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File photo of a researcher mixing chemicals at a QLT lab in Vancouver.JOHN LEHMANN

Quarterly losses deepened at biotechnology firm QLT Inc. as it booked higher expenses related to its merger with U.S.-based Auxilium Pharmaceuticals.

QLT reported a loss of US$8.6-million in the second quarter compared to $6.2-million a year ago.

Included in the results were $2.5-million in consulting and transaction expenses fees from the decision to explore its strategic alternatives earlier this year, which led to the agreement with Auxilium.

Losses per share for continuing operations were 17 cents versus 12 cents a year earlier.

Research and development costs grew to $4.1-million from $4.4-million.

In June, QLT signed a deal to merge with U.S.-based Auxilium that will see shareholders of the Canadian company owning about one quarter of the combined firm.

The combined organization will be led by Auxilium's current leadership team and will maintain Auxilium's current offices in Chesterbrook, Penn.

Visudyne, a treatment for a common form of age-related blindness, helped make QLT one of Canada's most successful biotechnology companies. However, sales of the drug collapsed after the introduction of Genentech's Lucentis and rising off-label use of cancer treatment Avastin.

Since then, the company has been selling off its products including Visudyne, which was bought by Valeant Pharmaceuticals International Inc. (TSX:VRX), and returning much of the proceeds to shareholders.

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