EDMONTON, May 15 /PRNewswire-FirstCall/ - Isotechnika Inc. announced today its financial results for the first quarter ended March 31, 2006 and provided a review of the Company’s operational and scientific progress in 2006.
Operational and Scientific Highlights ------------------------------------- - On January 4, 2006, Isotechnika enrolled its first patient in a North American Phase IIb kidney transplant trial for its lead immunosuppressive drug, ISA247. The trial is being performed at 34 centers across North America and is expected to include a total of 332 de novo (newly transplanted) kidney transplant patients. Patients will be placed into one of four separate treatment groups; three different dose groups of ISA247 (0.4 mg/kg, 0.6 mg/kg, and 0.8 mg/kg twice daily) compared with the fourth group, a tacrolimus (0.05 mg/kg twice daily) control arm. All patients will receive oral treatment of drug (ISA247 or tacrolimus) over a six month period along with other standard immunosuppressive therapies used following transplantation. Isotechnika’s goal is to have enrolment completed by the end of 2006. - Isotechnika strengthened its Board of Directors with the appointments of Mary C. Ritchie, F.C.A. and Franklin Berger on January 4, 2006 and February 22, 2006, respectively. In keeping with good corporate governance, Dr. Randall Yatscoff resigned his position on the Board of Directors on February 24, 2006. Dr. Launa Aspeslet assumed the position of Chief Operating Officer on January 6, 2006. - Isotechnika was issued U.S. Patent No. 6,998,385 for its lead immunosuppressive drug, ISA247 on February 14, 2006. The patent entitled “CYCLOSPORINE ANALOGUE MIXTURES AND THEIR USE AS IMMUNOMODULATING AGENTS” is the first patent to be issued in this patent family in a jurisdiction that has substantive prosecution. This patent claim has been filed in a total of 36 countries. Three patents relating to this claim were previously issued in the following countries; Morocco (No. 26337 issued October 1, 2004); Pakistan (No. 138338 issued September 30, 2004) and South Africa (No. 2004/2270 issued May 25, 2005). - On March 20, 2006, Isotechnika released preliminary 48 week clinical data obtained from its Canadian Phase III psoriasis and extension trials for ISA247. Patients completing the 24 week Canadian Phase III SPIRIT trial were given the opportunity to continue therapy for an additional 36 weeks or to discontinue therapy. Those patients who chose to enroll in the extension trial were moved from the 0.2 mg/kg bid (low dose) or 0.4 mg/kg bid (high dose) groups into the 0.3 mg/kg bid (mid dose) group. Patients who commenced the SPIRIT trial in the 0.3 mg/kg bid dose group remained on the same dosage regimen for the duration of the extension trial. The goal of the extension trial is to demonstrate continued therapeutic benefit to psoriasis patients while gathering long term safety data. To date, data has been received on 193 patients receiving treatment for a total of 48 weeks. Patients previously in the low dose group experienced an improvement in mean percent decrease in PASI scores from baseline of 41% to 64% after an additional 24 weeks on the mid dose. Patients previously in the mid and high dose group remained stable with mean percent decrease from baseline PASI scores of 61% and 66%, respectively after a total of 48 weeks of treatment. Of the total patient population, 95.6% showed no clinically significant change in kidney function. There have been no clinically significant changes noted during the extension trial in any of the other safety parameters monitored including cholesterol, triglycerides, new onset diabetes and infectious complications. - Isotechnika signed an option agreement with Cellgate Inc. of Redwood City, California on April 25, 2006. This agreement allows Isotechnika the option to obtain an exclusive license to develop and commercialize conjugates consisting of Cellgate’s patented transporter technology for the topical delivery of ISA247 in patients suffering from mild to moderate psoriasis. Under the terms of the agreement, Cellgate Inc. will perform studies to evaluate the feasibility of using their technology to topically deliver ISA247. These studies will commence over the next few months and are expected to be completed over a one year period. In exchange for this work, Isotechnika will pay Cellgate Inc. a total of $500,000USD with $100,000USD paid upfront and the remainder at predetermined time points. Upon successful completion of the studies, Isotechnika has the option to license the technology from Cellgate Inc. to further develop and commercialize conjugates for topical delivery of ISA247. Financial results -----------------
At March 31, 2006 cash, cash equivalents and short-term investments totalled $44.9 million, compared to $52.8 million at December 31, 2005. The Company used $7.5 million of cash, cash equivalents and short-term investments in the first quarter of 2006, for operating activities.
The consolidated loss for the first quarter of 2006 was $5.4 million, or $0.06 per common share, compared to a loss of $8.4 million, or $0.11 per common share in the first quarter of 2005.
Revenues increased to $1.6 million for the three months ended March 31, 2006 compared to $384,000 for the three months ended March 31, 2005. Revenues in the first quarter of 2006 were comprised of $1.3 million for licensing fees and $336,000 for diagnostic product sales, as compared to $nil for licensing fees and $384,000 for diagnostic product sales for the first quarter of 2005.
Research and development costs totalled $5.0 million in the first quarter of 2006, compared to $5.8 million in the first quarter of 2005 a decrease of $790,000. Research and development costs for the first quarter of 2006 included clinical trial costs for the Canadian psoriasis extension trial, the Phase IIb kidney transplant trial, the TAFA93 Phase 1b multiple ascending dose trial, the Diatest(R) trial and non-clinical study costs for both the mouse and rat carcinogenicity studies. The decrease in research and development costs was primarily related to stock based compensation expense. The Company recorded stock compensation expense of $nil in the first quarter of 2006 compared to $470,000 for the same period in 2005.
Corporate, administration and marketing costs totalled $1.7 million for the first quarter of 2006, compared to $2.7 million for the first quarter of 2005, a decrease of $1.0 million. The decrease was primarily due to decreased stock-based compensation expense ($46,000 in the first quarter of 2006 compared to $767,000 in the first quarter of 2005) and decreased executive salaries with the departure of the executive vice president in November, 2005.
An expanded Management’s Discussion and Analysis for the quarter is accessible on Isotechnika’s Web site at www.isotechnika.com.
The interim financial statements and the Management’s Discussion and Analysis for the first quarter ended March 31, 2006 are accessible on Isotechnika’s Web site @ www.isotechnika.com or on SEDAR @ www.sedar.com.
About Isotechnika -----------------
Isotechnika Inc. is an international biopharmaceutical company headquartered in Edmonton, Alberta, Canada. Drawing upon its expertise in medicinal chemistry and immunology, the Company is focused on the discovery and development of novel immunosuppressive therapeutics that are safer than currently available treatments. Its entrepreneurial management and world-class team of scientists are building a pipeline of immunosuppressive drug candidates for treatment of autoimmune diseases and for use in the prevention of organ rejection in transplantation. Isotechnika looks to become the leader in development of immunosuppressant therapies.
Isotechnika’s lead compound, ISA247 is an immunosuppressant currently in an extension protocol of a Canadian Phase III human clinical trial for the treatment of moderate to severe psoriasis. In addition, ISA247 has successfully completed a Phase IIa trial for kidney transplantation. The Company also has an additional immunosuppressive compound in its drug pipeline, TAFA93 which is in Phase I.
Isotechnika Inc. is a publicly traded company on the Toronto Stock Exchange under the symbol ISA. More information on Isotechnika can be found at www.isotechnika.com.
Forward-Looking Statements
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This press release may contain forward-looking statements. Forward looking statements, including the Company’s belief as to the potential of its products, the Company’s expectations regarding the issuance of additional patents and the Company’s ability to protect its intellectual property, involve known and unknown risks and uncertainties, which could cause the Company’s actual results to differ materially from those in the forward looking statements. Such risks and uncertainties include, among others, the availability of funds and resources to pursue research and development projects, the ability to economically manufacture its products, the potential of its products, the success and timely completion of clinical studies and trials, the Company’s ability to successfully commercialize its products, the ability of the Company to defend its patents from infringement by third parties, and the risk that the Company’s patents may be subsequently shown to be invalid or infringe the patents of others. Investors should consult the Company’s quarterly and annual filings with the Canadian commissions for additional information on risks and uncertainties relating to the forward- looking statements. Investors are cautioned against placing undue reliance on forward-looking statements.
Isotechnika Inc. Consolidated Balance Sheets ------------------------------------------------------------------------- (expressed in thousands of Canadian dollars) March 31 2006 December 31 (Unaudited) 2005 $ $ Assets Current assets Cash and cash equivalents 17,120 19,402 Short-term investments 27,791 33,425 Accounts receivable 422 447 Inventories 323 312 Prepaid expenses and deposits 1,537 830 ------------------------------- 47,193 54,416 Property and equipment 6,139 6,506 Patents 2,400 2,200 ------------------------------- 55,732 63,122 ------------------------------- ------------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 5,011 5,649 Deferred revenue 2,229 3,489 Current portion of long-term debt 1,949 1,887 Current portion of deferred lease inducements 61 61 ------------------------------- 9,250 11,086 Long-term debt 2,225 2,717 Deferred lease inducements 109 125 ------------------------------- 11,584 13,928 ------------------------------- Shareholders’ Equity Share capital Common stock Authorized Unlimited number of common shares without par value Issued and outstanding 84,248,492 (December 31,2005: 84,108,492) 158,190 157,812 Warrants 1,094 1,094 Contributed surplus 2,781 2,843 Deficit (117,917) (112,555) ------------------------------- 44,148 49,194 ------------------------------- 55,732 63,122 ------------------------------- ------------------------------- Isotechnika Inc. Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) ------------------------------------------------------------------------- (expressed in thousands of Canadian dollars, except numbers of shares and warrants) Common stock Warrants ----------------------- ----------------------- Number Amount Number Amount No. $ No. $ Balance - December 31, 2005 84,108,492 157,812 1,293,147 1,094 Exercise of stock options 140,000 378 - - Issue of stock options - - - - Net loss for the period - - - - ------------------------------------------------ Balance - March 31, 2006 84,248,492 158,190 1,293,147 1,094 ------------------------------------------------ ------------------------------------------------ Share- Contributed holders’ Surplus Deficit equity $ $ $ Balance - December 31, 2005 2,843 (112,555) 49,194 Exercise of stock options (108) - 270 Issue of stock options 46 - 46 Net loss for the period - (5,362) (5,362) ------------------------------------ Balance - March 31, 2006 2,781 (117,917) 44,148 ------------------------------------ ------------------------------------ Isotechnika Inc. Consolidated Statements of Operations (Unaudited) ------------------------------------------------------------------------- (expressed in thousands of Canadian dollars, except per share amounts) Three Months Ended March 31 March 31 2006 2005 $ $ Revenue Licensing revenue 1,260 - Product sales and contract analysis 336 384 ------------------------------- 1,596 384 ------------------------------- Expenses Research and development 4,988 5,797 Corporate, administration and marketing 1,711 2,706 Amortization of property and equipment 422 454 Product sales and contract analysis 163 273 Interest on long-term debt 95 123 Amortization of patent costs 8 12 Loss on disposal of property and equipment - 4 ------------------------------- 7,387 9,369 ------------------------------- Loss before the undernoted (5,791) (8,985) ------------------------------- Other income (expense) Investment income 446 404 Foreign exchange translation gain (loss) (17) 153 ------------------------------- 429 557 ------------------------------- Net loss for the period (5,362) (8,428) ------------------------------- ------------------------------- Basic and diluted loss per share (0.06) (0.11) ------------------------------- ------------------------------- Isotechnika Inc. Consolidated Statements of Cash Flows (Unaudited) ------------------------------------------------------------------------- (expressed in thousands of Canadian dollars) Three months ended March 31 March 31 2006 2005 $ $ Cash provided by (used in) Operating activities Net loss for the period (5,362) (8,428) Items not affecting cash Amortization of deferred revenue (1,260) - Amortization of property and equipment 422 454 Amortization of patent costs 8 12 Loss on disposal of property and equipment - 4 Amortization of deferred lease inducements (16) (23) Stock-based compensation 46 1,237 Unrealized foreign exchange translation loss related to non-operating activities (21) (67) ------------------------------- (6,183) (6,811) Net change in other operating assets and liabilities (1,331) (1,440) ------------------------------- (7,514) (8,251) ------------------------------- Investing activities Decrease in short-term investments 5,668 5,234 Purchase of equipment (58) (67) Proceeds on sale of equipment 3 486 Patent costs (208) (45) ------------------------------- 5,405 5,608 ------------------------------- Financing activities Repayment of long-term debt (447) (421) Issuance of share capital 270 - ------------------------------- (177) (421) ------------------------------- Effect of foreign exchange rate fluctuations on cash and cash equivalents 4 26 ------------------------------- Decrease in cash and cash equivalents (2,282) (3,038) Cash and cash equivalents - Beginning of period 19,402 17,889 ------------------------------- Cash and cash equivalents - End of period 17,120 14,851 ------------------------------- ------------------------------- Cash and cash equivalents are comprised of: Cash on deposit 3,204 5,130 Money market securities and investment deposits 13,916 9,721 ------------------------------- 17,120 14,851 ------------------------------- -------------------------------
Isotechnika Inc.
CONTACT: Dr. Randall Yatscoff, President & CEO, Isotechnika Inc., (780)487-1600 (246); (780) 484-4105 (fax), ryatscoff@isotechnika.com; DennisBourgeault, Chief Financial Officer, Isotechnika Inc., (780) 487-1600(226); (780) 484-4105 (fax), dbourgeault@isotechnika.com; Archived imageson this organization are searchable through CNW Photo Archive website athttp://photos.newswire.ca. Images are free to accredited members of themedia. To request a free copy of this organization’s annual report, pleasego to http://www.newswire.ca and click on Tools for Investors.
