MONTREAL, QUEBEC--(Marketwire - July 12, 2010) - Thallion Pharmaceuticals Inc. (TSX: TLN) today announced its operational and financial results for the three-month and six-month periods ended May 31, 2010.
Operational Highlights
-- Continued progress in preparation for the initiation this fall of a
Phase II trial in South America evaluating Shigamabs® as a treatment
for E. coli infections, in collaboration with LFB Biotechnologies (LFB),
Thallion's development and commercialization partner.
-- Entered into a binding lease cancellation agreement, subsequent to the
end of the quarter, with Liberty Sites Ltd., the landlord of its
corporate headquarters, to cancel the remaining six years of its
fifteen-year lease obligation, eliminating a remaining commitment of
approximately $8,000,000, for total consideration paid by Thallion of
$2,400,000.
-- The Board of Directors has approved the nomination of two new members,
Philippe Couillard, P.C., MD and Dan Chiche, MD, who joined the Board
effective July 12, 2010 and accepted the resignation of Michael Kurman,
MD who has served on the Board since December 2007.
-- Received notification from the Secretariat of the International Chamber
of Commerce International Court of Arbitration, subsequent to the end of
the quarter, that the Arbitral Tribunal considering the TLN-232 dispute
rendered a partial award in favor of the licensor and that the License
Agreement between the parties was duly terminated. As a result, the
Company closed the Phase II trial evaluating TLN-232 in metastatic
melanoma patients.
"We have made great progress in our preparations to initiate the Phase II Shigamabs® trial in South America later this year," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals Inc. "Furthermore, we have been able to gain greater financial flexibility and strengthened our balance sheet by focusing our financial resources and operations on the Shigamabs® program. With a solid financial base, and the support of a quality partner like LFB, we are entering the next clinical stage of the Shigamabs® program in a stronger position than ever."
Additions to the Board of Directors
Effective July 12, 2010, Thallion's Board of Directors approved the nominations of two new Directors, Philippe Couillard, P.C., MD and Dan Chiche, MD, who will join the Board immediately and accepted the resignation of an existing member, Michael Kurman, MD.
Dr. Philippe Couillard practiced neurosurgery during eighteen years prior to his election to the National Assembly in Quebec in 2003. He subsequently served as Minister of Health and Social Services prior to leaving public service in 2008. Dr. Couillard is currently a partner at Persistence Capital Partners LP, a private equity fund dedicated to healthcare. On June 24, 2010, he was nominated to the Queen's Privy Council for Canada by Prime Minister Stephen Harper. He has also agreed to serve as a member of Thallion's Audit Committee.
Dr. Dan Chiche is an independent consultant with more than twenty years experience as an executive in clinical research and medical affairs, as well as training in biostatistics and business administration, and has been involved in the successful development of compounds in various therapeutic areas. Dr. Chiche has also agreed to serve as a member of Thallion's Compensation Committee.
Dr. Michael Kurman has resigned from Thallion's Board of Directors. Dr. Kurman brought the Company a tremendous level of experience and expertise in the area of oncology and anticancer drug development. His contribution to the Board and the Company was extremely beneficial during the active development of TLN-4601 and TLN-232. However given the Company's renewed focus on infectious disease and Shigamabs®, Dr. Kurman has decided to concentrate on his other professional commitments.
Financial Highlights
Collaboration and licensing revenues for the three-month and six-month periods ended May 31, 2010 were $1,011,316 and $1,047,316, respectively, compared to nil for both the three-month and six-month periods ended May 31, 2009. The revenue from 2010 is related to the development and license agreement signed with LFB in February 2010 for the Company's ongoing development of Shigamabs®.
Research and development expenses before tax credits (R&D) for the three-month and six-month periods ended May 31, 2010 were $1,115,674 and $2,287,173, a decrease of 50 percent and 47 percent respectively, compared to $2,213,334 and $4,325,275 for the corresponding periods in 2009. The change in R&D expenses is primarily due to the suspension of the development of TLN-232 in July 2009 and TLN-4601 in December 2009 as well as the reduction of 19 R&D employees over the course of the fourth quarter of 2009 and the first quarter of 2010.
General and administrative (G&A) expenses for the three-month and six-month periods ended May 31, 2010 were $889,178 and $2,690,376, respectively, a decrease of 9 percent compared to $980,080 for the three-month period in 2009 and an increase of 16 percent compared to $2,317,504 for the six-month period in 2009. The change in the three-month period is primarily attributed to a reduction in G&A employees in the first quarter of 2010. The change in the six-month period is partially due to $305,000 in one-time cash incentive bonuses paid to certain employees pursuant to final execution of the definitive development and license agreement with LFB and $234,086 in one-time severance costs incurred in the first quarter of 2010.
The Company recorded a net loss of $841,219 or $0.03 per share in the three-month period ended May 31, 2010, compared with $2,998,425 or $0.09 per share in the corresponding period in 2009. For the six-month period ended May 31, 2010, the Company recorded a net loss of $3,400,586 or $0.11 per share, compared to $6,237,096 or $0.19 per share for the same period last year. The decreases in net loss are mainly attributable to higher collaboration and licensing revenues and reductions in R&D expenses as described above.
As at May 31, 2010, the Company's unrestricted cash position amounted to $12,029,783 which consists of cash, cash equivalents and short-term investments. The Company's liquidity availability amounted to $12,788,968 compared with $9,073,557 on November 30, 2009. The increase in liquidity is due in part to the up-front payment and development funding received from LFB following final execution of the development and license agreement signed in February 2010, the collection of the note receivable from Caprion Proteomics Inc. and the collection of investment tax credits receivable, partially offset by the final settlement of the Company's lease obligations in relation to the redundant facility.
Subsequent to the end of the quarter, Thallion entered into a binding agreement with the landlord of its corporate headquarters to cancel the remaining six years of its fifteen year lease obligation for a total consideration of $2,400,000.
As of July 12, 2010, Thallion had 32,194,566 common shares outstanding. The number of stock options and common share purchase warrants outstanding at July 12, 2010 were 2,417,600 and 530,000, respectively.
About Thallion Pharmaceuticals Inc.
Thallion Pharmaceuticals Inc. (TSX: TLN) is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. The Company's clinical programs include Shigamabs® and TLN-4601, a novel anti-cancer therapy. Shigamabs® is a dual antibody product for the treatment of Shiga toxin producing E. coli bacterial infections which is anticipated to enter Phase II clinical testing in the second half of 2010. Additional information about Thallion can be obtained at www.thallion.com.
Forward-Looking Statements
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking statements reflect Thallion's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time-to-time in Thallion's ongoing filings with the Canadian securities regulatory authorities which filings can be found at www.sedar.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Thallion undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.
THALLION PHARMACEUTICALS INC.
Consolidated Balance Sheets
May 31, 2010 and November 30, 2009
2010 2009
--------------------------------------------------------------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 4,813,506 $ 1,665,929
Short-term investments 7,216,277 5,910,559
Restricted cash - 1,590,024
Sales tax and other receivable 419,587 252,935
Tax credits receivable 421,384 1,159,268
Receivable from Premium Brands Holdings
Corporation 337,801 337,801
Receivable from Caprion Proteomics Inc. - 1,835,000
Deposits and prepaid expenses 751,677 465,971
--------------------------------------------------------------------------
13,960,232 13,217,487
Long-term deposit - 100,000
Restricted cash 1,000,000 1,000,000
Capital assets 186,299 214,202
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$ 15,146,531 $ 14,531,689
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,012,189 $ 1,482,111
Current portion of lease exit obligations 2,400,000 1,397,494
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4,412,189 2,879,605
Long-term portion of lease exit
obligations - 1,925,531
Deferred revenues 4,365,735 -
Shareholders' Equity:
Capital stock 115,512,823 115,502,723
Warrants 1,375,000 9,986,860
Contributed surplus 20,135,477 11,491,077
Deficit (130,654,693) (127,254,107)
--------------------------------
Total shareholders' equity 6,368,607 9,726,553
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$ 15,146,531 $ 14,531,689
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Operations
Three and six-month periods ended May 31, 2010 and 2009
(Unaudited)
Three-month period ended Six-month period ended
May 31 May 31
----------------------------------------------------
2010 2009 2010 2009
--------------------------------------------------------------------------
Revenues
Collaboration and
licensing revenues $ 1,011,316 $ - $ 1,047,316 $ -
Interest revenues 17,277 21,028 36,494 58,075
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1,028,593 21,028 1,083,810 58,075
Costs and expenses
Research and
development 1,115,674 2,213,334 2,287,173 4,325,275
Tax credits (107,346) (296,154) (455,334) (583,873)
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1,008,328 1,917,180 1,831,839 3,741,402
General and
administrative 889,178 980,080 2,690,376 2,317,504
Amortization of
capital assets 14,799 127,501 29,126 251,736
Foreign exchange
gain (42,493) (5,308) (66,945) (15,471)
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1,869,812 3,019,453 4,484,396 6,295,171
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Net loss $ (841,219)$ (2,998,425)$ (3,400,586)$ (6,237,096)
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Net basic and diluted
loss per share $ (0.03)$ (0.09)$ (0.11)$ (0.19)
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Weighted average
number of outstanding 32,182,052 32,144,316 32,164,150 32,144,316
shares
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Comprehensive Loss
Three and six-month periods ended May 31, 2010 and 2009
(Unaudited)
Three-month period ended Six-month period ended
May 31 May 31
----------------------------------------------------
2010 2009 2010 2009
--------------------------------------------------------------------------
Net loss $ (841,219)$ (2,998,425)$ (3,400,586)$ (6,237,096)
Other comprehensive
loss
Unrealized gain on
available for sale
investments - - - 265
--------------------------------------------------------------------------
Comprehensive loss $ (841,219)$ (2,998,425)$ (3,400,586)$ (6,236,831)
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Cash Flows
Three and six-month periods ended May 31, 2010 and 2009
(Unaudited)
Three-month period ended Six-month period ended
May 31 May 31
----------------------------------------------------
2010 2009 2010 2009
--------------------------------------------------------------------------
Cash flows from
operating activities:
Net loss $ (841,219)$ (2,998,425)$ (3,400,586)$ (6,237,096)
Adjustments for:
Accretion in
carrying value of
lease liability 107,031 77,294 239,274 154,588
Lease exit costs 15,572 - 15,572 -
Amortization of
capital assets 14,799 127,501 29,126 251,736
Loss on disposal of
capital assets - 6,637 - 6,637
Gain on disposal of
short-term
investments - - - (14,013)
Stock-based
compensation 17,572 107,477 36,610 219,207
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(686,245) (2,679,516) (3,080,004) (5,618,941)
Changes in operating
assets and
liabilities:
Sales tax and other
receivable (47,035) 68,583 (162,368) 53,885
Interest receivable 1,982 (3,522) (4,284) (2,052)
Tax credits
receivable (107,346) (296,153) 737,884 (583,872)
Receivable from
Caprion Proteomics
Inc. - - 1,835,000 -
Deposits and prepaid
expenses (121,590) 85,918 (285,706) 26,097
Decrease in long-
term deposit 100,000 - 100,000 -
Accounts payable and
accrued liabilities 422,173 (20,902) 530,078 258,135
Deferred revenues 537,731 - 4,365,735 -
Sub-lease revenues
collected 227,397 - 454,794 -
Payment of lease
exit obligations (232,508) (256,878) (1,632,665) (417,145)
--------------------------------------------------------------------------
780,804 (422,954) 5,938,468 (664,952)
--------------------------------------------------------------------------
94,559 (3,102,470) 2,858,464 (6,283,893)
--------------------------------------------------------------------------
Cash flows from
financing activities:
Issuance of common
shares 4,650 - 6,030 -
--------------------------------------------------------------------------
4,650 - 6,030 -
--------------------------------------------------------------------------
Cash flows from
investing activities:
Acquisition of short-
term investments (2,006,335) (3,613,310) (2,305,718) (3,636,808)
Proceeds from disposal
of short-term
investments 1,000,000 999,982 1,000,000 2,014,278
Restricted cash - - 1,590,024 -
Additions to capital
assets (2,319) (4,140) (2,319) (20,449)
Proceeds from disposal
of capital assets - 23,000 1,096 23,000
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(1,008,654) (2,594,468) 283,083 (1,619,979)
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Net increase
(decrease) in cash
and cash equivalents (909,445) (5,696,938) 3,147,577 (7,903,872)
Cash and cash
equivalents,
beginning of period 5,722,951 6,656,449 1,665,929 8,863,383
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Cash and cash
equivalents, end of
period $ 4,813,506 $ 959,511 $ 4,813,506 $ 959,511
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Contacts:
Thallion Pharmaceuticals Inc.
Michael Singer
Chief Financial Officer
514-940-3600
514-228-3622 (FAX)
info@thallion.com
www.thallion.com
Investor Relations
The Equicom Group Inc.
Ross Marshall
416-815-0700 (Ext. 238)
416-815-0080 (FAX)
rmarshall@equicomgroup.com
