Inflazyme Pharmaceuticals Ltd.: Financial Results for Quarter Ended December 31, 2004.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Inflazyme Pharmaceuticals Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :IZP IZP Inorganic Zinc Primer IZP Inter-Zone Path ) today announced its third quarter financial results for the period ended December December: see month. 31, 2004. The results for the third quarter reflect the integration, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus activities completed by the Company in the second quarter. The net loss in the third quarter of $4,410,189 was significantly less than the first and second quarter losses of $7,022,774 and $6,163,236, respectively. Cash used in operating activities for the third quarter decreased to $3,423,736 from $5,583,214 and $5,811,147 for the first and second quarter, respectively. The Company expects to be able to fund its operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. from current resources into the second quarter of calendar 2006. Results of Operations for the quarter ended December 31, 2004 The net loss in the third quarter ended December 31, 2004 was $4,410,189 ($0.04 per common share) compared to a net loss of $4,079,387 ($0.05 per common share) in the corresponding quarter in the prior year. The increase in the loss for the quarter of $330,082 was primarily due to higher amortization expenses and general and administration expenses offset by lower research and development expenses. Revenue Interest revenue for the quarter ended December 31, 2004 was $128,864 compared to $165,667 for the same quarter in the prior year. The decrease of $36,803 for interest earned during the quarter was primarily due to lower investment balances compared to the same period during the prior year. The Company also recognized $9,581 of licensing revenue during the quarter ended December 31, 2004 related to its partnership with Helicon Helicon (hĕl`ĭkŏn), Gr. Elikón, mountain group, c.20 mi (30 km) long, central Greece, in Boeotia; it rises to 5,736 ft (1,748 m). Helicon formed part of the border between ancient Boeotia and Phocis. Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , Inc. Research and development expenses Research and development expenses for the quarter ended December 31, 2004 were $1,890,546 compared to $2,551,195 for the same period during the prior year, a decrease of $660,649. Research and development expenses during the three month period ended December 31, 2004 decreased due to reduced laboratory activities and personnel costs. These reductions were a result of a restructuring which took place July July: see month. 27, 2004. General and administration expenses General and administration expenses for the quarter ended December 31, 2004 were $1,454,656 compared to $1,092,173 for the corresponding quarter of the prior year. The increase of $362,483 was due primarily to foreign exchange losses resulting from the strengthening Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents relative to the UK pound, as well as increased professional and consulting fees incurred during the quarter. Amortization expenses Amortization expense for the quarter ended December 31, 2004 was $1,203,431 compared to $611,267 for the corresponding prior period. The increase of $592,164 relates to the amortization of equipment and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. acquired as part of the acquisitions of Adprotech Ltd. and GlycoDesign Inc. Liquidity and Capital Resources At December 31, 2004 the Company's cash and cash equivalents totaled $18,580,218 compared to $27,375,085 at March 31, 2004. Working capital at December 31, 2004 was $18,354, 073 compared to $26,538,779 at March 31, 2004. The decrease in cash and cash equivalents for the nine months ended December 31, 2004 resulted from cash used in operating activities of $14,818,095 and cash used in financing activities of $375,706 offset by cash from investing activities of $6,398,935. Cash flows from investing activities related primarily to cash from the acquisition of Adprotech Ltd. of $7,345,992 offset by acquisition costs of $582,258. Inflazyme believes that its working capital position at December 31, 2004 will enable the Company to fund operating expenses and capital requirements into the second quarter of calendar 2006. Corporate Update Inflazyme is continuing to follow its strategy of internal development of certain protein therapeutic products, whilst advancing other technologies in conjunction with current or potential partners. Protein Therapeutics The Company is conducting pre-clinical studies on its complement inhibition inhibition In enzymology, a phenomenon in which a compound (an inhibitor), usually similar in structure to the substance on which an enzyme acts (substrate), interacts with the enzyme so that the resulting complex cannot undergo the usual reaction or cannot form the usual and Prodaptin(TM) technologies, targeting areas of unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical needs. Inflazyme's lead product Mirococept(R) (formerly APT (Automatic Programmed Tools) A high-level programming language used to generate instructions for numerical control machines. 1. (language) APT - Automatically Programmed Tools. 2. (company) APT - Audio Processing Technology. 070) is being considered in a number of acute care indications. The Company will select the optimal indication to advance into the clinic based on pre-clinical results and consultations with appropriate medical experts. The Company is continuing to seek to identify a partner for the development of ATHt, an anti-thrombotic product, which is being researched for the prevention of damaging thrombi thrombi /throm·bi/ (throm´bi) plural of thrombus. (blood clots Blood Clots Definition A blood clot is a thickened mass in the blood formed by tiny substances called platelets. Clots form to stop bleeding, such as at the site of cut. ) entering the brain during major surgical procedures Surgical procedures have long and possibly daunting names. The meaning of many surgical procedure names can often be understood if the name is broken into parts. For example in splenectomy, "ectomy" is a suffix meaning the removal of a part of the body. "Splene-" means spleen. such as cardiopulmonary cardiopulmonary /car·dio·pul·mo·nary/ (kahr?de-o-pool´mah-nar-e) pertaining to the heart and lungs. car·di·o·pul·mo·nar·y adj. Of, relating to, or involving both the heart and the lungs. by-pass surgery. A related product, ATHc, is already partnered with Spire Corporation of Bedford, Massachusetts Bedford is a town in Middlesex County, Massachusetts, United States. It is within the Greater Boston area, some 15 miles north-west of the city of Boston. The population of Bedford was 12,595 at the 2000 census. , as a coating for certain catheters. Small Molecule Therapeutics The Company announced on December 9, 2004 that our partner, Helicon Therapeutics, Inc. of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , has initiated Phase I clinical studies with IPL (Initial Program Load) Same as boot. 1. IPL - Information Processing Language. 2. IPL - Internet Public Library. 3. IPL - Initial Program Load. 4. IPL - Initial Program Loader. 455,903 (otherwise known as HT0712). The study is intended to assess the safety, tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol and pharmacokinetic properties of escalating single doses in healthy volunteers. The study is being conducted in the US under an investigational new drug (IND) application. IPL455,903 is an Inflazyme developed PDE PDE Pennsylvania Department of Education PDE Plug-In Development Environment PDE Partial Differential Equation PDE Phosphodiesterases PDE Personal Digital Entertainment PDE Pulse Detonation Engine PDE Product Data Exchange PDE Present-Day English 4 inhibitor inhibitor /in·hib·i·tor/ (in-hib´i-tor) 1. any substance that interferes with a chemical reaction, growth, or other biologic activity. 2. licensed to Helicon in January January: see month. 2003 as a potential new treatment for learning and memory disorders There are several different types of memory disorders which occur in the human mind. Among these are less severe disorders including minor short term memory loss, and the eventually incapacitating Alzheimer's Disease. . Inflazyme has the right, up until 90 days after the completion of the first Phase II clinical trial Noun 1. phase II clinical trial - a clinical trial on more persons than in phase I; intended to evaluate the efficacy of a treatment for the condition it is intended to treat; possible side effects are monitored phase II , to invest in a joint venture with Helicon, for further development and commercialization of this product in the field. As regards IPL512,602, the Company is in the process of winding down the LSAID(TM) collaboration Working together on a project. See collaborative software. with Aventis Aventis Is a pharmaceutical and lab assay testing company. It was formed in 1999 when Rhône-Poulenc S.A. merged with Hoechst AG. The merged company was based in Strasbourg, France. Sanofi-Aventis was formed in 2004 when Sanofi-Synthélabo purchased Aventis. (now part of the sanofi-aventis Sanofi-Aventis (Euronext: SAN, NYSE: SNY), headquartered in Paris, France, is one of the five largest pharmaceutical companies in the world, along with Pfizer, Bristol-Myers Squibb, Novartis, and GlaxoSmithKline. Group) and the respective rights to the programs are being returned, thereby enabling Inflazyme to explore the development of the LSAIDs(TM) with other potential pharmaceutical partners. Other Corporate Activities As previously announced, Inflazyme is evaluating suitable M&A and in-licensing opportunities to build value in the Company. The Company is working with SG Cowen Cowen is the name of: Places:
LLC - Logical Link Control in this capacity. Conference Call Inflazyme will host a conference call to discuss this announcement on Thursday, February 10, 2005 at 9:00 a.m. PDT/12:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To access the call, please dial (416) 695-9757 or (877) 461-2814. Audio replay of the conference call will be available until March 10, 2005 by calling (416) 641-2193 or (800) 293-7783 and entering passcode 7980. About Inflazyme Inflazyme is a Vancouver based biopharmaceutical company focused on developing new therapies to treat auto-immune and other related diseases. Further information on the Company may be obtained from its website at www.inflazyme.com. Statements in this news release other than historical information are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. subject to risks and uncertainties. Actual results could differ materially depending on factors such as the availability of resources, the timing and effects of regulatory actions, the strength of competition, the outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and the effectiveness of patent protection. Additional information regarding risks and uncertainties is set forth in the current Annual Information Form for Inflazyme on file with the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Securities Commissions.
Inflazyme Pharmaceuticals Ltd.
Consolidated Balance Sheets
(Unaudited)
December 31 March 31
2004 2004
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 18,580,218 $ 27,375,085
Short-term investments 209,220 452,498
Interest receivable 13,079 38,882
Other receivables 173,963 243,566
Prepaid expenses 443,030 402,623
Tax credits recoverable 1,635,945 794,675
------------ ------------
21,055,455 29,307,329
Deferred acquisition costs - 301,527
Property and equipment 3,146,727 3,487,071
Other assets 1,897,326 1,758,908
Acquired intangible assets 14,779,922 4,864,218
------------ ------------
$ 40,879,430 $ 39,719,053
------------ ------------
------------ ------------
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $ 2,622,136 $ 2,039,558
Current portion of lease liability - 320,514
Current portion of long-term debt 82,047 408,478
------------ ------------
2,704,183 2,768,550
Lease liability - 933,396
Long-term debt 3,680 52,955
Deferred licensing revenue 316,182 344,925
------------ ------------
3,024,045 4,099,826
------------ ------------
Shareholders' equity
Capital stock
Issued
Preference shares 21,957,676 21,957,676
Common shares 116,952,357 97,418,912
------------ ------------
138,910,033 119,376,588
Contributed surplus 1,397,251 1,098,340
Deficit (102,451,899) (84,855,701)
------------ ------------
37,855,385 35,619,227
------------ ------------
$ 40,879,430 $ 39,719,053
------------ ------------
------------ ------------
On behalf of the board
Walter Lovenberg (signed) Graham Wilson (signed)
Chairman of the Board of Directors Director
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Operations and Deficit
(Unaudited)
For the Three Months Ended For the Nine Months Ended
---------------------------- --------------------------
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
---------------------------- --------------------------
Revenues
Interest $ 128,864 $ 165,667 $ 446,938 $ 482,164
Licensing
revenue 9,581 9,581 92,957 63,649
---------------------------- --------------------------
138,445 175,248 539,895 545,813
---------------------------- --------------------------
Expenses
Research
and
development 1,890,546 2,551,195 7,910,937 6,588,066
General
and
adminis-
tration 1,454,656 1,092,173 4,717,718 4,389,075
Amort-
ization 1,203,432 611,267 3,470,960 1,603,382
Write-down
of
acquired
intangible
assets - - 2,335,797 0
Restr-
ucturing
expenses - - 596,488 0
Write-down
of
property
and
equipment - - 146,458 0
Write-down
of
other
assets - - 48,090 0
Gain on
reversal
of lease
liability - - (1,090,354) 0
---------------------------- --------------------------
Total
expenses 4,548,634 4,254,635 18,136,094 12,580,523
---------------------------- --------------------------
Loss for
the
period (4,410,189) (4,079,387) (17,596,199) (12,034,710)
Deficit,
beginning
of period (98,041,710) (76,776,789) (84,855,700) (68,821,466)
---------------------------- --------------------------
Deficit,
end
of period $(102,451,899) $(80,856,176) $(102,451,899)$(80,856,176)
---------------------------- --------------------------
---------------------------- --------------------------
Basic and
diluted
loss per
common
share (0.04) (0.05) $ (0.17)$ (0.15)
---------------------------- --------------------------
---------------------------- --------------------------
Weighted
average
number of
common
shares
outstanding 106,215,150 85,140,946 105,292,673 76,171,158
---------------------------- --------------------------
---------------------------- --------------------------
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended For the Nine Months Ended
---------------------------- -------------------------
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
---------------------------- -------------------------
Cash flows
from
operating
activities
Loss for
the period $ (4,410,189) $(4,079,387) $(17,596,199) $(11,155,021)
Items not
affecting
cash:
Amortization 1,203,432 611,267 3,470,960 1,603,382
Write-down
of property
and
equipment - 51,752 146,458 51,752
Write-down
of other
assets - - 48,090 -
Write-down
of acquired
intangible
assets - - 2,335,797 -
Deferred
licensing
revenue (9,581) (9,581) (28,743) (28,744)
Gain on
reversal
of lease
liability - - (1,090,354) -
Change in
lease
liability (54,520) (54,519) (163,556) (109,036)
Loss on
disposal
of property
and equipment - (51,428) - -
Stock-based
compensation 120,623 293,558 298,912 879,688
-------------------------------------------------------
(3,150,235) (3,238,338) (12,578,634) (8,757,979)
Changes in
non-cash
working capital (273,501) (195,468) (2,239,461) (1,350,162)
-------------------------------------------------------
(3,423,736) (3,433,806) (14,818,095) (10,108,141)
Cash flows
from financing
activities
Repayment of
long-term debt (53,841) (267,799) (375,706) (608,520)
Common shares
issued for cash - 15,132,002 - 15,228,842
Cost of common
share issuances - (1,491,679) - (1,578,750)
-------------------------------------------------------
(53,841) 13,372,524 (375,706) 13,041,572
-------------------------------------------------------
Cash flows
from
investing
activities
Short-term
investments (404) (21,411,598) 243,278 (16,411,598)
Disposal
of assets
held for sale - - 3,862 23,880
Cash from the
acquisition
of GlycoDesign - - - 12,852,187
Acquisition
costs -
GlycoDesign - - - (1,741,475)
Cash from the
acquisition
of Adprotech - - 7,345,992 -
Acquisition
costs -
Adprotech - - (582,258) -
Other
assets (192,014) (155,471) (289,785) (270,550)
Purchase
of property
and equipment (26,243) (60,651) (322,154) (114,496)
-------------------------------------------------------
(218,661) (21,627,720) 6,398,935 (5,662,052)
-------------------------------------------------------
Increase
(decrease)
in cash and
cash
equivalents (3,696,238) (11,689,002) (8,794,866) (2,728,621)
Cash and
cash
equivalents,
beginning
of period 22,276,456 22,402,356 27,375,085 14,321,664
-------------------------------------------------------
Cash and
cash
equivalents,
end of
period $ 18,580,218 $10,713,354 $18,580,219 $ 11,593,043
-------------------------------------------------------
-------------------------------------------------------
Supplemental
disclosure
of cash flow
information
Interest paid 3,368 27,579 19,866 82,487
Interest
received 128,864 165,667 446,938 482,164
Issuance
of common
shares and
grant of
stock
options - - - 15,064,740
on the
acquisition
of GlycoDesign
Inc. net assets
Issuance
of common
shares on
the
acquisition
of - - 19,533,444 -
Adprotech
Limited net
assets
The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. has not reviewed and does not accept responsibility for the adequacy or accuracy of this information. Inflazyme Pharmaceuticals Ltd. (TSX:IZP) |
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