Portage Biotech Announces Financial Results and Provides Business Update for Third Quarter of 2022 Fiscal Year

WESTPORT, Conn., Feb. 24, 2022 (GLOBE NEWSWIRE) -- Portage Biotech Inc. (NASDAQ: PRTG) (“Portage” or the “Company”), a clinical-stage immuno-oncology company developing therapies to improve patient lives and increase survival by avoiding and overcoming cancer treatment resistance, today announced financial results for the quarter ended December 31, 2021 (the “third quarter”).

“During the third quarter and in recent weeks we’ve taken steps to accelerate our lead programs for PORT-2 and PORT-3, investigating options to expand our clinical sites beyond our current footprint and finding the means of accelerating patient enrollment,” said Dr. Ian Walters, chief executive officer of Portage. “With our enhanced management team, efficient organization, and financial resources obtained in 2021, we are well positioned to execute our unique drug development strategy to deliver on important clinical milestones over the next two years.”

Business Update

  • Enhanced the management team with the appointments of Brian Wiley as Chief Business Officer, Joseph Ciavarella as Chief Accounting Officer; expanded the Board of Directors with the addition of Jim Mellon, Linda Kozick, and Mark Simon.
  • Enrollment continues in the Company’s IMP-MEL randomized Phase 1/2 study of PORT-2 and its PRECIOUS Phase 1 study of PORT-3 in patients with NY-ESO-1 expressing tumors.
  • The Company plans to issue a Research & Development update in March 2022 which will include preliminary safety data on its PORT-2 and PORT-3 programs as well as other details from its clinical development plan.
  • Presented at high-profile investor conferences:
    • Management participated in January 2022 investor conferences including the LifeSci Advisors Corporate Access Event, H.C. Wainwright BioConnect Conference, and the B. Riley Securities’ Oncology Investor Conference.
  • Hosted Key Opinion Webinar How iNKT Agonists Could Improve Immuno-Oncology Treatment with leading researchers from La Jolla Institute of Immunology and Imperial College London. Replay available here.

Third Quarter FY 2022 Financial Results

The Company generated a net loss and comprehensive loss of approximately $4.2 million in the three months ended December 31, 2021 (“Fiscal 2022 Quarter”), compared to a net loss and comprehensive loss of approximately $1.3 million in the three months ended December 31, 2020 (“Fiscal 2021 Quarter”), an increase in loss of $2.9 million year over year. Operating expenses, which include research and development and general and administrative expenses, were approximately $4.2 million in the Fiscal 2022 Quarter, compared to $0.9 million in the Fiscal 2021 Quarter, an increase of $3.3 million, which is discussed more fully below.

The Company’s other items of income and expense were substantially non-cash in nature and were approximately $0.1 million net income in the Fiscal 2022 Quarter, compared to approximately $0.5 million net loss in the Fiscal 2021 Quarter, a change in other items of income and expense of approximately $0.6 million, year over year. The primary reasons for the year over year difference in other items of income and expense was the change of $0.8 million in the fair value of the warrants issued with respect to the SalvaRx note settlement, which was partially offset by the year over year increase in the loss from an associate accounted for under the equity method of $0.1 million and the income on equity issued at a discount of $0.1 million in the Fiscal 2021 Quarter, representing the difference between the market price and the contractual exercise price, relating to the settlement of the SalvaRx notes and warrants.

Research & development ("R&D") costs increased by approximately $1.5 million, from approximately $0.4 million during the Fiscal 2021 Quarter, to approximately $1.9 million during the Fiscal 2022 Quarter. The increase was primarily attributable to non-cash share-based compensation expense associated with grants made under the 2021 Equity Incentive Plan of $1.0 million and salaries and bonuses of $0.7 million to directors and senior management. Additionally, the Fiscal 2021 Quarter was impacted by a general slow down in expenditures resulting from the pandemic.

General and administrative ("G&A") expenses increased by approximately $1.8 million, from approximately $0.4 million during the Fiscal 2021 Quarter, to approximately $2.2 million during the Fiscal 2022 Quarter. The principal reason for the increase in the Fiscal 2022 Quarter was the $1.1 million of non-cash share-based compensation expense associated with the Company’s 2021 Equity Incentive Plan, of which $0.7 million is associated with Directors’ compensation, and $0.4 million is associated with management compensation. No share-based compensation expense under the 2021 Equity Incentive Plan was incurred during the Fiscal 2021 Quarter. Additionally, the Company incurred an increase of $0.4 million in professional fees relating to initiatives associated with a corporate restructuring and public relations / business development. Finally, D&O insurance premiums increased $0.4 million in the current year period due to market rate increases in the cost of coverage.

Additionally, the Company reflected a net income tax expense of approximately $0.1 million in the Fiscal 2022 Quarter, compared to a net income tax benefit of approximately $0.1 million in the Fiscal 2021 Quarter. The Fiscal 2022 Quarter reflects the change in the foreign currency exchange rate on deferred tax liability settleable in British pounds sterling and the Fiscal 2021 Quarter reflected recoverable research and development tax credits generated in the U.K.

As of December 31, 2021, the Company had cash and cash equivalents of approximately $25.6 million and total current liabilities of approximately $0.6 million (inclusive of approximately $0.2 million warrant liability settleable on a non-cash basis). For the nine months ended December 31, 2021, the Company is reporting a net loss of approximately $10.3 million and cash used in operating activities of approximately $4.5 million. As of January 31, 2022, the Company had approximately $25.1 million of cash on hand to enable achieving important clinical milestones over the next two years.

About Portage Biotech Inc.
Portage is a clinical-stage immuno-oncology company advancing first-in-class therapies that target known checkpoint resistance pathways to improve long-term treatment response and quality of life in patients with evasive cancers. The Company’s access to next-generation technologies coupled with a deep understanding of biological mechanisms enables the identification of the most promising clinical therapies and product development strategies that accelerate these medicines through the translational pipeline. Portage’s portfolio consists of five diverse platforms, leveraging delivery by intratumorals, nanoparticles, liposomes, aptamers, and virus-like particles. Within these five platforms, Portage has 10 products currently in development with multiple clinical readouts expected over the next 12-24 months. For more information, please visit www.portagebiotech.com, follow us on Twitter at @PortageBiotech or find us on LinkedIn at Portage Biotech Inc.

Forward-Looking Statements

This news release contains statements about the Company’s information that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them as actual results may differ materially from the forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof, and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, except as required by law.

FOR MORE INFORMATION, PLEASE CONTACT:

Investor Relations        

Chuck Padala
chuck@lifesciadvisors.com

Media Relations
Gwen Schanker
gschanker@lifescicomms.com

-tables to follow-


PORTAGE BIOTECH INC.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(U.S. Dollars in thousands, except per share amounts)

    Three months ended
December 31,
    Nine months ended
December 31,
 
    2021     2020     2021     2020  
    In 000’$     In 000’$     In 000’$     In 000’$  
Expenses                        
Research and development   $ 1,928     $ 414     $ 4,804     $ 1,658  
General and administrative expenses     2,241       452       6,288       1,349  
Loss from operations     (4,169 )     (866 )     (11,092 )     (3,007 )
Change in fair value of warrant liability     342       (500 )     726       (441 )
Share of (loss) income in associate accounted for using equity method     (261 )     (121 )     (363 )     270  
Income (loss) on equity issued at a discount           77             (1,256 )
Gain on sale of marketable equity securities                       72  
(Loss) on extinguishment of notes payable                       (223 )
Foreign exchange transaction (loss)           (2 )           (2 )
Interest (expense)     (1 )     (3     (42 )     (172 )
Loss before provision for income taxes     (4,089 )     (1,415 )     (10,771 )     (4,759 )
Income tax (expense) benefit     (117 )     65       465       65  
Net (loss)     (4,206 )     (1,350 )     (10,306 )     (4,694 )
Other comprehensive income (loss)                                
Unrealized (loss) on investment                        
Total comprehensive (loss) for period   $ (4,206 )   $ (1,350 )   $ (10,306 )   $ (4,694 )
Net (loss) income attributable to:                                
Owners of the Company   $ (3,512 )   $ (1,184 )   $ (9,553 )   $ (4,335 )
Non-controlling interest     (694 )     (166 )     (753 )     (359 )
    $ (4,206 )   $ (1,350 )   $ (10,306 )   $ (4,694 )
Comprehensive (loss) attributable to:                                
Owners of the Company   $ (3,512 )   $ (1,184 )   $ (9,553 )   $ (4,335 )
Non-controlling interest     (694 )     (166 )     (753 )     (359 )
    $ (4,206 )   $ (1,350 )   $ (10,306 )   $ (4,694 )
(Loss) per share (Actual)                                
Basic and diluted   $ (0.26 )   $ (0.10 )   $ (0.74 )   $ (0.37 )
Weighted average shares outstanding                                
Basic and diluted     13,344       12,031       12,966       11,619  

PORTAGE BIOTECH INC.
Consolidated Statements of Financial Position
(U.S. Dollars in thousands)

As of,   December 31,
2021
    March 31,
2021
 
          (Audited)  
Assets            
Current assets            
Cash and cash equivalents   $ 25,603     $ 2,770  
Prepaid expenses and other receivables     672       2,176  
      26,275       4,946  
Long-term assets                
Long-term portion of other receivables           22  
Investment in associate     1,372       1,735  
Investments in private companies     7,409       7,409  
Goodwill     43,324       43,324  
In-process research and development     117,388       117,388  
Other assets     38       36  
Total assets   $ 195,806     $ 174,860  
                 
Liabilities and Equity                
Current liabilities                
Accounts payable and accrued liabilities   $ 477     $ 1,938  
Warrant liability     159       1,120  
Unsecured notes payable           150  
      636       3,208  
Non-current liabilities                
Deferred tax liability     23,606       24,050  
      23,606       24,050  
Total liabilities     24,242       27,258  
Shareholders’ Equity                
Capital stock     158,294       130,649  
Stock option reserve     14,225       7,977  
Accumulated other comprehensive income     958       958  
Accumulated deficit     (47,688 )     (38,135 )
Total equity attributable to owners of the Company     125,789       101,449  
Non-controlling interest     45,775       46,153  
Total equity     171,564       147,602  
Total liabilities and equity   $ 195,806     $ 174,860  
Commitments and Contingent Liabilities (Note 17)                


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