MONTRÉAL, QUÉBEC--(Marketwire - Oct. 5, 2012) - Thallion Pharmaceuticals Inc. (TLN.TO) today announced its operational and financial results for the three-month and nine-month periods ended August 31, 2012.
"The proceeds from the sale of Caprion Proteomics have significantly strengthened our balance sheet and enhances our financial flexibility," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals. "We are continuing to explore strategic ways in which to best utilize this increased capital to the benefit of our shareholders."
- Sale of Caprion Proteomics Inc. to an affiliate of Chicago Growth Partners, including Thallion's interest in the company for immediate cash proceeds of $3,859,660 as well as up to $574,663 in future cash proceeds, currently held in escrow, for a potential total cash consideration of $4,434,323.
- Subsequent to quarter end, Philippe Couillard, P.C., MD resigned from the Company's Board of Directors due to his renewed political activities, effective October 5, 2012. Mr. Couillard had served on the Board since July 2010.
Collaboration and licensing revenues for the three-month and nine-month periods ended August 31, 2012, were $234,743 and $1,383,336 respectively, compared to $772,335 and $2,627,251 in the corresponding periods of 2011. These decreases in revenues are primarily due to the anticipated decline in research and development expenses in the first nine months of 2012. Furthermore, the Company revised its estimate for clinical and manufacturing costs necessary to complete both the Phase II and anticipated Phase III Shigamabs studies in the fourth quarter of 2011, which directly impacts the percentage of completion calculation used to recognize revenues and results in lower revenue recognition in the first nine months of 2012.
Research and development (R&D) expenses before tax credits for the three-month and nine-month periods ended August 31, 2012 were $446,789 and $2,370,822, respectively. This represents a 58% decrease in cost from $1,054,747 in the three-month period ended August 31, 2011, and a 28% decrease in cost from $3,303,606 in the nine-month period ended August 31, 2011. The decrease is primarily the result of reduced clinical trial expenditures associated with the Phase II SHIGATEC trial as both patient enrollment and the core portion of the study were completed during the first quarter of 2012.
General and administrative (G&A) expenses for the three-month and nine-month periods ended August 31, 2012 were $531,480 and $1,771,339, respectively, compared with $642,008 and $1,902,910 in the three-month and nine-month periods ended August 31, 2011. This decrease is the result of reduced legal and intellectual property costs as well as ongoing cost reduction efforts.
The Company recorded net earnings of $3,722,541 or $0.12 per share in the third quarter of 2012 and net earnings of $2,163,316 or $0.07 per share in the nine-month period ended August 31, 2012, primarily the result of the $4,434,323 gain recorded on the disposal of the investment in Caprion Proteomics Inc.
Excluding this one-time gain, the Company recorded a net loss of $711,782 or $0.02 per share in the third quarter of 2012, compared with a net loss of $870,583 or $0.03 per share in the third quarter of 2011, reflecting a decrease of $158,801 or 18% quarter over quarter. When excluding this one-time gain, the Company recorded a net loss of $2,271,007 or $0.07 per share in the nine-month period ended August 31, 2012, compared with a net loss of $2,662,041 or $0.08 per share in the nine-month period ended August 31, 2011, reflecting a decrease of $391,034 or 15% period over period. These decreases in net loss are mainly attributable to anticipated decreases in R&D expenditures based on completion of the core Phase II SHIGATEC study in January 2012 and higher foreign exchange gains recognized in the first nine months of 2012 as a result of changes in the fair value of foreign exchange forward contracts, partially offset by the anticipated lower collaboration and licensing revenues.
As at August 31, 2012, the Company's unrestricted cash position amounted to $10,320,715, which consists of cash and short-term investments. The Company's liquidity availability amounted to $10,435,016 compared with $8,533,803 on November 30, 2011. Furthermore, the Company's working capital amounted to $10,210,865 as at August 31. 2012 compared to $6,337,693 as at November 30, 2011.
The increases in liquidity and working capital are primarily due to the one-time gain realized from the sale of the Company's investment in Caprion Proteomics Inc. in July 2012 as well as the ongoing Shigamabs® development funding received from LFB, partially offset by the reduction of current liabilities and the use of cash related to operations during the first nine months of 2012. The Company believes that its cash position will be sufficient to finance its operations and capital requirements for at least the next twelve months.
As of October 5, 2012, the Company had 32,194,566 common shares and a total of 3,676,450 stock options outstanding.
About Thallion Pharmaceuticals Inc.
Thallion Pharmaceuticals Inc. (TLN.TO) 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 being evaluated in a Phase II clinical trial for the treatment of Shiga toxin producing E. coli bacterial infections. Additional information about the Company can be obtained at www.thallion.com.
This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "August", "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|
|August 31, 2012||November 30, 2011|
|Cash||$ 7,205,941||$ 5,005,687|
|Foreign exchange forward contracts||182,175||103,445|
|Sales tax receivable and other assets||8,737||10,270|
|Balance of sale receivable||574,663||-|
|Tax credits receivable||114,301||243,688|
|Deposits and prepaid expenses||178,945||233,774|
|Property and equipment||40,139||42,269|
|$ 12,419,675||$ 9,923,561|
|Liabilities and Equity|
|Trade and other payables||$ 891,242||$ 2,210,613|
|Equity attributable to equity holders of the Company||2,584,726||378,168|
|$ 12,419,675||$ 9,923,561|
|THALLION PHARMACEUTICALS INC.|
|Condensed Consolidated Statements of Earnings (Loss) and|
|Comprehensive Income (Loss) (unaudited)|
|Three-month periods ended August 31||Nine-month periods ended August 31|
|Collaboration and licensing revenues||$ 234,743||$ 772,335||$ 1,383,336||$ 2,627,251|
|Research and development||446,789||1,054,747||2,370,822||3,303,606|
|General and administrative||531,480||642,008||1,771,339||1,902,910|
|Write-off of asset held for sale||-||63,575||-||63,575|
|Finance (income) costs|
|Foreign exchange loss (gain)||185,743||(16,829||)||180,509||(23,345||)|
|Changes in fair value of foreign exchange forward contracts||(85,949||)||(35,087||)||(314,453||)||326,137|
|Gain on disposal of investment in Caprion Proteomics Inc.||4,434,323||-||4,434,323||-|
|Net earnings (loss) and comprehensive income (loss) attributable to equityholders of the Company||$ 3,722,541||$ (870,583||)||$ 2,163,316||$ (2,662,041||)|
|Basic and diluted earnings (loss) per share||$ 0.12||$ (0.03||)||$ 0.07||$ (0.08||)|
|Weighted average number of outstanding shares||32,194,566||32,194,566||32,194,566||32,194,566|
|THALLION PHARMACEUTICALS INC.|
|Condensed Consolidated Statements of Cash Flows|
|Nine-month periods ended |
|Cash flows used in operating activities:|
|Net earnings (loss)||$ 2,163,316||$ (2,662,041||)|
|Finance income - interest income||(46,193||)||(42,657||)|
|Gain on disposal of property and equipment||(25,331||)||(22,897||)|
|Gain on disposal of investment in Caprion Proteomics Inc.||(4,434,323||)||-|
|Write-off of asset held for sale||-||63,575|
|Effect of exchange rate fluctuations on cash held||287,198||28,292|
|Decrease (increase) in fair value of open|
|foreign exchange forward contracts||(78,730||)||285,298|
|Changes in operating assets and liabilities:|
|Sales tax receivable and other assets||(1,437||)||68,832|
|Tax credits receivable||129,387||264,825|
|Receivable from Premium Brands|
|Deposits and prepaid expenses||54,829||241,454|
|Trade and other payables||(1,319,371||)||(1,418,385||)|
|Cash flows from investing activities:|
|Proceeds from disposal of investment in Caprion Proteomics Inc.||3,859,660||-|
|Acquisition of short-term investments||(1,030,346||)||(2,040,140||)|
|Proceeds from disposal/maturity of short-term investments||1,200,000||2,791,962|
|Additions to property and equipment||(8,279||)||(6,555||)|
|Proceeds from disposal of property and equipment||25,331||22,897|
|Net increase (decrease) in cash||2,487,452||(776,655||)|
|Cash, beginning of period||5,005,687||6,228,340|
|Effect of exchange rate fluctuations on cash held||(287,198||)||(28,292||)|
|Cash, end of period||$ 7,205,941||$ 5,423,393|