Inflazyme Pharmaceuticals Ltd.: Quarterly Letter to Shareholders for Quarter Ended 30th June, 2002.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)--Aug. 22, 2002 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 ): Dear Shareholder: I am pleased to report that during the quarter ended June 30, 2002, we continued to make good progress with our three most advanced LSAIDs (Leukocyte leukocyte (l  `kəsīt'): see blood. leukocyte or white blood cell or white corpuscle Suppressing Anti-Inflammatory Drugs Anti-inflammatory drugs A class of drugs that lower inflammation and that includes NSAIDs and corticosteroids. Mentioned in: Antirheumatic Drugs ): 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. 576,092, IPL512,602 and IPL550,260. During the quarter we announced the results of our Phase II allergen allergen /al·ler·gen/ (al´er-jen) an antigenic substance capable of producing immediate hypersensitivity (allergy).allergen´ic pollen allergen challenge study carried out with our partner Aventis Pharma (see my letters to shareholders of April 23 and June 18, 2002). The results of this study support the further development of LSAIDs as potential new oral therapies for the treatment of 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. . The second generation LSAID, IPL512,602, is now being progressed into our next asthma study, in place of the first generation compound IPL576,092, because of its greater potency potency /po·ten·cy/ (po´ten-se) 1. the ability of the male to perform coitus. 2. the relationship between the therapeutic effect of a drug and the dose necessary to achieve that effect. 3. and better overall pharmacokinetic profile, which may result in a more rapid time to market. IPL512,602 is currently completing Phase Ib (multiple, ascending ascending /as·cend·ing/ (ah-send´ing) having an upward course. ascending progressing to higher levels, usually used in reference to the nervous system. dose) human clinical trials. It has been safe and well tolerated at all doses administered to date. Our target is to open an IND before the year end with the aim of commencing larger Phase II asthma trials, at numerous asthma clinics in 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. , early into 2003. Our other second generation LSAID, IPL550,260, is also undergoing Phase 1b clinical trials and similarly has been shown to be safe and well tolerated at doses administered to date. We continue to investigate this molecule in a number of pre-clinical inflammatory disease Noun 1. inflammatory disease - a disease characterized by inflammation disease - an impairment of health or a condition of abnormal functioning NEC, necrotizing enterocolitis - an acute inflammatory disease occurring in the intestines of premature infants; models and the direction of future clinical programs will be decided upon prior to commencing Phase II human clinical trials. The first generation LSAID, IPL576,092 continues in product development and is currently being reviewed by a number of potential partners in preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. models of inflammatory diseases of the eye. Future studies are planned for inflammatory diseases of the skin. In February 2001 we entered into a research agreement 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., a private company based in 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 , under which they would explore the potential of certain Inflazyme 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 compounds as new therapies for diseases of cognitive function cognitive function Neurology Any mental process that involves symbolic operations–eg, perception, memory, creation of imagery, and thinking; CFs encompasses awareness and capacity for judgment . In August 2002, Helicon reported to us that one of our molecules has shown efficacy in an in-vivo model of learning and memory and is now being evaluated as a potential new drug candidate. Although this work remains at an early stage we are encouraged that uses may be found for our products in important clinical areas in addition to 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 . We finished the quarter ended June 30, 2002 with $29.9 million in 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. The Company believes that its current working capital position will enable it to fund 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. beyond fiscal 2004 based on its current operating plans. For the quarter ended June 30, 2002 our loss was $4.8 million ($0.08 per share) compared to $4.4 million ($0.08 per share) for the first quarter of the prior financial year, an increase of $0.4 million. The increased loss primarily reflects lower interest revenues, which is due to a combination of lower investment yields and lower short term investment balances. I look forward to meeting and speaking directly to many of you at our Shareholder Meeting which will be held at the Waterfront Hotel, Vancouver, B.C. on September 12, 2002. Yours sincerely, Ian McBeath, President and 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. The statements made in this press release contain certain forward-looking comments. Actual events or results may differ from the Company's expectations. No assurances can be given that the Company will obtain the necessary approvals to enable the commencement or continuation of human clinical testing in a timely manner or at all. In addition to the matters described in the press release, future actions by the U.S. Food and Drug Administration or equivalent regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities in other countries and results of pending or future clinical trials may affect the actual results achieved by the Company. 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 release.
Inflazyme Pharmaceuticals Ltd.
Consolidated Balance Sheets
(Unaudited)
June 30 March 31
2002 2002
--------------------------
Assets
Current assets
Cash and cash equivalents $ 419,368 $ 4,926,266
Short-term investments 29,436,750 30,436,750
Interest receivable 585,332 517,948
Other receivables 63,250 66,887
Prepaid expenses 177,796 214,838
--------------------------
30,682,496 36,162,689
Property and equipment 3,220,612 3,381,003
Other assets 1,009,680 965,781
--------------------------
$34,912,788 $ 40,509,473
--------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 2,302,583 $ 3,040,580
Current portion of long-term debt 290,316 281,094
-------------------------
2,592,899 3,321,674
Long-term debt 414,267 490,397
-------------------------
3,007,166 3,812,071
-------------------------
Shareholders' equity
Capital stock
Issued
Series 1, Class A preference shares 21,957,676 21,957,676
Common shares 68,842,624 68,842,624
-------------------------
90,800,300 90,800,300
Deficit (58,894,678) (54,102,898)
-------------------------
31,905,622 36,697,402
-------------------------
$34,912,788 $ 40,509,473
-------------------------
On behalf of the board
Ian McBeath Ian Anderson
President & CEO Director
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Operations and Deficit
(Unaudited)
For the Three Months Ended
-----------------------------
June 30, 2002 June 30, 2001
-----------------------------
Revenue
Interest $ 259,757 $ 504,889
-----------------------------
259,757 504,889
-----------------------------
Expenses
Research and development 3,847,032 3,771,667
General and administration 958,324 931,199
Amortization 246,181 208,545
-----------------------------
5,051,537 4,911,411
-----------------------------
Loss for the period (4,791,780) (4,406,522)
Deficit, beginning of period (54,102,898) (36,450,423)
-----------------------------
Deficit, end of period $ (58,894,678) $(40,856,945)
-----------------------------
Basic and diluted loss per common share (0.08) (0.08)
-----------------------------
Weighted-average number of common
shares outstanding 57,550,080 52,540,133
-----------------------------
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended
-----------------------------
June 30, 2002 June 30, 2001
-----------------------------
Cash flows from operating activities
Loss for the period $ (4,791,780) $ (4,406,522)
Item not involving cash - amortization 246,181 208,545
-----------------------------
(4,545,599) (4,197,977)
Changes in non-cash working capital (764,702) 1,386,814
-----------------------------
(5,310,301) (2,811,163)
-----------------------------
Cash flows from financing activities
Repayment of long-term debt (66,908) (41,583)
Deferred financing expenses - (170,304)
Common shares issued for cash
(net of issue costs) - 263,721
-----------------------------
(66,908) 51,834
-----------------------------
Cash flows from investing activities
Short-term investments 1,000,000 9,836,335
Other assets (60,043) (103,893)
Purchase of property and equipment (69,646) (556,918)
-----------------------------
870,311 9,175,524
-----------------------------
Increase (decrease) in cash
and cash equivalents (4,506,898) 6,416,195
Cash and cash equivalents, beginning
of period 4,926,266 17,085,808
-----------------------------
Cash and cash equivalents, end of period $ 419,368 $ 23,502,003
-----------------------------
Supplemental disclosure of cash flow
information
Interest paid 24,490 32,834
Income taxes paid - -
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