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DelMar Pharmaceuticals Announces First Quarter Fiscal Year 2018 Financial Results

VANCOUVER, British Columbia and MENLO PARK, Calif., Nov. 13, 2017 /PRNewswire/ -- DelMar Pharmaceuticals, Inc. (NASDAQ: DMPI) ("DelMar" or the "Company"), a biopharmaceutical company focused on the development of new cancer therapies, announced its financial results for the first quarter ended September 30, 2017. DelMar executive management will host a business update conference call and live webcast for investors, analysts and other interested parties on Tuesday, November 14, 2017 at 4:30 p.m. Eastern Standard Time.

KEY DEVELOPMENTS

  • Initiated the STAR-3 pivotal Phase 3 clinical trial of VAL-083 in refractory GBM and enrolled its first patient.
  • Initiated patient recruitment for an open label Phase 2 clinical trial of VAL-083 in newly diagnosed patients with MGMT-unmethylated GBM.
  • Received a notice of allowance from the FDA to commence with a Phase 1/2 VAL-083 REPROVe clinical trial in platinum-resistant ovarian cancer.
  • Presented new data and promising research results at peer-reviewed scientific meetings supporting the potential of VAL-083 in the glioblastoma and ovarian cancer treatment landscape.
  • Granted a new patent from the U.S. Patent and Trademark Office covering improved analytical methods related to the manufacturing of VAL-083.
  • Completed offerings of common stock and warrants for aggregate gross proceeds of approximately $19.0 million.

"I am extremely pleased with the progress achieved this past quarter across clinical and corporate development fronts. As we transition to a late stage development company with a balanced pipeline of oncology indications, including a pivotal Phase 3 study, I am looking forward to playing an integral role in guiding the company to its next phase of growth," commented Saiid Zarrabian, Interim Chief Executive Officer.

The first quarter of 2018 proved to be an important period for the clinical development of the VAL-083 pipeline of therapeutic candidates. In July, the Company initiated its pivotal Phase 3 Study in Temozolomide-Avastin Recurrent GBM ("STAR-3") and during the quarter enrolled our first patient. The STAR-3 GBM trial is an adaptive design, randomized, controlled, pivotal Phase 3 clinical trial to assess the efficacy and safety of VAL-083 versus salvage therapy in patients with late-stage glioblastoma multiforme (GBM) whose disease has progressed following prior treatment with temozolomide and Avastin, for whom there is currently no standard-of-care therapy. A total of up to 180 eligible patients will be randomized at approximately 25 centers in the United States to receive VAL-083 or "investigator's choice salvage therapy" in a 2:1 fashion. The primary endpoint of the trial is overall survival of VAL-083 versus a control arm consisting of physician's choice of temozolomide, lomustine or carboplatin chemotherapy. The statistical design between the two arms of the study is 90% power, and includes an interim analysis at 50% of events.

In September, DelMar initiated patient recruitment for an open label Phase 2 clinical trial of VAL-083 in newly diagnosed patients with MGMT-unmethylated GBM. The study will enroll 20-30 newly diagnosed GBM patients whose tumors exhibit high-expression of the DNA-repair enzyme O6-methylguanine methyltransferase (MGMT) and will be treated with VAL-083 in combination with radiotherapy to examine the safety and efficacy of VAL-083 in this population. The primary efficacy endpoint of this trial is progression free survival (PFS). Results will be used to guide the design of global randomized studies, which if successful, will position VAL-083 as a potential replacement for the current standard-of-care (chemoradiation with temozolomide) in newly diagnosed GBM patients, particularly for the approximately 2/3 of patients whose tumors feature MGMT-unmethylated GBM. Patients with an unmethylated-MGMT promoter express high levels of MGMT, which inhibits the anti-tumor activity of temozolomide, the current standard-of-care chemotherapy used in the treatment of GBM, resulting in treatment resistance and poor patient outcomes.

Also in September, the Company received a notice of allowance from the FDA to commence with a multi-center Phase 1/2 Study of VAL-083 in patients with Recurrent Platinum Resistant Ovarian Cancer ("VAL-083 REPROVe Trial"). Ovarian cancer remains the leading cause of death among women with gynecological cancers and the fifth most frequent cause of cancer deaths in women overall. The American Cancer Society estimates that in 2017, approximately 22,440 women in the US will be diagnosed with ovarian cancer and approximately 14,080 will die from their disease. The majority of these deaths were patients whose tumors had become resistant to platinum-based chemotherapy regimens. Currently, there are no high-efficacy therapeutic options for platinum-resistant ovarian cancer, leaving these cancer patients with very poor prognosis. DelMar plans to initiate the REPROVe trial as soon as practicable.

Throughout the period, DelMar presented new data and promising research results supporting the therapeutic potential of VAL-083 at peer-reviewed scientific conferences. Highlights included, presenting data supporting the effectiveness of VAL-083 in the treatment of GBM at the annual meetings of the American Society for Clinical Oncology ("ASCO"), the American Association of Cancer Research ("AACR"), the World Federation of NeuroOncology Societies ("WFNOS"), the European Association for NeuroOncology and the recent AACR Special Conference on Ovarian Cancer.

On the corporate development front, DelMar continued to enhance its operational capabilities and overall positioning. In September, the U.S. Patent and Trademark Office granted DelMar a new patent covering improved analytical methods related to manufacturing of VAL-083. The patent strengthens the Company's control over VAL-083's manufacturing process. VAL-083 is currently protected by eight US patents and eight patents outside of the US, with issued claims providing patent protection into 2033 in the United States.

In April and September, DelMar completed offerings of common stock and warrants for aggregate gross proceeds of approximately $19.0 million. The Company intends to use the net proceeds of these offerings for clinical trials and general corporate purposes, which may include working capital, capital expenditures, research and development and other business initiatives

SUMMARY OF FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2017

At September 30, 2017, the Company had cash and clinical trial deposits on hand of approximately $14.1 million (unaudited).

For the quarter ended September 30, 2017, the Company reported a net loss of $2,666,406 or $(0.18) per share, compared to a net loss of $2,290,339, or $(0.23) per share, for the quarter ended September 30, 2016.

The following represents selected financial information as of September 30, 2017. The Company's financial information has been prepared in accordance with U.S. GAAP and this selected information should be read in conjunction with DelMar's consolidated financial statements and management's discussion and analysis ("MD&A"), as filed.

DelMar's financial statements as filed with the U.S. Securities Exchange Commission can be viewed on the company's website at: http://ir.delmarpharma.com/all-sec-filings.

Selected Balance Sheet Data




September 30,

2017

$



June 30,

2017

$







Cash and cash equivalents



13,156,485




6,586,014

Working capital



12,888,140




6,566,371

Total assets



14,448,163




7,911,021

Derivative liability



4,660




61,228

Total stockholders' equity



12,918,754




6,578,524

Selected Statement of Operations Data


For the three months ended:




September 30,



September 30,




2017



2016




$



$









Research and development



1,934,643




732,729


General and administrative



744,621




1,316,639


Change in fair value of stock option and derivative liabilities



(56,568)




225,688


Foreign exchange loss



43,866




15,324


Interest income



(156)




(41)


Net and comprehensive loss for the period



2,666,406




2,290,339


Series B Preferred stock dividend



41,666




307,298


Net and comprehensive loss available to common stockholders



2,708,072




2,597,637


Basic weighted average number of shares outstanding



15,292,781




11,301,989


Basic and fully diluted loss per share



0.18




0.23


Excluding the impact of non-cash expense, research and development expenses increased to $1,939,617 during the current quarter compared to $676,892 for the same period in the prior year. The increase was largely attributable to VAL-083 clinical development and manufacturing costs related to the Company's pivotal STAR-3 refractory-GBM clinical trial and two Phase 2 clinical trials in MGMT-unmethylated GBM, all of which were initiated during the past 9 months.

Excluding the impact of non-cash expenses, general and administrative expenses decreased in the quarter ended September 30, 2017 to $676,258 compared to $726,414 for the quarter ended September 30, 2016.

Based on current estimates, the Company believes that it will be able to fund operations beyond the next 12 months.

CONFERENCE CALL DETAILS

DelMar plans to host a conference call to discuss its financial results for the quarter ended September 30, 2017 and provide a corporate update on Tuesday, November 14, 2017, at 4:30 p.m. Eastern Time. For both "listen-only" participants and those who wish to take part in the question and answer portion of the call, the telephone Dial-in Number is 1 866 831 8713 (toll free) with Conference ID DELMAR.

A replay of the conference call will be available on the IR Calendar of the Investors section of the Company's website at www.delmarpharma.com and will be archived for 30 days.

About DelMar Pharmaceuticals, Inc.

DelMar Pharmaceuticals is focused on the development and commercialization of new therapies for cancer patients who have limited or no treatment options. By focusing on understanding tumor biology and mechanisms of treatment resistance, the Company identifies biomarkers to personalize new therapies in indications where patients are failing, or have become intolerable to modern targeted or biologic treatments.

The Company's current pipeline is based around VAL-083, a "first-in-class," small-molecule chemotherapeutic with a novel mechanism of action that has demonstrated clinical activity against a range of cancers including central nervous system, ovarian and other solid tumors (e.g. NSCLC, bladder cancer, head & neck) in U.S. clinical trials sponsored by the NCI. Based on DelMar's internal research programs and these prior NCI-sponsored clinical studies, the Company is conducting clinical trials to support the development and commercialization of VAL-083 across multiple oncology indications to solve significant unmet medical needs.

VAL-083 is also being studied in two collaborator-supported, biomarker driven, Phase 2 clinical trials for MGMT-unmethylated GBM. Overcoming MGMT-mediated resistance represents a significant unmet medical need in the treatment of GBM. DelMar also recently announced the allowance of a separate IND for VAL-083 as a potential treatment for platinum-resistant ovarian cancer.

Further information on DelMar's clinical trials can be found on clinicaltrials.gov: https://www.clinicaltrials.gov/ct2/results?cond=&term=val-083&cntry1=&state1=&recrs

For further information, please visit http://delmarpharma.com/; or contact DelMar Pharmaceuticals Investor Relations: ir@delmarpharma.com / (604) 629-5989.

Connect with the Company on Twitter, LinkedIn, Facebook, and Google+.

Safe Harbor Statement

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell products based on its technology; the expected benefits and efficacy of the Company's products and technology; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, clinical studies and future product commercialization; and, the Company's business, research, product development, regulatory approval, marketing and distribution plans and strategies. These and other factors are identified and described in more detail in our filings with the SEC, including, our current reports on Form 8-K.

DelMar Pharmaceuticals, Inc.

Consolidated Balance Sheet


(in US dollars unless otherwise noted)




Note



June 30,
2017
$



June 30,
2016
$


Assets




















Current assets










Cash







6,586,014




6,157,264


Prepaid expenses and deposits



8




1,208,122




144,131


Taxes and other receivables







76,595




18,387









7,870,731




6,319,782


Intangible assets - net







40,290




36,017









7,911,021




6,355,799















Liabilities


























Current liabilities













Accounts payable and accrued liabilities







1,182,312




584,002


Related party payables



6




88,957




43,444


Current portion of derivative liability



4




33,091




-






















1,304,360




627,446















Stock option liability



5




-




175,875















Derivative liability



4




28,137




693,700






















1,332,497




1,497,021


Stockholders' accumulated equity


























Preferred stock













Authorized













5,000,000 shares, $0.001 par value













Issued and outstanding













278,530 Series A shares at June 30, 2017 (June 30, 2016 – 278,530)



3,5




278,530




278,530


881,113 Series B shares at June 30, 2017 (June 30, 2016 – 902,238)



5




6,146,880




6,294,255


1 special voting share at June 30, 2017 (June 30, 2016 – 1)







-




-















Common stock













Authorized













50,000,000 shares, $0.001 par value













14,509,633 issued at June 30, 2017 (June 30, 2016 – 11,187,023)



5




14,510




11,187















Additional paid-in capital



5




36,665,285




28,833,105















Warrants



5




4,570,574




1,658,382















Accumulated deficit







(41,118,433)




(32,237,859)















Accumulated other comprehensive income







21,178




21,178






















6,578,524




4,858,778






















7,911,021




6,355,799


DelMar Pharmaceuticals, Inc.

Consolidated Statement of Operations and Comprehensive Loss


(in US dollars unless otherwise noted)




Note



Year
ended
June 30,
2017
$



Year
ended
June 30,
2016
$












Expenses










Research and development



6




5,003,640




3,360,878


General and administrative



6




3,317,189




2,853,140






















8,320,829




6,214,018















Other loss (income)













Change in fair value of stock option and derivative liabilities



4,5




(245,963)




2,341,660


Change in fair value of derivative liability due to change in warrant terms



4,5




-




295,456


Foreign exchange loss







7,355




13,838


Interest income







(457)




(108)






















(239,065)




2,650,846















Net and comprehensive loss for the year







8,081,764




8,864,864















Computation of basic loss per share













Net and comprehensive loss for the year







8,081,764




8,864,864


Series B Preferred stock dividend



5




790,454




238,326









8,872,218




9,103,190















Basic and fully diluted loss per share







0.74




0.83















Basic weighted average number of shares







12,047,079




10,948,481



The accompanying notes are an integral part of these consolidated financial statements.

DelMar Pharmaceuticals, Inc.

Consolidated Statement of Cash Flows


(in US dollars unless otherwise noted)







Years ended June 30,







2017



2016




Note



$



$


Cash flows from operating activities










Loss for the period







(8,081,764)




(8,864,864)


Items not affecting cash













Amortization of intangible assets







16,683




10,288


Change in fair value of stock option and derivative liabilities



4,5




(245,963)




2,341,660


Change in fair value of derivative liability due change in warrant terms



4,5




-




295,456


Shares issued for services



5




564,000




146,900


Warrants issued for services



5




81,602




647,902


Stock option expense



5




124,747




394,132















Changes in non-cash working capital













Prepaid expenses and deposits



8




(1,063,991)




100,907


Taxes and other receivables







(58,208)




7,444


Accounts payable and accrued liabilities







598,310




(178,263)


Related party payables



6




45,513




(47,376)









(8,019,071)




(5,145,814)















Cash flows from investing activities













Intangible assets - website development costs







(20,956)




(16,762)









(20,956)




(16,762)


Cash flows from financing activities













Net proceeds from the issuance of shares and warrants



5




7,932,107




2,453,633


Net proceeds from the issuance of Series B Preferred Stock



5




-




6,540,821


Proceeds from the exercise of warrants



5




545,026




579,309


Series A preferred stock dividend



5




(8,356)




(8,356)






















8,468,777




9,565,407















Increase in cash and cash equivalents







428,750




4,402,831















Cash – beginning of year







6,157,264




1,754,433















Cash – end of year







6,586,014




6,157,264


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SOURCE DelMar Pharmaceuticals, Inc.