Inflazyme Pharmaceuticals Ltd.: Letter to Shareholders for the Quarter Ended September 30, 2003.Business Editors/Health/Medical Writers RICHMOND Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. , British Columbia--(BUSINESS WIRE)--Nov. 18, 2003 Dear Shareholder: During the quarter ended September September: see month. 30, 2003, we continued to make good progress. Importantly our Phase IIa asthma asthma (ăz`mə, ăs`–), chronic inflammatory respiratory disease characterized by periodic attacks of wheezing, shortness of breath, and a tight feeling in the chest. A cough producing sticky mucus is symptomatic. study 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. 512,602, being executed by our partner 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. , is proceeding as planned. We have also advanced the antithrombosis technology we acquired from GlycoDesign Inc., initiating a Phase Ib clinical study with GH9001 and partnering certain aspects of the ATH coatings technology to Spire Corporation. In addition, during the quarter, we expanded our senior management team adding expertise in key areas of our business. We ended the quarter with cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $22.4 million. We expect our cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. will be expanded further upon completion of our recently announced (November November: see month. 4, 2003) $15 million bought deal financing which is expected to close on November 25, 2003. Our Phase IIa Asthma Study As you may be aware the Phase II study in asthma with IPL512,602 began in May 2003. The study is a twelve week, randomized ran·dom·ize tr.v. ran·dom·ized, ran·dom·iz·ing, ran·dom·iz·es To make random in arrangement, especially in order to control the variables in an experiment. , double-blind double blind n. A testing procedure, designed to eliminate biased results, in which the identity of those receiving a test treatment is concealed from both administrators and subjects until after the study is completed. , parallel group trial comparing the safety, tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol and efficacy of a daily oral dose of IPL512,602 to placebo placebo (pləsē`bō), inert substance given instead of a potent drug. Placebo medications are sometimes prescribed when a drug is not really needed or when one would not be appropriate because they make patients feel well taken care of. in patients with mild to moderate, persistent asthma. Approximately 160 patients are expected to be enrolled in about 25 centres across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . It is expected to take 12 to 15 months from start to completion. The study is being conducted by our partner Aventis Pharma,who are supplying all resources and paying for all costs associated with the execution and completion of this study. Given a successful outcome of this study, Aventis may pay us a milestone of US$10 million and take over the remaining development and subsequent commercialization of the product. Inflazyme may receive a further US$35 million in milestone payments and double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. royalties on sales, if commercialized. Initiation initiation, the transition and attendant ceremonies, such as ordeals and rites, involved in passing from one state or status to another, often from childhood to adulthood. It was among the most important social institutions of early humans. of Phase Ib with GH9001 Subsequent to the quarter end, on November 3, 2003, we initiated a Phase Ib study with GH9001. The Phase Ib study is a double-blind, multi dose study in healthy subjects who will receive GH9001 subcutaneously sub·cu·ta·ne·ous adj. Located or placed just beneath the skin: subcutaneous tissue; a subcutaneous implant. sub twice daily for four days, and a single dose on the fifth day. The study is designed to assess the safety and tolerability of the compound together with surrogate markers A surrogate marker (or surrogate end point) is term used in medical research for a change to the human body that is believe to be necessary to an eventual outcome or end point. of activity on measures of blood clotting blood clotting, process by which the blood coagulates to form solid masses, or clots. In minor injuries, small oval bodies called platelets, or thrombocytes, tend to collect and form plugs in blood vessel openings. . Senior Management Additions We welcomed two new additions to our management team this quarter. Dr. Gregoria Aversa Aversa (ävĕr`sä), city (1991 pop. 54,032), Campania, S Italy. It is an agricultural and transportation center, noted for its sparkling white wine. It also produces shoes, mozzarella cheese, and other dairy and agricultural products. joined Inflazyme as Vice President, Research; and Mr. Andre An·dré , John 1751-1780. British army officer hanged as a spy in the American Revolution for conspiring with Benedict Arnold. Beaulieu Beaulieu may refer to: Geographical locations Beaulieu is the name of one village in England
Financial Results for the Second Quarter Ended September 30, 2003 At September 30, 2003, we had cash and short-term investments of $22.4 million and we expect to add $15 million (less offering related expenses) to our balance sheet upon the closing of our financing on November 25, 2003. We believe that with the additional cash from this financing, we will be able to fund operations beyond fiscal 2006. For the quarter ended September 30, 2003 our loss was $3.8 million ($0.05 per share) compared to $4.8 million ($0.09 per share) for the corresponding quarter of the prior year, a decrease of $1.0 million. The decrease is attributable mainly to the expansion of our collaboration Working together on a project. See collaborative software. with Aventis Pharma who took over the clinical development expenses for the Phase II asthma study. The reduction in clinical development expenses was partially offset by higher general and administration expenses for the quarter compared to the corresponding quarter of the prior year. The increase in general and administration expenses primarily reflects increased rent expense for office and laboratory premises in Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing following the GlycoDesign Inc. acquisition. Our loss for the six months ended September 30, 2003 was $7.4 million ($0.10 per share) compared to $9.5 million ($0.17 per share) for the six months ended September 30, 2002. Once again, the decrease is attributable to lower clinical development expenses partially offset by higher general and administration expenses. It was our pleasure to meet so many of our shareholders at the investor briefing day held in Toronto on September 9, 2003 and then at our AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f one week later in 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. . You may review all of the presentations given at both of these meetings by visiting our website at www.inflazyme.com. Thank you for your continued interest in our Company. Yours sincerely, Ian McBeath, President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Inflazyme is a Vancouver based biopharmaceutical company focused on developing new therapies for the treatment of inflammation inflammation, reaction of the body to injury or to infectious, allergic, or chemical irritation. The symptoms are redness, swelling, heat, and pain resulting from dilation of the blood vessels in the affected part with loss of plasma and leucocytes (white blood , thrombosis thrombosis (thrŏmbō`sĭs), obstruction of an artery or vein by a blood clot (thrombus). Arterial thrombosis is generally more serious because the supply of oxygen and nutrition to an area of the body is halted. and other related diseases. Further information on the Company may be obtained from its website at http://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)
September 30 March 31
2003 2003
----------------------------
Assets
Current assets
Cash and cash equivalents $ 22,402,356 $ 14,321,664
Short-term investments - 5,000,000
Interest receivable 32,659 141,380
Other receivables 282,638 47,267
Prepaid expenses 408,170 179,150
Tax credits recoverable 797,143 -
----------------------------
23,922,966 19,689,461
Assets held for sale 341,018 -
Deferred acquisition costs - 578,977
Property and equipment 3,710,490 2,556,839
Other assets 1,569,534 1,510,736
Acquired intangible assets 5,447,926 -
----------------------------
$ 34,991,934 $ 24,336,013
----------------------------
----------------------------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities $ 2,288,465 $ 1,477,492
Current portion of lease liability 320,514 -
Current portion of long-term debt 889,019 322,055
----------------------------
3,497,998 1,799,547
Lease liability 1,042,432 -
Long-term debt 397,226 168,342
Deferred licensing revenue 364,088 383,250
----------------------------
5,301,744 2,351,139
----------------------------
Shareholders' equity
Capital stock
Issued
Series 1, Class A preference shares 21,957,676 21,957,676
Common shares 83,783,087 68,848,664
----------------------------
105,740,763 90,806,340
Contributed surplus 140,086 -
Deficit (76,190,659) (68,821,466)
----------------------------
29,690,190 21,984,874
----------------------------
$ 34,991,934 $ 24,336,013
----------------------------
----------------------------
On behalf of the board
Ian McBeath (signed) Graham Wilson (signed)
President & CEO Director
Director
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Operations and Deficit
(Unaudited)
For the Three Months For the Six Months
Ended September 30 Ended September 30
--------------------------------------------------------
2003 2002 2003 2002
--------------------------------------------------------
Revenue
Interest $ 168,378 $ 193,984 $ 316,497 $ 453,741
Licensing
revenue 44,487 - 54,068 -
--------------------------------------------------------
212,865 193,984 370,565 453,741
--------------------------------------------------------
Expenses
Research and
development 1,981,768 3,606,370 4,017,548 7,453,402
General and
administration 1,392,363 1,095,846 2,730,095 2,054,170
Amortization 632,231 249,371 992,115 495,552
--------------------------------------------------------
4,006,362 4,951,587 7,739,758 10,003,124
--------------------------------------------------------
Loss for
the period (3,793,497) (4,757,603) (7,369,193) (9,549,383)
Deficit,
beginning
of period (72,397,162) (58,894,678) (68,821,466) (54,102,898)
--------------------------------------------------------
Deficit, end
of period $(76,190,659) $(63,652,281) $(76,190,659) $(63,652,281)
--------------------------------------------------------
--------------------------------------------------------
Basic and
diluted
loss per
common share $ (0.05) $ (0.09) $ (0.10) $ (0.17)
--------------------------------------------------------
--------------------------------------------------------
Weighted-average
number of
common shares
outstanding 79,653,205 57,550,080 71,661,756 57,550,080
--------------------------------------------------------
--------------------------------------------------------
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months For the Six Months
Ended September 30 Ended September 30
--------------------------------------------------------
2003 2002 2003 2002
--------------------------------------------------------
Cash flows
from
operating
activities
Loss for
the period $ (3,793,497) $ (4,757,603) $ (7,369,193) $ (9,549,383)
Item not
involving
cash:
Amortization 632,231 249,371 992,115 495,552
Deferred
licensing
revenue (9,581) - (19,162) -
Loss on
disposal for
property and
equipment 51,428 - 51,428 -
Change in
lease
liability (54,518) - (54,518) -
--------------------------------------------------------
(3,173,937) (4,508,232) (6,399,330) (9,053,831)
Changes in
non-cash
working
capital (2,799,863) 713,962 (1,154,694) (50,740)
--------------------------------------------------------
(5,973,800) (3,794,270) (7,554,024) (9,104,571)
--------------------------------------------------------
Cash flows
from
financing
activities
Repayment of
long-term
debt (225,330) (69,103) (340,721) (136,011)
Common shares
issued for
cash 78,600 - 96,840 -
Cost of
common
share
issuances - - (87,071) -
--------------------------------------------------------
(146,730) (69,103) (330,952) (136,011)
--------------------------------------------------------
Cash flows
from investing
activities
Short-term
investments - 17,436,750 5,000,000 18,436,750
Disposal of
assets held
for sale - - 23,880 -
Cash from the
acquisition of
GlycoDesign
Inc. - - 12,852,187 -
Acquisition
costs - - (1,741,475) -
Other assets (38,496) (29,813) (115,079) (89,856)
Purchase of
property and
equipment (36,068) (13,118) (53,845) (82,764)
--------------------------------------------------------
(74,564) 17,393,819 15,965,668 18,264,130
--------------------------------------------------------
Increase
(decrease) in
cash and cash
equivalents (6,195,094) 13,530,446 8,080,692 9,023,548
Cash and cash
equivalents,
beginning
of period 28,597,450 419,368 14,321,664 4,926,266
--------------------------------------------------------
Cash and cash
equivalents,
end of
period $ 22,402,356 $ 13,949,814 $ 22,402,356 $ 13,949,814
--------------------------------------------------------
--------------------------------------------------------
Supplemental
disclosure
of cash flow
information
Interest paid 33,702 22,296 54,908 46,786
Issuance of
common shares
and grant of
stock options
on the
acquisition
of GlycoDesign
Inc. net
assets - - 15,064,740 -
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. |
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