EDMONTON, Alberta, Nov. 14, 2012 (GLOBE NEWSWIRE) -- Isotechnika Pharma Inc. (TSX:ISA) today announced financial results for the third quarter ended September 30, 2012.
The Company's financial and administration resources in the third quarter ended September 30, 2012, were focused primarily on financing and licensing activities and on preparing for the ILJIN arbitration hearing which was held subsequent to September 30, 2012. The Company terminated the Development, Distribution and License Agreement ("DDLA") with ILJIN Life Science Co., Ltd. ("ILJIN") on January 30, 2012. As a result of ILJIN submitting a request for arbitration to the International Chamber of Commerce ("ICC") Court of Arbitration, the Company is currently engaged in arbitration proceedings under the ICC Rules of Arbitration. The ICC decision regarding the Company's right to terminate the DDLA is expected shortly.
Subsequent to September 30, 2012, the Company has closed the first two tranches of an $850,000 non-brokered private placement, raising proceeds of $758,000 by the issuance of 18.9 million units at a price of 4 cents per unit. Each unit consists of one common share and one non-transferable common share purchase warrant exercisable at 5 cents for a period of two years from the closing dates. No commissions or finder's fees were paid.
The Company's research and development efforts for the three and nine months ended September 30, 2012 have been primarily focused on the required planning and pre-dosing activities, including securing drug supply, for the voclosporin Phase 3 clinical trial for kidney transplant and conducting research activities for the NICAM program. This level of research and development activity has been reduced to the extent possible to conserve the Company's financial resources until additional sources of funding can be obtained to advance these programs.
On November 6, 2012 the Company announced positive results from the first round of screening of its portfolio of cyclophilin antagonist molecules ("NICAMs") through the contract testing laboratories of the National Institute of Allergy and Infectious Disease ("NIAID"), part of the U.S. National Institutes of Health ("NIH").
Several NICAM compounds have been found to be highly active in primary in vitro assays against a number of important viruses including Hepatitis C virus, Human Papillomavirus, Human Cytomegalovirus and Varicella-Zoster virus (causative agent of shingles). Some of the compounds are currently undergoing secondary level in vitro testing, through NIAID's contract testing laboratories, towards selection of lead drug candidates for preclinical development.
On July 9, 2012 the Company announced that Lux Biosciences Inc. ("Lux") completed patient enrollment in its Phase 3 clinical trial using voclosporin (branded as Luveniq™ by Lux) for the treatment of non-infectious uveitis, a leading cause of vision loss and long-term disability. Lux anticipates that data from the Phase 3 trial will be available in the first quarter of 2013.
Lux anticipates that the results from this trial, if positive, will address the FDA's request for additional clinical information as part of the Complete Response Letter regarding the NDA. The NDA re-submission will also receive priority review by the FDA. Lux additionally expects the trial results, if positive, to support a regulatory filing to the EMA for Luveniq™.
The Company reported a consolidated net loss of $1.7 million or $0.01 per common share for the three months ended September 30, 2012, as compared to consolidated net income of $2.2 million or $0.01 per common share for the same period in 2011. For the nine months ended September 30, 2012, the consolidated net loss was $4.5 million or $0.03 per common share compared to a consolidated net income of $4.1 million or $0.02 per common share for the comparable period in 2011.
The net income for three months ended September 30, 2011 included an unrealized non-cash gain of $3.1 million on a derivative financial instrument resulting from the DDLA with ILJIN. There was no similar item for the same period in 2012 as a result of the termination of the DDLA.
Revenue decreased to $86,000 for the third quarter of 2012, compared to $555,000 for the same period in 2011.
The Company recorded revenue of $5.9 million for the nine months ended September 30, 2012, as compared to $838,000 for the same period in 2011. The increase in revenue was primarily the result of recording license revenue of $4.4 million upon termination of the DDLA with ILJIN and recording $1.3 million of other revenue on the completion of a sale agreement with its partner, Lux Biosciences, Inc. for previously manufactured Active Pharmaceutical Ingredient in the first three months of 2012.
Research and development expenditures decreased to $554,000 in the third quarter of 2012, compared to $771,000 in the third quarter of 2011. The Company incurred net research and development expenditures of $2.2 million for the nine months ended September 30, 2012, as compared to $2.6 million for the same period in 2011. The decrease reflects reduced activity due to the Company's current limited financial resources.
Corporate and administration increased to $974,000 for the third quarter of 2012, compared to $682,000 for the third quarter of 2011. The Company incurred corporate and administration expenditures of $2.9 million for the nine months ended September 30, 2012, as compared with $2 million for the same period in fiscal 2011. Corporate and administration expenses increased primarily due to higher professional fees. The Company has incurred these higher fees due to the legal fees and arbitration costs related to the termination of the DDLA with ILJIN and the resulting arbitral process, and consulting services related to strategic alternatives.
Other expense (income) reflected a loss of $38,000 for the third quarter ended September 30, 2012 compared with income of $3.4 million for the same period in 2011. The 2011 comparative figure included an unrealized non-cash gain of $3.1 million on the ILJIN derivative financial instrument.
Other expense (income) reflected a loss of $4.7 million for the nine months ended September 30, 2012 compared to income of $8.7 million for the same period in 2011. Other expense for the nine months ended September 30, 2012 included a non-cash loss of $4.2 million on the ILJIN derivative financial instrument compared to a gain of $8.8 million on this instrument for the nine months ended September 30, 2011.
The Company continues to seek additional funding from all strategic alternatives to meet its working capital and development requirements.
For further discussion of the Company's financial results for the three and nine month periods ended September 30, 2012, the unaudited interim condensed consolidated financial statements and the Management's Discussion and Analysis for the third quarter ended September 30, 2012 are accessible on the Company's website at www.isotechnika.com or at www.sedar.com.
We seek Safe Harbour.
Isotechnika Pharma Inc.
Interim Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (unaudited)
(in thousands of Canadian dollars, except per share amounts)
|Three months ended||Nine months ended|
| September |
| September |
| September |
| September |
|Research and development revenue||28||28||83||104|
|Research and development||554||771||2,173||2,632|
|Corporate and administration||974||682||2,951||2,047|
|Amortization of property and equipment||147||176||442||538|
|Amortization of intangible assets||66||64||198||181|
|Other expense (income)||38||(3,392)||4,672||(8,672)|
|Net income (loss) for the period||(1,702)||2,242||(4,499)||4,072|
|Comprehensive income (loss) for the period||(1,702)||2,242||(4,499)||4,072|
|Earnings (loss) per share|
|Basic and diluted net income (loss) per common share||(0.01)||0.01||(0.03)||0.02|