TORONTO, Nov. 14 /PRNewswire-FirstCall/ - Transition Therapeutics Inc. (“Transition” or the “Company”) , a product-focused biopharmaceutical company developing therapeutics for disease indications with large markets, today announced its financial results for the quarter ended September 30, 2007.
During the first quarter of fiscal 2008 and up to the date of this press release, the Company achieved the following significant milestones:
Transition’s lead Alzheimer’s disease compound ELND-005/AZD-103 is a disease modifying agent with the potential to both prevent and reduce disease progression, and improve symptoms such as cognitive function.
In September 2006, Transition announced a global collaboration with Elan to develop and commercialize ELND-005/AZD-103. In April 2007, Transition announced that the FDA granted Fast Track designation to the investigational drug candidate ELND-005/AZD-103.
On August 30, 2007, the Company announced the completion of Phase I clinical studies with ELND-005/AZD-103. Transition and its development partner Elan have performed multiple Phase I studies evaluating the safety, tolerability and pharmacokinetic profile of ELND-005/AZD-103 in healthy volunteers. Approximately 110 subjects have been exposed to ELND-005/AZD-103 in multiple Phase I studies, including single and multiple ascending dosing; pharmacokinetic evaluation of levels in the brain; and CSF and plasma studies. ELND-005/AZD-103 was safe and well-tolerated at all doses and dosing regimens examined. There were no severe or serious adverse events observed. ELND-005/AZD-103 was also shown to be orally bio-available, cross the blood-brain barrier and achieve levels in the human brain and CSF that were shown to be effective in animal models for Alzheimer’s disease. Transition and Elan anticipate starting a Phase II clinical trial by the end of calendar 2007 or early 2008.
TT-223 for Diabetes
Preclinical data in diabetes animal models demonstrate the efficacy of gastrin analogues alone, or in combination with GLP-1 analogues or epidermal growth factor analogues. In humans, Transition’s recent Phase IIa clinical trial data showed that 4-weeks of E1-I.N.T. therapy (combination of gastrin analogue and epidermal growth factor analogue) in type 2 diabetes patients resulted in sustained reductions in blood glucose control parameters, including haemoglobinA1C, for 6 months post-treatment. Pre-clinical and clinical data suggests gastrin plays an important role in beta cell differentiation and function, capable of providing sustained glucose control in type 2 diabetes. Based on these data, Transition has commenced the studies to advance its lead gastrin analogue, TT-223, formerly known as “G1", into Phase II clinical trials in type 2 diabetes patients.
To support the Phase II clinical development program for TT-223, Transition is currently performing two Phase I studies to expand the dose ranges for TT-223. The first study, a single ascending dose study of TT-223 in healthy volunteers has completed dosing. The second study, a multiple ascending dose study of TT-223, is expected to begin later this year. Transition expects to initiate the following Phase II clinical studies evaluating TT-223 in type 2 diabetes:
For the three months ended September 30, 2007, the Company recorded a net loss of $4,098,978 ($0.18 per common share) compared to a net loss of $2,324,722 ($0.13 per common share) for the three months ended September 30, 2006.
This increase in net loss of $1,774,256 or 76% is largely due to the fact that the Company did not recognize a future income tax recovery in the current quarter, compared to the future income tax recovery of $2,729,422 that was recognized in the same period in the previous year. After adjusting for the impact of the future income tax recovery, the net loss for the period decreased $955,166 compared to the same period in fiscal 2007.
The decrease in net loss can be attributed to a decrease in amortization expense resulting from the Waratah technology being fully amortized during fiscal 2007 and increased interest income resulting from higher cash balances. The decrease in net loss is partially offset by increases in research and development and general and administrative expenses.
Research and Development
Research and development increased $676,811 or 32% from $2,088,988 for the three months ended September 30, 2006 to $2,765,799 for the three months ended September 30, 2007. This increase was primarily the result of an increase in clinical development costs related to ELND-005/AZD-103 and TT-223. The increase was also amplified in the current quarter as the comparative prior year period included the reimbursement by Novo Nordisk of E1-I.N.T.(TM) development costs in the amount of $502,293, resulting from the amended Novo Nordisk agreement. These increases were partially offset by decreases in clinical program expenses relating to the Company’s I.E.T. clinical trials and a reduction of costs relating to the drug discovery platform.
General and Administrative
General and administrative expenses increased to $1,332,181 for the three months ended September 30, 2007 from $1,029,393 for the three months ended September 30, 2006. This increase of $302,788 or 29% primarily resulted from increased professional fees, insurance and regulatory fees resulting from the NASDAQ listing, increased option expenses and increased corporate governance costs.
Amortization
Amortization decreased by $2,308,988 or 78% to $659,318 for the three months ended September 30, 2007 as compared to $2,968,306 for the same period in fiscal 2007. The decrease in amortization expense is primarily due to the Waratah technology being fully amortized during fiscal 2007. This decrease was partially offset by the full quarter impact of the amortization relating to the NeuroMedix technology acquired during the fourth quarter of fiscal 2007.
Recovery of Future Income taxes
Recovery of future income taxes decreased from $2,729,422 for the three-month period ended September 30, 2006 to Nil for the three-month period ended September 30, 2007. The decrease in recovery of future income taxes is due to the recognition of future income tax assets resulting from the amalgamation of Ellipsis Neurotherapeutics Inc., 1255205 Ontario Inc., 1255206 Ontario Inc. and Waratah Pharmaceuticals Inc. which occurred during the three-month period ended September 30, 2006. There was no equivalent transaction during the three-month period ended September 30, 2007.
Interest Income, net
Interest income for the three months ended September 30, 2007, was $596,479 as compared to $73,241 for the three months ended September 30, 2006. This increase of $523,238 or 714% in interest income primarily resulted from increased cash balances resulting from the December 2006 and July 2007 private placement financings and strengthened cash management.
SCT Anniversary Payment
Subsequent to the end of the three-month period ending September 30, 2007, the Company received the third anniversary payment of $650,000 in cash which will be recorded as a gain in the second quarter of fiscal 2008. Total payments received to date amount to $1,850,000 with the final payment of $1,650,000 due in the first quarter of fiscal 2009.
About Transition
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Transition is a biopharmaceutical company, developing novel therapeutics for disease indications with large markets. Transition’s lead products include ELND-005/ AZD-103 for the treatment of Alzheimer’s disease and TT-223 for the treatment of diabetes. Transition has an emerging pipeline of preclinical drug candidates acquired externally or developed internally using its proprietary drug discovery engine. Transition’s shares are listed on the NASDAQ under the symbol “TTHI” and the Toronto Stock Exchange under the symbol “TTH”. For additional information about the Company, please visit www.transitiontherapeutics.com.
Notice to Readers: Information contained in our press releases should be considered accurate only as of the date of the release and may be superseded by more recent information we have disclosed in later press releases, filings with the OSC, SEC or otherwise. Except for historical information, this press release may contain forward-looking statements, relating to expectations, plans or prospects for Transition, including conducting clinical trials. These statements are based upon the current expectations and beliefs of Transition’s management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include factors beyond Transition’s control and the risk factors and other cautionary statements discussed in Transition’s quarterly and annual filings with the Canadian commissions.
CONTACT: For further information on Transition, visit
www.transitiontherapeutics.com or contact: Dr. Tony Cruz, Chief Executive
Officer, Transition Therapeutics Inc, Phone: (416) 260-7770, x.223,
tcruz@transitiontherapeutics.com; Elie Farah, Chief Financial Officer,
Transition Therapeutics Inc., Phone: (416) 260-7770, x.203,
efarah@transitiontherapeutics.com
