MONTREAL, QUEBEC--(Marketwire - October 12, 2010) - Thallion Pharmaceuticals Inc. (TSX: TLN) today announced its operational and financial results for the three-month and nine-month periods ended August 31, 2010.
"We are on track to initiate the Phase II Shigamabs® trial in South America prior to the end of 2010, allowing us to capture the seasonal high period for STEC infection in the southern hemisphere," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals Inc. "We continue to advance this novel dual-antibody approach for patients suffering from a condition that has no existing medical treatment today. With a strong development partner like LFB Biotechnologies providing funding support for the clinical program, we are in a great position to drive development forward with sufficient cash-on-hand to manage the trial through to pivotal clinical data."
Operational Highlights
-- Successfully obtained the required regulatory approvals to conduct the
Phase II trial evaluating Shigamabs® as a treatment for E. coli
infections in Argentina, Chile and Peru.
-- Manufactured new lots of clinical grade material for the Phase II trial.
-- Identified more than 12 sites for the conduct of the Shigamabs® trial,
which is on track to initiate in the fourth quarter of calendar 2010.
Financial Highlights
Collaboration and licensing revenues for the three-month and nine-month periods ended August 31, 2010 were $1,282,788 and $2,330,104, respectively, compared to nil for both the three-month and nine-month periods ended August 31, 2009. Revenue for the three-month and nine-month periods is entirely 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 nine-month periods ended August 31, 2010 were $1,288,069 and $3,575,242, respectively, an increase of 9 percent compared to $1,180,377 for the three-month period in 2009 and a decrease of 35 percent compared to $5,505,652 for the nine-month period in 2009. The change in the three-month period is attributable to greater R&D activity related to the development of Shigamabs® as the Company prepares for the initiation of a Phase II study in South America later this year, partially offset by reduced personnel costs relating to the restructuring of the Company's research activities in the fourth quarter of 2009. The change in the nine-month period is primarily due to the suspension of the development of TLN-232 and TLN-4601 in July 2009 and December 2009, respectively.
General and administrative (G&A) expenses for the three-month and nine-month periods ended August 31, 2010 were $626,274 and $3,316,650, respectively, a decrease of 30 percent compared to $897,760 for the three-month period in 2009 and an increase of 3 percent compared to $3,215,264 for the nine-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 and a reduction in the accretion expense relating to the Company's corporate headquarters that resulted from a final settlement reached with the landlord in June 2010 which is reflected in the three-month period. The change in the nine-month period is primarily due to reductions in personnel as well as one-time cash incentive bonuses paid to certain employees pursuant to the execution of the definitive development and license agreement signed with LFB in February 2010, partially offset by one-time severance costs incurred in the nine-month period ended August 31, 2009.
The Company recorded a net loss of $351,394 or $0.01 per share in the three-month period ended August 31, 2010, compared with $3,025,762 or $0.09 per share in the corresponding period in 2009. For the nine-month period ended August 31, 2010, the Company recorded a net loss of $3,751,980 or $0.12 per share, compared to $9,262,858 or $0.29 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 and stock-based compensation expenses.
As at August 31, 2010, the Company's unrestricted cash position amounted to $8,591,531 which consists of cash, cash equivalents and short-term investments. The Company's liquidity availability amounted to $9,440,865 compared with $9,073,557 on November 30, 2009. The increase in liquidity is primarily due to the up-front and clinical 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 related to a redundant facility and its corporate headquarters.
As of October 12, 2010, Thallion had 32,194,566 common shares outstanding. The number of stock options and common share purchase warrants outstanding at October 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
August 31, 2010 and November 30, 2009
2010 2009
---------------------------------------------------------------------------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 4,569,553 $ 1,665,929
Short-term investments 4,021,978 5,910,559
Restricted cash - 1,590,024
Sales tax and other receivable 403,490 252,935
Tax credits receivable 511,533 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 920,446 465,971
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10,764,801 13,217,487
Long-term deposit - 100,000
Restricted cash 1,000,000 1,000,000
Capital assets 172,434 214,202
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$ 11,937,235 $ 14,531,689
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 1,381,946 $ 1,482,111
Current portion of lease exit
obligations - 1,397,494
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1,381,946 2,879,605
Long-term portion of lease exit
obligations - 1,925,531
Deferred revenues 4,514,718 -
Shareholders' Equity:
Capital stock 115,512,823 115,502,723
Warrants 1,375,000 9,986,860
Contributed surplus 20,158,835 11,491,077
Deficit (131,006,087) (127,254,107)
-----------------------------------
Total shareholders' equity 6,040,571 9,726,553
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$ 11,937,235 $ 14,531,689
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Operations
Three and nine-month periods ended August 31, 2010 and 2009
(Unaudited)
Three-month Nine-month
period ended period ended
August 31 August 31
-------------------------------------------------------
2010 2009 2010 2009
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Revenues
Collaboration and
licensing
revenues $ 1,282,788 $ - $ 2,330,104 $ -
Interest revenues 15,639 11,951 52,133 70,026
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1,298,427 11,951 2,382,237 70,026
Costs and expenses
Research and
development 1,288,069 1,180,377 3,575,242 5,505,652
Tax credits (90,149) (220,413) (545,483) (804,286)
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1,197,920 959,964 3,029,759 4,701,366
General and
administrative 626,274 897,760 3,316,650 3,215,264
Stock options
cancellation
costs - 1,067,062 - 1,067,062
Amortization of
capital assets 14,987 127,697 44,113 379,433
Foreign exchange
gain (189,360) (14,770) (256,305) (30,241)
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1,649,821 3,037,713 6,134,217 9,332,884
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Net loss $ (351,394) $(3,025,762) $(3,751,980) $(9,262,858)
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Net basic and
diluted loss per
share $ (0.01) $ (0.09) $ (0.12) $ (0.29)
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Weighted average
number of
outstanding shares 32,194,566 32,144,316 32,174,363 32,144,316
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Consolidated Statements of Comprehensive Loss
Three and nine-month periods ended August 31, 2010 and 2009
(Unaudited)
Three-month Nine-month
period ended period ended
August 31 August 31
---------------------------------------------------
2010 2009 2010 2009
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Net loss $(351,394) $(3,025,762) $(3,751,980) $(9,262,858)
Other comprehensive loss
Unrealized gain on
available for sale
investments - - - 265
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Comprehensive loss $(351,394) $(3,025,762) $(3,751,980) $(9,262,593)
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Cash Flows
Three and nine-month periods ended August 31, 2010 and 2009
(Unaudited)
Three-month Nine-month
period ended period ended
August 31 August 31
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2010 2009 2010 2009
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Cash flows from
operating activities:
Net loss $ (351,394) $(3,025,762) $(3,751,980) $(9,262,858)
Adjustments for:
Accretion in
carrying value of
lease liability - 77,295 239,274 231,883
Lease exit costs - - 15,572 -
Amortization of
capital assets 14,987 127,697 44,113 379,433
Loss on disposal of
capital assets (11,014) - (11,014) 6,637
Gain on disposal of
short-term
investments - - - (14,013)
Stock options
cancellation costs - 1,067,062 - 1,067,062
Stock-based
compensation 23,358 3,340 59,968 222,547
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(324,063) (1,750,368) (3,404,067) (7,369,309)
Changes in operating
assets and
liabilities:
Sales tax and other
receivable 16,097 (30,495) (150,555) 21,338
Tax credits
receivable (90,149) 512,337 647,735 (71,535)
Receivable from
Premium Brands
Holdings
Corporation - (732,751) - (732,751)
Receivable from
Caprion Proteomics
Inc. - - 1,835,000 -
Deposits and prepaid
expenses (168,769) 32,702 (454,475) 58,799
Decrease in long-
term deposit - 100,000 100,000 100,000
Accounts payable and
accrued liabilities (630,243) (432,152) (100,165) (174,017)
Deferred revenues 148,983 - 4,514,718 -
Sub-lease revenues
collected - - 454,794 -
Payment of lease
exit obligations (2,400,000) (53,730) (4,032,665) (470,875)
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(3,124,081) (604,089) 2,814,387 (1,269,041)
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(3,448,144) (2,354,457) (589,680) (8,638,350)
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Cash flows from
financing activities:
Issuance of common
shares - - 6,030 -
Proceeds from
reorganization - 8,850,000 - 8,850,000
Costs of
reorganization - (1,016,837) - (1,016,837)
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- 7,833,163 6,030 7,833,163
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Cash flows from
investing activities:
Acquisition of short-
term investments (5,701) (297,338) (2,311,419) (3,934,146)
Proceeds from disposal
of short-term
investments 3,200,000 2,402,357 4,200,000 4,416,635
Restricted cash - (2,298,062) 1,590,024 (2,298,062)
Additions to capital
assets (3,117) (589) (5,436) (21,038)
Proceeds from disposal
of capital assets 13,009 - 14,105 23,000
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3,204,191 (193,632) 3,487,274 (1,813,611)
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Net increase
(decrease) in cash
and cash equivalents (243,953) 5,285,074 2,903,624 (2,618,798)
Cash and cash
equivalents,
beginning of period 4,813,506 959,511 1,665,929 8,863,383
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Cash and cash
equivalents, end of
period $ 4,569,553 $ 6,244,585 $ 4,569,553 $ 6,244,585
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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
The Equicom Group Inc.
Investor Relations
Ross Marshall
416-815-0700 (Ext. 238)
416-815-0080 (FAX)
rmarshall@equicomgroup.com
