VANCOUVER, April 16 /PRNewswire-FirstCall/ - Chemokine Therapeutics Corp. (the “Company”) , a biotechnology company developing chemokine-based therapies to treat cancer, blood disorders, and vascular diseases, today announced highlights and the financial and operating results of the year ended December 31, 2006.
2006 Highlights: - Commencement and continued enrollment of subjects to the Phase Ib/II clinical study of CTCE-9908 to assess the safety and signs of efficacy of CTCE-9908 after repeated administration in late stage cancer patients. - Collaborations with several prestigious academic institutions to study the benefits of CTCE-9908 in brain and breast cancers and to study the potential of CTCE-0214 to accelerate the repopulation of stem cells in the bone marrow from human umbilical cord blood. - Encouraging results from the Phase Ib clinical trial program for CTCE-0214 in stem cell and white blood cell mobilization. - Demonstration that CTCE-0324 enhances the survival of endothelial cells (essential components of existing blood vessels), stimulates the organization of endothelial cells into coordinated tube-like structures and induces new blood vessel type structures to sprout from pre-existing vessels using cell culture systems. - Issuance of US Patent “Chemokine Analogs for the Treatment of Human Disease”. The patent covers Chemokine analogs that are useful for the treatment of a variety of diseases and disorder including cancer, autoimmune diseases, and inflammation. The Company currently has a portfolio of 64 patents and patent applications that the Company either owns or has licensed around its key products and technologies. - Strengthening of the Company’s management team with the appointment of Dr. Guy Ely to serve as Chief Medical Officer and Mr. Bashir Jaffer to serve as Chief Financial Officer. - Closing of a CDN$6.9 million private placement which provided further capital to fund the Company’s pre-clinical and clinical development. Subsequent events - Positive preliminary data and the successful completion of the dose-escalation portion of the Phase Ib/II clinical trial for CTCE-9908, the Company’s anti-cancer drug candidate. - The appointment of C. Richard Piazza as the new Chief Executive Officer. Financial Results - Audited (All amounts in U.S. dollars and in accordance with U.S. GAAP unless otherwise specified)
The Company incurred a net loss of $7,507,866 ($0.19 per share) compared to $6,020,166 ($0.19 per share) during the twelve months ended December 31, 2006 and 2005, respectively. The increase in our net loss was principally caused by the increase in research and development expenditures as well as general and administrative expenses as described below.
The Company had no revenues in the twelve months ended December 31, 2006, compared to $275,000 for the twelve months ended December 31, 2005. In fiscal 2005, we recorded revenues of $275,000 from a research collaboration with Proctor & Gamble involving an evaluation of our compounds for cardiovascular applications. The decrease in revenues was due to the one-time nature of the $275,000 payment from Proctor & Gamble under our research collaboration.
Research and development expenses were $4,642,457 during the twelve months ended December 31, 2006, an increase of $945,452 from the $3,697,005 comparative amount recorded in the twelve months ended December 31, 2005. The increase in research and development expenses in fiscal 2006 was primarily attributable to the increased expenses associated with our two lead compounds, CTCE-0214 and CTCE-9908, and our continued efforts with our other early research activities. Research and development expenses include contract research, manufacturing, laboratory supplies, staff salaries and a $100,000 payment to Pharmaceutical Product Development Inc. (PPDI) to re-acquire the rights to our CTCE-0214 compound.
Direct costs for CTCE-0214 were approximately $1,735,000 for the twelve months ended December 31, 2006, compared to $1,874,000 for the twelve months ended December 31, 2005.
The Company recorded direct costs for CTCE-9908 of approximately $1,776,000 for the twelve months ended December 31, 2006, which included costs of preparatory and clinical trial costs for the Phase Ib/II clinical trial currently underway, and related manufacturing of compound. This compares to approximately $1,276,800 for the twelve months ended December 31, 2005.
Research and development expenses are expected to increase in the future as and when we incur costs for clinical trials. Completion dates and completion costs to bring a drug candidate to market vary significantly for each drug candidate given the nature of the clinical trials and the fact that more clinical trials may need to be conducted to advance a drug candidate based upon the results of each phase. In addition, we anticipate partnering with larger pharmaceutical companies to conduct and finance later stage clinical trials and therefore the timing of completion of the approval of a drug will likely not be within our control. Based on these factors we cannot reasonably estimate the completion dates and completion costs required to gain regulatory approval of our compounds for sale. Drug candidates are required to successfully complete Phase III clinical trials before gaining regulatory approval for sale which for our drug candidates is not expected to occur for several years.
General and administrative expenses for the twelve months ended December 31, 2006 were $2,904,595, compared to $2,667,290 for the twelve months ended December 31, 2005. The year over year increase of $237,305 reflects additional salary costs as a result of our adding personnel to support the continued growth in our research and development infrastructure. Other general and administrative expenses included consulting, marketing and promotion expenses incurred for business development.
Interest income was $331,190 for the twelve months ended December 31, 2006 compared with $231,654 for the twelve months ended December 31, 2005. Interest income was primarily interest earned on cash balances and investments which benefited from increasing interest rates.
As of December 31, 2006, we had approximately $6.1 million in cash and cash equivalents and short term investments on hand, compared to approximately $6.3 million as of December 31, 2005, a decrease of $0.2 million. Our working capital at December 31, 2006 was approximately $5.9 million, compared to approximately $6.3 million at December 31, 2005, a decrease of $0.4 million.
We believe that our current funds will be sufficient to fund our operations until January 31, 2008. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue one or more of our clinical trials or our operations.
About Chemokine Therapeutics Corp.
Chemokine Therapeutics is a product-focused biotechnology company developing drugs in the field of chemokines. Chemokines are a class of signaling proteins which play a critical role in the growth, differentiation and maturation of cells necessary for fighting infection as well as tissue repair and regeneration. Chemokines also have an important role in cancer metastasis and growth. Chemokine Therapeutics is a leader in research in the field of chemokines and has several products in various stages of development.
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.
Chemokine Therapeutics Corp. (A Development Stage Company) CONSOLIDATED BALANCE SHEETS December 31, ---------------------------- 2006 2005 ------------- ------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,446,668 $ 3,719,163 Short term investments 1,642,308 2,627,760 Amounts receivable 60,366 33,214 Prepaid expense and deposits 103,816 154,969 ------------- ------------- TOTAL CURRENT ASSETS 6,253,158 6,535,106 PROPERTY AND EQUIPMENT, net 332,440 351,438 LICENSE COSTS, net 16,299 23,993 AMOUNT DUE FROM AFFILIATE 253,263 91,783 ------------- ------------- $ 6,855,160 $ 7,002,320 ------------- ------------- ------------- ------------- LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 377,915 $ 253,199 Current portion of capital lease obligation 12,392 11,648 ------------- ------------- TOTAL CURRENT LIABILITIES 390,307 264,847 CAPITAL LEASE OBLIGATION 8,722 21,157 ------------- ------------- 399,029 286,004 ------------- ------------- COMMITMENTS STOCKHOLDERS’ EQUITY PREFERRED STOCK Authorized - 6,000,000 shares; par value $ 0.001 per share Issued and outstanding shares: December 31, 2006 - Nil; December 31, 2005 - 2,000,000 - 2,000 COMMON STOCK Authorized - 100,000,000 shares; par value $ 0.001 per share Issued and outstanding shares: December 31, 2006 - 42,183,748; December 31, 2005 - 31,897,206 42,184 31,897 ADDITIONAL PAID-IN CAPITAL 30,957,359 23,717,965 (DEFICIT) ACCUMULATED DURING THE DEVELOPMENT STAGE (24,543,412) (17,035,546) ------------- ------------- 6,456,131 6,716,316 ------------- ------------- $ 6,855,160 $ 7,002,320 ------------- ------------- ------------- ------------- See Edgar or Sedar for accompanying notes. Chemokine Therapeutics Corp. (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS Cumulative from inception on July 15, Years ended December 31, 1998 to ---------------------------- December 31, 2006 2005 2006 ------------- ------------- ------------- REVENUE $ - $ 275,000 $ 275,000 ------------- ------------- ------------- EXPENSES Research and development 4,642,457 3,697,005 14,595,725 General and administrative 2,904,595 2,667,290 10,253,596 Stock-based compensation 184,085 289,533 558,119 Amortization of license 7,694 7,694 34,304 Depreciation & amortization of property and equipment 173,350 46,684 346,091 ------------- ------------- ------------- 7,912,181 6,708,206 25,787,835 ------------- ------------- ------------- OTHER INCOME Foreign exchange gain 73,125 181,386 366,945 Interest income 331,190 231,654 602,478 ------------- ------------- ------------- NET LOSS $ (7,507,866) $ (6,020,166) $(24,543,412) ------------- ------------- ------------- ------------- ------------- ------------- NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ (0.19) $ (0.19) ------------- ------------- ------------- ------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 39,606,809 31,605,162 ------------- ------------- ------------- ------------- See Edgar or Sedar for accompanying notes Chemokine Therapeutics Corp. (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS Cumulative from inception on July 15, 1998 to Years ended December 31, December 31, 2006 2005 2006 ------------- ------------- ------------- CASH FLOW FROM OPERATING ACTIVITIES Net loss $ (7,507,866) $ (6,020,166) $(24,543,412) Adjustments to reconcile net cash provided (used) by operating activities Depreciation and amortization 181,044 54,378 380,395 Common stock issued for consulting services - - 1,033,669 Warrants issued for consulting services - - 404,842 Options issued for consulting services - - 87,968 Stock-based compensation 184,085 289,533 558,119 Decrease (increase) in Amounts receivable (27,152) (27,654) (60,366) Prepaid expense and deposit 51,153 (97,071) (103,816) Increase (decrease) in Accounts payable and accrued liabilities 124,716 (359,968) 377,915 Deferred revenue - (275,000) - ------------- ------------- ------------- Cash (used) by operating activities (6,994,020) (6,435,948) (21,864,686) ------------- ------------- ------------- CASH FLOW FROM FINANCING ACTIVITIES Stock issued for cash 7,489,823 2,023,872 31,647,476 Stock issued for settlement of debt - - 200,000 Offering costs (426,228) (213,682) (2,974,596) Net advances (to) from affiliate (161,480) (118,105) (206,445) Capital lease payment (11,691) (1,845) (13,536) ------------- ------------- ------------- Cash provided by financing activities 6,890,424 1,690,240 28,652,899 ------------- ------------- ------------- CASH FLOW FROM INVESTING ACTIVITIES Cash held by disposed subsidiary - - (4,754) Purchase of short term investments (10,185,725) (6,185,883) (16,371,608) Redemption of short term investments 11,171,178 3,558,123 14,729,301 Payment under license agreement - - (50,603) Purchase of property and equipment (154,352) (343,847) (643,881) ------------- ------------- ------------- Cash provided (used) by investing activities 831,101 (2,971,607) (2,341,545) ------------- ------------- ------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE PERIOD 727,505 (7,717,315) 4,446,668 CASH AND CASH EQUIVALENTS, beginning of period 3,719,163 11,436,478 - ------------- ------------- ------------- CASH AND CASH EQUIVALENTS, end of period $ 4,446,668 $ 3,719,163 $ 4,446,668 ------------- ------------- ------------- ------------- ------------- ------------- See Edgar or Sedar for accompanying notes.
Chemokine Therapeutics Corp.
CONTACT: Chemokine Therapeutics Corp., Mr. Don Evans, Director of PublicRelations, Phone: (604) 822-0305 or 1-888-822-0305, Fax: (604) 822-0302,E-mail: devans@chemokine.net, Internet: www.chemokine.net; Equicom Group,Joanna Longo, Investor Relations, Phone: (416) 815-0700 ext. 233, Fax:(416) 815-0080, E-mail: jlongo@equicomgroup.com
