MONTREAL, May 15 /PRNewswire-FirstCall/ - LAB International Inc. (“LAB”), a drug development company focused on developing therapies for the inhalation and pain markets, today announced financial results for the first quarter of 2007 ended March 31, 2007.
As a result of a significant portion of LAB’s revenues, expenses, assets and liabilities being denominated in US dollars, it has adopted the US dollar as its functional and reporting currency effective January 1, 2007. LAB’s ongoing business operations are now distinctly different from its historical operating results because of the spin-off of its ‘Contract Research Business’ on August 3, 2006. Consequently, the comparison of continuing operating results is based on historical segmented results for the “Pharma” segment and no longer includes references to the Contract Research Business.
LAB’s results of operations for the first three months of 2007 include the operations of PharmaForm since the date of its acquisition on January 25, 2007. LAB’s consolidated net loss for the first quarter of 2007 was $8.1 million compared to $5, 3 million for the Pharma segment for the same 2006 period.
“The integration of PharmaForm is now successfully completed and we are already seeing the benefits from their formulation and development expertise. We are now in a much stronger position to realize the full value of our later stage and growing product pipeline. " said Dr Halvor Jaeger, Chief Executive Officer of LAB International.
Other First Quarter Financial Highlights - Total revenues for the first quarter of 2007 were $1.4 million, including $0.2 million in co-development fees and $1.2 million of contract services. - Consolidated net loss for the first quarter of 2007 was $8.1 million or ($0.10) per share. 2007 First Quarter Operational Highlights - LAB announced the closing of the PharmaForm acquisition for $7.5 million in cash and $4.4 million in LAB shares. - LAB announced the completion of patient enrollment for its pilot GHRH Phase IIa study. - LAB announced positive results from the open-label part of its Fentanyl TAIFUN(R) Phase IIb clinical trial. The results demonstrated successful dose titration resulting in effective control of breakthrough cancer pain episodes. Financial Results
The year-over-year increase in the net loss was due to a higher rate of spending on research and development activities and selling, general and administrative expenses.
Consolidated SG&A expenses totaled $2.4 million for the first quarter of 2007 compared to $1.8 million for the same 2006 period
R&D costs for the first quarter of 2007 were $5.0 million compared with $2.3 million in the first quarter of 2006 and include $1.3 million of rent and facility charges relating to the early termination of the leased premises in Finland. The increase in spending is primarily attributable to the costs associated with the advancement and finalization of the Fentanyl TAIFUN(R) Phase II trial program.
The consolidated net loss for the first quarter of 2007 was $8.1 million, or ($0.10) per share, compared with a consolidated net loss for the first quarter of 2006 for the Pharma segment of $5.3 million
The Company had cash and cash equivalents as of March 31, 2007 of $19.7 million. This compares with $35.3 million as of December 31, 2006 and $9.8 million as of March 31, 2006.
About LAB International
LAB International is an integrated drug development company focused on the growing multi-billion dollar inhalation market. Its lead product, for the treatment of breakthrough cancer pain, is a fast-acting Fentanyl formulation delivered using the Company’s TAIFUN(R) dry powder inhaler platform. Its pipeline also includes therapeutics for asthma, COPD, and growth hormone deficiencies.
LAB’s common shares trade on The Toronto Stock Exchange (“TSX”) under the symbol “LAB”, on the Frankfurt Regulated Unofficial Market under the symbol “LD9.F” and on XETRA under the symbol “LD9.DE” with 82.3 million shares outstanding.
THIS NEWS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT REFLECT THE CURRENT VIEWS AND/OR EXPECTATIONS OF LAB INTERNATIONAL INC. WITH RESPECT TO ITS PERFORMANCE, BUSINESS AND FUTURE EVENTS. SUCH STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS. ACTUAL RESULTS AND EVENTS MAY VARY SIGNIFICANTLY.
LAB INTERNATIONAL INC. Consolidated Balance Sheets (Unaudited) March 31, 2007 and December 31, 2006 (in thousands of U.S. dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- March 31, December 31, 2007 2006 ------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 19,658 $ 35,304 Accounts receivable 2,584 1,347 Prepaid expenses 1,220 712 ------------------------------------------------------------------------- 23,462 37,363 Property and equipment 3,185 397 Intangible assets 15,542 8,015 Goodwill 2,302 - Other assets (note 6) 471 828 ------------------------------------------------------------------------- $ 44,962 $ 46,603 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders’ Equity Current liabilities: Accounts payable and accrued liabilities 5,141 4,886 Deferred revenue 1,772 1,606 Current portion of long-term debt (note 7) 2,306 1,456 Future income taxes 161 159 ------------------------------------------------------------------------- 9,380 8,107 Deferred revenue 156 - Long-term debt (note 7) 4,339 4,248 Future income taxes 971 1,045 Shareholders’ equity: Share capital (note 8) 54,190 49,758 Warrants (note 8) 364 366 Additional paid-in capital 6,401 6,281 Accumulated other comprehensive income 3,928 3,458 Deficit (34,767) (26,660) ------------------------------------------------------------------------- 30,116 33,203 Commitments (note 14) ------------------------------------------------------------------------- $ 44,962 $ 46,603 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to unaudited consolidated financial statements. LAB INTERNATIONAL INC. Consolidated Statements of Operations (Unaudited) Three-month periods ended March 31, 2007 and 2006 (in thousands of U.S. dollars except share and per share amounts) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended March 31, ------------------------ 2007 2006 ------------------------------------------------------------------------- Revenues $ 1,374 $ 9,715 Expenses: Direct costs 793 5,745 Selling, general and administrative 2,436 3,652 Research and development 5,043 2,337 Stock-based compensation (note 10) 118 195 Amortization of property and equipment 164 686 Amortization of intangible assets 534 340 Interest on long-term debt and loss on settlement of convertible debenture 47 621 Foreign exchange 413 320 ------------------------------------------------------------------------- 9,548 13,896 ------------------------------------------------------------------------- Loss before income taxes (8,174) (4,181) Recovery of (provision for) income taxes: Current (19) (334) Future 86 150 ------------------------------------------------------------------------- 67 (184) ------------------------------------------------------------------------- Net loss $ (8,107) $ (4,365) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net loss per share Basic $ (0.10) $ (0.06) Diluted (0.10) (0.06) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of shares outstanding: Basic 81,102,517 70,100,391 Effect of convertible debentures - 4,840,441 Effect of dilutive options and warrants - 1,469,956 ------------------------------------------------------------------------- Diluted 81,102,517 76,410,788 ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to unaudited consolidated financial statements. LAB INTERNATIONAL INC. Consolidated Statements of Comprehensive Earnings (Unaudited) Three-month periods ended March 31, 2007 and 2006 (in thousands of U.S. dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended March 31, ------------------------ 2007 2006 ------------------------------------------------------------------------- Net loss $ (8,107) $ (4,365) Foreign currency translation adjustments 470 21 ------------------------------------------------------------------------- Comprehensive loss $ (7,637) $ (4,344) ------------------------------------------------------------------------- ------------------------------------------------------------------------- See accompanying notes to unaudited consolidated financial statement LAB INTERNATIONAL INC. Consolidated Statements of Cash Flows (Unaudited) Three-month periods ended March 31, 2007 and 2006 (in thousands of U.S.dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended March 31, ------------------------ 2007 2006 ------------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (8,107) $ (4,365) Adjustments for: Amortization of property and equipment 164 686 Amortization of intangible assets 534 340 Amortization of deferred financing fees - 30 Stock-based compensation 118 195 Services rendered in exchange of shares 53 - Loss on settlement of convertible debenture - 255 Accretion expense on convertible debenture - 269 Unrealized foreign exchange loss 553 254 Amortization of deferred gain on property - (20) Deferred rent liability - 46 Future income taxes (86) (150) Net changes in operating assets and liabilities (note 11 (a)) (193) (699) ------------------------------------------------------------------------- (6,964) (3,159) Cash flows from financing activities: Repayment of long-term debt (577) (605) Repayment of bank loan - (374) Repayment of convertible debenture - (507) Proceeds from issuance of long-term debt - 608 ------------------------------------------------------------------------- (577) (878) Cash flows from investing activities: Business acquisition, net of cash acquired (7,076) - Corporate transaction costs (764) - Acquisition of property and equipment (328) (656) Addition to intangible assets (31) (74) Other assets - (24) ------------------------------------------------------------------------- (8,199) (754) ------------------------------------------------------------------------- Net decrease in cash and cash equivalents (15,740) (4,791) Cash and cash equivalents, beginning of period 35,304 14,543 Effect of exchange rate changes 94 (83) ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 19,658 $ 9,669 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents are comprised of: Cash $ 19,658 $ 1,963 Money market fund - 7,706 ------------------------------------------------------------------------- $ 19,658 $ 9,669 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplemental cash flow disclosure (note 11 (a)) See accompanying notes to unaudited consolidated financial statements.
LAB INTERNATIONAL INC.
CONTACT: Frederic Dumais, Vice-President, Investor Relations, (514)315-3330 ext. 106, Fax: (514) 315-3325, dumaisf@labinc.ca, www.labinc.ca
