SAN FRANCISCO and TEL AVIV, Israel, Aug. 29, 2019 (GLOBE NEWSWIRE) -- Kalytera Therapeutics, Inc. (TSX VENTURE: KLY and OTCQB: KALTF) (the "Company" or "Kalytera") today reported financial results for the second quarter of 2019. (All dollars U.S. unless otherwise noted.)
“Kalytera made important progress in its lead product development program during the second quarter. We recently announced that the interim results from our Phase 2 clinical study evaluating cannabidiol (“CBD”) for the prevention of acute graft versus host disease (“GVHD”) are significantly positive, and, as a result, we will not enroll the high dose cohort in this clinical study, but will instead, upon completion of the medium dose cohort, proceed directly to initiate a Phase 3 clinical registration study," stated Robert Farrell, Kalytera’s President and CEO.
Second Quarter Financial Results
In Q2 2019, the Company had no revenues from product sales, and recorded a net loss of approximately $5.4 million ($0.01 per Common Share), compared with a net profit of approximately $5.9 million ($0.04 per Common Share) in Q2, 2018. The Company’s net loss in Q2 2019 and net profit in Q2 2018 resulted from several factors in each such period, including, primarily, changes in the fair-values of certain intangible assets and liabilities that were charged to income.
Second Quarter Operating Expenses
Research and development expenses in Q2 2019 decreased to approximately $1.9 million, from approximately $2.3 million in Q2 2018. This decrease was due primarily to a decrease in subcontracted R&D costs relating to the Company’s Phase 2 clinical trial in the prevention of acute GVHD.
General and administrative expenses in Q2 2019 were approximately $1.3 million, compared to $760,000 in Q2 2018. This increase in general and administrative expenses was primarily due to an increase in legal and professional fees in the amount of $503,000 relating to the public unit offering of common shares and warrants that the Company completed in April and May 2019.
Changes in Fair-Value
The primary factors relating to the Company’s net loss in Q2 2019 compared with its net profit in Q2 2018 were several partially offsetting changes in the fair-values of certain intangible assets and liabilities that were charged to income. These changes in fair-values also resulted in corresponding changes to the Company’s balance sheet. Changes in fair-values included: (1) a reduction in the fair-value of in-process R&D in the approximate amount of $22.8 million that resulted from the Company’s decision to proceed with only the R&D program relating to the prevention of acute GVHD, while putting its R&D program relating to the treatment of acute GVHD on hold, and delays in the expected commercial launch of its products for prevention and treatment of acute GVHD; (2 ) an approximate gain of $14.0 million from changes in the fair-value of contingent payments that the Company may become obligated to pay to the former shareholders of Talent Biotechs, Ltd. in connection with the acquisition of that company by Kalytera in February 2017; (3) an approximate gain of $7.3 million that resulted from a change in the fair values of convertible instruments and convertible debentures relating to the change in the share price of the Company’s common shares from March 31, 2019 to June 30, 2019; and (4) an increase in income tax benefits of approximately $5.2 million.
Liquidity and Capital Resources
At June 30, 2019, the Company’s current assets, including cash and cash equivalents and other receivables, increased to approximately $1.6 million from approximately $747,000 at December 31, 2018.
The Company is currently in the process of closing a management-led private placement of up to approximately $1.1 million. The Company believes that the private placement will close in early September, and will provide sufficient cash to fund its operating costs through Q4 this year.
About Kalytera Therapeutics
Kalytera Therapeutics, Inc. is pioneering the development of CBD therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of CBD medicines for a range of important unmet medical needs, with an initial focus on GVHD and treatment of acute and chronic pain.
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This press release may contain certain forward-looking information and statements ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives and other statements containing the words "believes", "anticipates", "plans", "intends", "will", "should", "expects", "continue", "estimate", "forecasts" and other similar expressions. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that future clinical studies may not proceed as expected or may produce unfavourable results. Kalytera undertakes no obligation to comment on analyses, expectations or statements made by third-parties, its securities, or financial or operating results (as applicable). Although Kalytera believes that the expectations reflected in forward-looking information in this press release are reasonable, such forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond Kalytera's control. The forward-looking information contained in this press release is expressly qualified by this cautionary statement and is made as of the date hereof. Kalytera disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.