VANCOUVER, March 29 /PRNewswire-FirstCall/ - Chemokine Therapeutics Corp. (the Company) , a biotechnology company developing peptide-based therapies to treat cancer, blood disorders, cardiovascular and infectious disease, today announced the financial and operating results of the year ended December 31, 2005.
Chemokine Therapeutics achieved a number of important milestones in its first year operating as a public company including:
- Release of results of phase I clinical trials for the Company’s immune booster drug CTCE-0214 in healthy volunteers: the Company confirmed that the safety profile and efficacy results from the phase I trial of CTCE-0214 warrant continued development; - Granting of orphan-drug designation assigned to CTCE-9908 for the treatment of osteogenic sarcoma. With orphan-drug designation, the Company may benefit from the availability of additional regulatory and clinical resources in the development of CTCE-9908; - Expansion of intellectual property with the granting of two U.S. patents relating to therapeutic composition and methods of use of the Company’s anti-cancer compound, CTCE-9908, in the treatment of cancer and inhibition of angiogenesis; - Expansion of trading markets through the Over-The-Counter Bulletin Board (OTCBB) for the Company’s common shares, intended to facilitate trading and liquidity in the US market. - Strengthening of the Company’s Scientific and Clinical Advisory boards with the addition of Dr. Shahin Rafii, a world-renowned stem cell researcher from Cornell University Medical College, New York; - Initiation of a three stage phase I clinical study for CTCE-0214 to enable the Company to evaluate the safety, pharmacodynamics, and pharmacokinetic profile of CTCE-0214 as a single dose and a multi-dose, and in combination with granulocyte colony stimulating factor (G-CSF); - Completion of pre-clinical toxicology studies, regulatory filings and compound manufacturing required to commence a phase Ib/II clinical trial.
“2005 was a significant year for our Company” said Dr. Hassan Salari, President and CEO of Chemokine Therapeutics. “We completed our second clinical trial and demonstrated that our compound CTCE-0214 had biological activity in humans. In addition, we continued to make progress with our research and development efforts by identifying promising new therapeutic applications based on chemokine biology and by building a number of world class research collaborations. We look forward to the results of two clinical trials underway for our two lead compounds, CTCE-9908 and CTCE-0214 expected later this year.”
Financial Results - Audited
(All amounts in U.S. dollars and in accordance with U.S. GAAP unless otherwise specified)
We incurred a net loss of $6,020,166 ($0.19 per share) during the twelve months ended December 31, 2005 compared to a net loss of $3,095,240 ($0.26 per share) during the same period in 2004. The increase in our net loss was principally due to the increase in research and development expenses and general and administrative expenses as described below.
Research and development expenses were $3,697,005 during the twelve months ended December 31, 2005, compared to $1,786,427 recorded for the twelve months ended December 31, 2004. Research and development expenses in the current year were primarily attributable to preclinical and clinical studies and manufacturing of our two lead compounds CTCE-9908 and CTCE-0214 for clinical trials. Other research expenses included research staff salaries and the costs of regulatory filings.
General and administrative expenses were $2,667,290 for the twelve months ended December 31, 2005, compared to $1,284,501 in the prior year. The increase reflects higher professional fees for accounting and legal services and additional salary costs for employees we hired to assist us in managing the growth of our company as well as with the compliance as a publicly reporting company under Canadian and U.S. securities laws. Other general and administrative expenses included patent costs, consulting, marketing and promotion expenses incurred for investor relations and business development.
A higher market share price at the end of the year compared to the market share price at the beginning of the year resulted in a non-cash expense of $289,533 for stock-based compensation recorded under variable accounting. The stock options that this expense applies to are stock options that were granted in 2004. The comparative stock-based compensation expense recorded for the twelve months ended December 31, 2004 was $51,581.
We realized other income of $231,654 for the twelve months ended December 31, 2005, compared to $12,692 for the twelve months ended December 31, 2004. Other income consisted primarily of interest earned on cash balances and investments which benefited from increasing interest rates throughout the 2005 year.
As of December 31, 2005, we had funds available of $6,346,923. For the twelve months ended December 31, 2005, we used net cash of $6,435,948 in operating activities consisting primarily of the net loss for the period of $6,020,166. Other uses of cash were a $359,968 decrease in accounts payable and accrued liabilities offset by a $289,533 non-cash stock-based compensation charge. Financing activities during the twelve months ended December 31, 2005, were $1,690,240 comprised primarily of gross proceeds of $2,023,872 from the exercise of the greenshoe option of our initial public offering, offset by $213,682 in offering costs. Subsequent to the quarter, on March 22, 2006 the Company entered into a private placement and issued a total of 6,471,698 common shares for gross proceeds of $5,882,857 (Cdn$6,860,000) and net proceeds after commissions of $5,587,428 (Cdn$6,515,500).
About Chemokine Therapeutics Corp.
Chemokine Therapeutics is a product-focused biotechnology company developing drugs that harness the therapeutic potential of stem cells through chemokine pathways. Chemokines are a class of proteins which signal biological responses from stem cells that play a critical role in the growth, differentiation and maturation of cells necessary for fighting infection, as well as tissue repair and regeneration. Stem cells are the master primitive cells that give rise to all of the cells and organs in the body. Chemokines are one of the major mediators of stem cell activity including stem cell growth, differentiation and maturation. Chemokine Therapeutics is a leader in research in this field. The Company has five product candidates with two lead product candidates in clinical trials; CTCE-0214, for enhancing the immune system, and CTCE-9908, to prevent the spread of cancer and its continued growth.
Safe Harbor Statement under the U. S. Private Securities Litigation Reform Act of 1995: Statements in this document regarding managements’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “intends”, “will”, “should”, “expects”, “projects”, and similar expressions are intended to identify forward-looking statements. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances, or events to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, those associated with the success of research and development programs, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of the Company’s products, the availability of government and insurance reimbursements for the Company’s products, the strength of intellectual property, financing capability, the potential dilutive effects of any financing, reliance on subcontractors and key personnel and other risks detailed from time-to-time in the Company’s public disclosure documents and other filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities. Forward-looking statements are made as of the date hereof, and the Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Financial Tables Follow: Chemokine Therapeutics Corp. (A Development Stage Company) CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollars) December 31, December 31, 2005 2004 -------------- -------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,719,163 $ 11,436,478 Investments 2,627,760 - Amounts receivable 33,214 5,560 Prepaid expense and deposits 154,969 57,898 -------------- -------------- TOTAL CURRENT ASSETS 6,535,106 11,499,936 PROPERTY AND EQUIPMENT 351,438 19,625 LICENSE 23,993 31,687 DUE FROM AFFILIATES 91,783 - -------------- -------------- $ 7,002,320 $ 11,551,248 -------------- -------------- -------------- -------------- LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 253,199 $ 613,167 Deferred revenue - 275,000 Due to affiliates - 26,322 Current portion of capital lease obligation due within one year 11,648 - -------------- -------------- TOTAL CURRENT LIABILITIES 264,847 914,489 CAPITAL LEASE OBLIGATION 21,157 - -------------- -------------- 286,004 914,489 -------------- -------------- STOCKHOLDERS’ EQUITY PREFERRED STOCK Authorized - 6,000,000 voting, participating shares; par value $ 0.001 per share Issued and outstanding: December 31, 2005 - 2,000,000; December 31, 2004 - 2,000,000 2,000 2,000 COMMON STOCK Authorized - 100,000,000 voting, participating shares; par value $ 0.001 per share Issued and outstanding: December 31, 2005 - 31,897,206; December 31, 2004 - 29,343,206 31,897 29,343 ADDITIONAL PAID-IN CAPITAL 23,717,965 21,620,796 (DEFICIT) ACCUMULATED DURING THE DEVELOPMENT STAGE (17,035,546) (11,015,380) -------------- -------------- 6,716,316 10,636,759 -------------- -------------- $ 7,002,320 $ 11,551,248 -------------- -------------- -------------- -------------- Chemokine Therapeutics Corp. (A Development Stage Company) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. dollars) Years ended December 31, ----------------------------- 2005 2004 -------------- -------------- REVENUE $ 275,000 $ - -------------- -------------- EXPENSES Research and development 3,697,005 1,786,427 General and administrative 2,667,290 1,284,501 Stock-based compensation 289,533 51,581 Amortization of license 7,694 8,662 Depreciation of property and equipment 46,684 10,135 Foreign exchange gain (181,386) (33,374) -------------- -------------- 6,526,820 3,107,932 -------------- -------------- OTHER INCOME 231,654 12,692 -------------- -------------- NET (LOSS) $ (6,020,166) $ (3,095,240) -------------- -------------- -------------- -------------- NET (LOSS) PER COMMON SHARE - FOR THE PERIOD - BASIC AND DILUTED $ (0.19) $ (0.26) -------------- -------------- -------------- -------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 31,605,162 12,059,677 -------------- -------------- -------------- -------------- For further information contact: Chemokine Therapeutics Corp. ---------------------------- David Karp Chief Financial Officer Phone: (604) 822-3347 E-mail: dkarp@chemokine.net Frederica Bell Director of Investor Relations Phone: (604) 827-3131 E-mail: fbell@chemokine.net Internet: www.chemokine.net
Chemokine Therapeutics Corp.
CONTACT: Chemokine Therapeutics Corp., David Karp, Chief FinancialOfficer, Phone: (604) 822-3347, E-mail: dkarp@chemokine.net; FredericaBell, Director of Investor Relations, Phone: (604) 827-3131, E-mail:fbell@chemokine.net, Internet: www.chemokine.net
