Wex Pharmaceuticals Inc. Reports Third Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - November 12, 2010) - WEX Pharmaceuticals Inc. (“WEX” or the “Company”) (TSX: WXI) reported events and financial results for the three-month and nine-month periods ended September 30, 2010. All amounts, unless specified otherwise, are in Canadian dollars.

Third Quarter Highlights and Subsequent Events

 -- During the quarter ended September 30, 2010, the Company continued to focus its efforts and resources on the Canadian pivotal trials for TTX, TEC-006 and TEC-006OL. As of November 12, 2010, the Company has 13 active sites and has enrolled 91 patients in the TEC-006 trial. About 67% of the patients who completed the TEC-006 trial chose to enrol in TEC-006OL. -- The Data Monitoring Committee (“DMC”) has undertaken its scheduled interim analysis of the TEC-006 clinical trial. Based on a review of the safety and efficacy assessments for 60 evaluable patients, the DMC informed the Company that the trial was unlikely to demonstrate a clinically meaningful treatment-effect difference between TTX and placebo based on the primary composite efficacy endpoint. However, the DMC determined that with an increase in sample size, the trial may demonstrate a difference in efficacy based on one or more components of the composite endpoint. -- The Company met with Health Canada in October to discuss the outcome of the interim analysis. Health Canada agreed that the Company could continue the trial and that WEX should file a protocol amendment to add one or more co-primary endpoints to improve the chances of the trial successfully meeting a prospectively defined endpoint. Adjusting for multiple co-primary endpoints, which was not presented by the DMC in their analysis, and to increase the likelihood of success, the trial would need to enrol a total of between 238 and 254 evaluable patients, depending on the number of co-primary endpoints. Aside from a revision to the statistical analysis plan to account for the co-primary endpoints, all other aspects of the trial protocol would remain unchanged. The Company is continuing patient enrolment while evaluating the clinical and commercial feasibility of implementing these changes. -- On July 12, 2010, Pharmagesic (Holdings) Inc. (“Pharmagesic”), a wholly owned subsidiary of CK Life Sciences Int’l (Holdings) Inc., (“CKLS”) announced its intention to make an unsolicited take-over bid (the “Offer”) for all of WEX’s outstanding restricted voting shares not currently held by Pharmagesic at an offer price of $0.13 cash per share. Pharmagesic is the holder of approximately 88.7% of WEX’s issued and outstanding restricted voting shares and the sole Class A Share. The board of directors of WEX has formed a special committee of independent directors (the “Special Committee”) to review and respond to the proposal. As the Offer will be an “insider bid” under applicable securities laws the Special Committee engaged Ernst & Young LLP to conduct a valuation of WEX’s restricted voting shares. The valuation has not yet been completed. Pharmagesic has advised that its preparedness to proceed with the Offer is subject to the outcome of the valuation. If Pharmagesic makes an offer to acquire the remaining 11.3% of the Company’s restricted voting shares, Pharmagesic will be required to deliver a take-over bid circular describing its offer. The Company’s board of directors will then prepare a directors’ circular that includes a recommendation to shareholders and a discussion of the review process adopted by the board of directors and the Special Committee of the insider bid, including a discussion of any materially contrary view or abstention by a director and any material disagreement between the board and the Special Committee. 

Financial Results - Unaudited

For the three months ended September 30, 2010, the Company recorded a loss of $2.37 million ($0.01 per share) compared to a loss of $2.04 million ($0.03 per share) in the same period in the preceding year. The increase in loss of $0.33 million for the three months ended September 30, 2010, when compared to the same period in the preceding year, is mainly attributable to the increased in research and development expenditures for the TEC-006 and TEC-006OL clinical trials and asset impairment loss offset by the elimination of interest expense on a convertible debenture due to its conversion into restricted voting shares in October 2009.

For the nine months ended September 30, 2010, the Company recorded a loss of $5.34 million ($0.01 per share) compared to a loss of $6.68 million ($0.11 per share) in the same period in the preceding year. The decrease in loss of $1.34 million for the nine months ended September 30, 2010, when compared to the same period in the preceding year, is mainly attributable to the elimination of interest expense on convertible debenture due to the conversion into restricted voting shares on October 2009 offset by asset impairment loss and decrease in net loss from discontinued operation.

The Company had cash and short-term investments of $19.38 million as at September 30, 2010 compared to $5.20 million at December 31, 2009.

For further details, please refer to the unaudited Interim Consolidated Financial Statements and Management’s Discussions and Analysis for the three and nine month periods ended September 30, 2010 on www.sedar.com.

About WEX Pharmaceuticals Inc.

WEX Pharmaceuticals Inc. is dedicated to the discovery, development, manufacture and commercialization of innovative drug products to treat pain. The Company’s principal business strategy is to derive drugs from naturally occurring toxins and develop proprietary products for the global market.

Forward Looking Statements and Information

Certain statements herein may contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Forward-looking statements or information appear in a number of places and can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements and information are subject to such risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. See our annual information form and our quarterly and annual management’s discussion and analysis for additional information on risks and uncertainties relating to the forward-looking statement and information. There can be no assurance that forward-looking statements or information referenced herein will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Also, many of the factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking statements or information. All forward-looking statements and information made herein, are qualified by this cautionary statement.