Thallion Announces 2012 First Quarter Results and Provides Shigamabs Update

Marketwired

MONTREAL, QUEBEC--(Marketwire - April 24, 2012) - Thallion Pharmaceuticals Inc. (TLN.TO - News) today announced its financial results for the 2012 first quarter ended February 29, 2012 and updates progress made in its Shigamabs development program. As previously announced in January, the Company completed patient enrollment for the high dose cohort of the Phase II SHIGATEC trial.

"We are preparing to report preliminary study results at the upcoming 8th International Symposium on Shiga Toxin (Verocytotoxin)-Producing Escherichia coli Infections (VTEC 2012), which takes place in Amsterdam, the Netherlands, May 6-9th," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals Inc. "The VTEC conference is the leading international forum on Shiga toxin-producing bacterial infections and provides an excellent platform for the first dissemination of the un-blinded data."

The oral presentation, entitled "SHIGATEC: A phase II study evaluating Shigamabs in STEC-infected children", is expected to be given during the morning session on May 9th, 2012.

Financial Highlights

Collaboration and licensing revenues for the three-month period ended February 29, 2012, were $616,557 compared to $833,882 for the three-month period ended February 28, 2011. The decrease in revenues is primarily due to a decline in research and development expenses in the first quarter of 2012 compared to the same period in 2011, resulting in an approximate $150,000 reduction in revenues. Additionally, in the fourth quarter of 2011, the Company revised its estimate for clinical and manufacturing costs for both Phase II and Phase III SHIGATEC studies which directly impacted the percentage of completion calculation used to recognize revenues and consequently, resulted in lower revenue recognition in the first quarter of 2012 compared to the first quarter of 2011.

Research and development (R&D) expenses amounted to $1,028,563 in the first quarter of 2012, compared with $1,162,176 in the first quarter of 2011. This decrease is the result of approximately $240,000 in reduced clinical trial expenditures as patients screened/recruited during the first quarter of 2012 were fewer than during the first quarter of 2011. This was partially offset by $60,000 in increased costs related to manufacturing activities and $45,000 in increased costs associated with completion of enrollment of the high dose cohort of the SHIGATEC study.

General and administrative expenses amounted to $613,128 in the first quarter of 2012 and were stable when compared with $607,274 in the first quarter of 2011.

The Company recorded a net loss of $835,254 or $0.03 per share in the first quarter of 2012, compared with $1,009,810 or $0.03 per share in the first quarter of 2011. This decrease in net loss is mainly attributable to a decrease in R&D expenditures and higher foreign exchange gains recognized in the first quarter of 2012 as a result of changes in the fair value of forward exchange contracts, partially offset by lower collaboration and licensing revenues.

As at February 29, 2012, the Company's unrestricted cash position amounted to $7,165,474, which consists of cash and short-term investments. The Company's liquidity availability amounted to $7,504,044 compared with $8,533,803 on November 30, 2011. The decrease in liquidity is primarily due to the reduction of trade and other payables in addition to cash expenses relating to operations for the first three months of 2012, offset by Shigamabs(R) development funding received from LFB. Furthermore, the Company's working capital amounted to $5,929,635 as at February 29, 2012, compared to $6,337,692 as at November 30, 2011, a decrease of $408,057 due primarily to activities related to the Company's first quarter of operations.

As of April 24, 2012, the Company had 32,194,566 common shares outstanding and a total of 3,676,450 stock options outstanding.

About Thallion Pharmaceuticals Inc.

Thallion Pharmaceuticals Inc. (TLN.TO - News) is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. The Company's clinical programs include Shigamabs(R), a dual antibody product being evaluated in a Phase II clinical trial for the treatment of Shiga toxin-producing E. coli bacterial infections, and TLN-4601, a novel anti-cancer therapy. Additional information about the Company 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, the satisfaction of conditions provided in the development and commercialization agreement with LFB, 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.                                               

Condensed Consolidated Statements of Financial Position                     

(unaudited)                                                                 

                                                                            

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                                 February 29,   November 30,    December 1, 

                                         2012           2011           2010 

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Assets                                                                      

Current assets:                                                             

  Cash                            $ 3,870,860    $ 5,005,687    $ 6,228,340 

  Short-term investments            3,294,614      3,284,428      4,026,441 

  Foreign exchange forward                                                  

   contracts                          187,820        103,445        175,082 

  Sales tax receivable and                                                  

   other assets                        19,968         10,270        120,801 

  Tax credits receivable              338,570        243,688        434,066 

  Receivable from Premium                                                   

   Brands Holdings Corporation              -              -        292,249 

  Deposits and prepaid expenses       214,655        233,774        436,043 

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                                    7,926,487      8,881,292     11,713,022 

                                                                            

Restricted cash                     1,000,000      1,000,000      1,000,000 

Property and equipment                 39,014         42,269         55,204 

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                                    1,039,014      1,042,269      1,055,204 

                                                                            

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                                  $ 8,965,501    $ 9,923,561   $ 12,768,226 

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Liabilities and Equity                                                      

 (Deficiency)                                                               

Current liabilities:                                                        

  Trade and other payables        $ 1,719,090    $ 2,210,613    $ 3,037,971 

  Provisions                          277,762        332,986        789,132 

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                                    1,996,852      2,543,599      3,827,103 

                                                                            

Deferred revenues                   7,415,853      7,001,794      4,610,503 

                                                                            

Equity (Deficiency):                                                        

  Share capital                   115,512,823    115,512,823    115,512,823 

  Warrants                          1,375,000      1,375,000      1,375,000 

  Contributed surplus              20,320,343     20,310,461     20,230,421 

  Deficit                        (137,655,370)  (136,820,116)  (132,787,624)

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  Equity (deficiency)                                                       

   attributable to equity                                                   

   holders of the Company            (447,204)       378,168      4,330,620 

                                                                            

                                                                            

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                                  $ 8,965,501    $ 9,923,561   $ 12,768,226 

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THALLION PHARMACEUTICALS INC.                                               

Condensed Consolidated Statements of Loss and Comprehensive Loss            

(unaudited)                                                                 

                                                                            

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                                                 Three-month periods ending 

                                              ------------------------------

                                                February 29,   February 28, 

                                                        2012           2011 

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Revenues                                                                    

  Collaboration and licensing revenues             $ 616,557      $ 833,882 

                                                                            

Expenses (income)                                                           

                                                                            

  Research and development                         1,028,563      1,162,176 

  Tax credits                                        (94,882)       (91,595)

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                                                     933,681      1,070,581 

                                                                            

  General and administrative                         613,128        607,274 

                                                                            

  Finance income - interest income                   (16,142)       (15,221)

  Finance costs                                                             

    Foreign exchange loss                             49,110         49,401 

    Changes in fair value of foreign exchange                               

     forward contracts                              (127,966)       131,657 

                                              ------------------------------

                                                     (78,856)       181,058 

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  Net finance (income) costs                         (94,998)       165,837 

                                                                            

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                                                   1,451,811      1,843,692 

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Net loss and comprehensive loss attributable                                

 to equity holders of the Company                 $ (835,254)  $ (1,009,810)

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Net basic and diluted loss per share                 $ (0.03)       $ (0.03)

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Weighted average numberof outstanding shares      32,194,566     32,194,566 

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THALLION PHARMACEUTICALS INC.                                               

Condensed Consolidated Statements of Cash Flows                             

(unaudited)                                                                 

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                                                Three-month periods ended   

                                              ------------------------------

                                               February 29,   February 28,  

                                                        2012           2011 

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Cash flows used in operating activities:                                    

Net loss                                          $ (835,254)  $ (1,009,810)

Adjustments for:                                                            

  Depreciation                                         3,255          4,969 

  Finance income - interest income                   (16,142)       (15,221)

  Interest received                                   19,780         14,864 

  Gain on disposal of property and equipment         (25,331)       (22,706)

  Unrealized foreign exchange loss                    95,433        127,630 

  Decrease (increase) in fair value of open                                 

  foreign exchange forward contracts                 (84,375)       153,657 

  Stock-based compensation                             9,882         23,189 

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                                                    (832,752)      (723,428)

Changes in operating assets and liabilities:                                

  Sales tax receivable and other assets              (13,336)        14,501 

  Tax credits receivable                             (94,882)       (91,595)

  Receivable from Premium Brands                                            

  Holdings Corporation                                     -        292,249 

  Deposits and prepaid expenses                       19,119        103,858 

  Trade and other payables                          (491,523)    (1,701,883)

  Provisions                                         (55,224)       (80,344)

  Deferred revenues                                  414,059        632,128 

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                                                    (221,787)      (831,086)

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                                                  (1,054,539)    (1,554,514)

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Cash flows from investing activities:                                       

  Acquisition of short-term investments           (1,010,186)        (4,579)

  Proceeds from disposal/maturity of short-                                 

   term investments                                1,000,000        791,962 

  Additions to property and equipment                      -         (6,555)

  Proceeds from disposal of property and                                    

   equipment                                          25,331         22,706 

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                                                      15,145        803,534 

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Net decrease in cash                              (1,039,394)      (750,980)

Cash, beginning of period                          5,005,687      6,228,340 

Effect of exchange rate fluctuations on cash                                

 held                                                (95,433)      (127,630)

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Cash, end of period                              $ 3,870,860    $ 5,349,730 

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Contact:
Michael Singer
Company Contact
Chief Financial Officer
(514) 940-3600
(514) 336-2343 (FAX)
info@thallion.com
www.thallion.com

Stephen Kilmer
Investor Contact
Kilmer Lucas Inc.
(212) 618-6347
stephen@kilmerlucas.com

Leonard Zehr
Media Contact
Kilmer Lucas Inc.
(905) 690-2400 X41
len@kilmerlucas.com

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