Combined with a previous repurchase of QLT stock, the distribution will bring the total return of capital to $227-million over the past 12 months.
“We are extremely pleased with the outcome of our persistent and resourceful efforts to return to shareholders more than twice as much capital as we had originally proposed,” said Jason Aryeh, chairman of the QLT board.
“Following the proposed cash distribution, the company believes that it will continue to have sufficient existing cash and contingent financial resources available to it for the development of its synthetic retinoid program,” Aryeh said.
“In addition, we will monitor our cash resources and continue to explore opportunities to enhance shareholder value which, depending on the strategic options available to the company and its cash needs, may include a further return of capital.”