Inflazyme Pharmaceuticals Ltd. Announces Financial Results for Year Ended March 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 announces financial results for the fiscal year ended March 31, 2004. These results do not reflect the acquisition of Adprotech Ltd. which closed on April 20, 2004, subsequent to year end. Additional information regarding Inflazyme's MD&A is filed on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review . Results of Operations The net loss for the year ended March 31, 2004 was $16,034,235 ($0.20 per common share) compared to a net loss of $14,718,568 ($0.26 per common share) in the prior year. The increase in the loss of $1,315,667 for the year was primarily due to higher general and administration expenses and higher amortization expenses partially offset by lower research and development expenses in the current year compared to the twelve months ended March 31, 2003. The net loss is expected to increase for the quarters ending June June: see month. 30, 2004 and September September: see month. 30, 2004 due to increased research and development expenses and amortization expense as a result of the Adprotech acquisition. Also for the quarter ending June 30, 2004 the Company will record an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of approximately $2.4 million as a result of its decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the clinical development of GH9001. The net loss for the remainder of fiscal 2005 will depend on the outcome of a strategic review of the Company's technology portfolio and its assets. Revenues Interest revenue for the fiscal year ended March 31, 2004 was $665,144 compared to $749,424 for the prior year. The decrease of $84,240 for the year was due to a combination of lower interest rates during the current year and a lower combined total of cash, cash equivalents 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 compared to the prior year. The Company also recognized $73,230 of licensing revenue related to partnerships 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. and Spire Biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. . Research and Development Expenses Research and development expenses for 2004 were $9,043,181 compared to $11,161,585 for the prior year, a decrease of $2,118,404. The decrease was primarily related to the reduced use of contract research and development organizations for clinical and pre-clinical development Pre-clinical development is a stage in the development of a new drug that begins before clinical trials (testing in humans) can begin, and during which important safety and pharmacology data is collected. activities during the current year. The Phase IIa clinical development activities for 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 began in May 2003 but these costs were paid for by 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. and not by the Company. The contracted research and development expenses for the year ended March 31, 2004 related primarily to research and pre-clinical studies conducted at the Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. Civic Hospital Research Centre as part of a research collaboration Working together on a project. See collaborative software. and the commencement of a Phase Ib study with GH9001. Clinical development activities for the prior period related to the continued Phase I development of IPL512,602 and IPL550,260 while contract pre-clinical activities for the prior period were for formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation and toxicology toxicology, study of poisons, or toxins, from the standpoint of detection, isolation, identification, and determination of their effects on the human body. Toxicology may be considered the branch of pharmacology devoted to the study of the poisonous effects of drugs. studies for IPL512,602 and for efficacy studies for IPL550,260. Partially offsetting the above reduction in contracted research expenses was an increase in personnel costs including the recognition of $231,580 in stock-based compensation. Stock-based compensation was not recorded in the prior year as the company prospectively adopted the revised Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. accounting recommendations for awards of stock-based compensation. The Company's research and development expense for fiscal 2005 will depend on the outcome of a strategic review of its technology portfolio. The recent acquisition of Adprotech, subsequent to the year end, will increase research and development expenses over the first two quarters of fiscal 2005 while the Company's decisions to discontinue the development of GH9001 and not to fund the Hamilton Civic Hospital Research Centre beginning July July: see month. 2004 will partially offset this increase. General and Administration Expenses General and administration expenses for the year ended March 2004 were $5,515,156 compared to $3,305,408 for the prior year. The increase of $2,209,748 for the year ended March 31, 2004 was due to higher personnel costs, professional fees, and rent expense compared to the corresponding period of the prior year. Professional fees were higher than in the prior year due to increased business development activities. In addition, professional fees related to accounting and tax services for GlycoDesign were incurred in the current year. Rent increased as a result of the Company incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. rent expense related to the GlycoDesign facility 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 . General and administration costs also increased due to increases personnel expenses, including the recognition of $720,634 in stock-based compensation which was not recorded in the prior year as the company prospectively adopted the revised Canadian Institute of Chartered Accountants accounting recommendations for awards of stock-based compensation. The Company's general and administration expense going forward could be affected by the outcome of a strategic review of its technology portfolio. The rent expense for the Company's Toronto facility is expected to be less due to sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. recoveries and termination of the lease effective December December: see month. 31, 2004. The landlord is disputing the early termination right exercised by the Company and the parties are in discussions on this matter. Amortization Expense Amortization expense for the year ended March 31, 2004 was $2,214,272 compared to $1,000,999 in the prior year. The increase of $1,213,273 was related 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 acquisition of GlycoDesign. The Company expects that its amortization expense will increase as a result of the acquisition of Adprotech and this increase will depend on the purchase price allocated to Adprotech's in-process research and development and the estimated useful life of that in-process research and development. Partially offsetting this increase will be the decrease in amortization expense due to the write down of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the intangible assets relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc GH9001. Liquidity and Capital Resources At March 31, 2004 the Company's cash, cash equivalents and short-term investments totaled $27,827,583 compared to $19,321,664 at March 31, 2003. Working capital at March 31, 2004 was $26,538,779 compared to $17,889,914 at March 31, 2003. The increase in working capital reflected the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the Company's financing in November November: see month. 2003 and the acquisition of GlycoDesign in June 2003. Cash and cash equivalents were $27,375,085 at March 31, 2004 compared to $14,321,664 at March 31, 2003 an increase of $13,053,421. The increase in cash and cash equivalents resulted from cash provided by financing activities of $12,486,101 and provided by investing activities of $14,889,993 offset by cash used to fund operations of $14,322,673. Cash flows from financing activities related primarily to the issue of 13,650,000 common shares for net proceeds of $13,523,321 less the repayment of borrowings under the Company's debt facilities of $1,165,533. Cash flows provided by investing activities primarily related to cash resulting from the acquisition of GlycoDesign of $12,852,187 and the net redemption of short-term investments of $4,547,502, offset by costs associated with the acquisition of GlycoDesign of $1,741,475. As a result of the acquisition of Adprotech subsequent to year end, the Company added cash of approximately $7 million and working capital of approximately $5 million. The Company believes that its working capital position at March 31, 2004 and the additional working capital following the Adprotech acquisition will enable the Company 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. into the second half of fiscal 2006. Company Summary Following the disappointing results of the 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 IPL512,602, the Company is currently engaged in a strategic review of its technology portfolio and assets which include the Company's LSAID(TM) program and the programs obtained through the acquisitions of GlycoDesign Inc. and Adprotech Ltd. As noted above, the Company's financial position remains strong with approximately $27.8 million in cash and short term investments for the fiscal year ended March 31, 2004. In addition, the Company added $7 million in cash subsequent to year end as a result of the Adprotech acquisition. Inflazyme will continue to exercise prudence in its expenditures and focus only on those product programs that have the most potential or can be advanced by working with collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. partners. The Company is also committed to reviewing further M&A opportunities as a means of accelerating its activities and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. accessing further value enhancing technologies. Inflazyme will be providing further guidance to the market on its progress in due course. Conference Call Inflazyme will host a conference call to discuss this announcement on Tuesday Tuesday: see week. , July 13, 2004 at 1:30 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . To access the call please dial 1-416-405-9328 or 1-800-387-6216. Audio replay of the conference call will be available until August 13, 2004 by calling 1-416-695-5800 or 1-800-408-3053 and entering pass code 3080513#. 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 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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. 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.
Consolidated Balance Sheets
(Unaudited)
March 31
----------------------------
2004 2003
----------------------------
Assets
Current assets
Cash and cash equivalents $ 27,375,085 $ 14,321,664
Short-term investments 452,498 5,000,000
Interest receivable 38,882 141,380
Other receivables 243,566 47,267
Prepaid expenses 402,623 179,150
Tax credits recoverable 794,675 -
----------------------------
29,307,329 19,689,461
Assets held for sale - -
Deferred acquisition costs 301,527 578,977
Property and equipment 3,487,071 2,556,839
Other assets 1,758,908 1,510,736
Acquired intangible assets 4,864,218 -
----------------------------
$ 39,719,053 $ 24,336,013
----------------------------
----------------------------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities $ 2,039,558 $ 1,477,492
Current portion of lease liability 320,514 -
Current portion of long-term debt 408,478 322,055
----------------------------
2,768,550 1,799,547
Lease liability 933,396 -
Long-term debt 52,955 168,342
Deferred licensing revenue 344,925 383,250
----------------------------
4,099,826 2,351,139
----------------------------
Shareholders' equity
Capital stock
Issued
Series 1, Class A preference shares 21,957,676 21,957,676
Common shares 97,418,912 68,848,664
----------------------------
119,376,588 90,806,340
Contributed surplus 1,098,340 -
Deficit (84,855,701) (68,821,466)
----------------------------
35,619,227 21,984,874
----------------------------
$ 39,719,053 $ 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 Year
Ended March 31 Ended March 31
------------------------------------------------------
2004 2003 2004 2003
------------------------------------------------------
Revenue
Interest $ 182,980 $ 133,463 $ 665,144 $ 749,424
Licensing
revenue 9,581 - 73,230 -
------------------------------------------------------
192,561 133,463 738,374 749,424
------------------------------------------------------
Expenses
Research and
development 2,430,099 1,641,097 9,043,181 11,161,585
General and
administration 1,087,430 452,460 5,515,156 3,305,408
Amortization 610,890 254,334 2,214,272 1,000,999
------------------------------------------------------
4,128,419 2,347,891 16,772,609 15,467,992
------------------------------------------------------
Loss for the
period (3,935,858) (2,214,428) (16,034,235) (14,718,568)
Deficit,
beginning of
period (80,919,843) (66,607,038) (68,821,466) (54,102,898)
------------------------------------------------------
Deficit, end
of period $(84,855,701) $(68,821,466) $(84,855,701) $(68,821,466)
------------------------------------------------------
------------------------------------------------------
Basic and
diluted loss
per common
share $ (0.05) $ (0.04) $ (0.20) $ (0.26)
------------------------------------------------------
------------------------------------------------------
Weighted-average
number of
common shares
outstanding 93,530,797 57,550,080 80,486,533 57,550,080
------------------------------------------------------
------------------------------------------------------
Inflazyme Pharmaceuticals Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months For the Year
Ended March 31 Ended March 31
------------------------------------------------------
2004 2003 2004 2003
------------------------------------------------------
Cash flows from
operating
activities
Loss for the
period $(3,935,858) $(2,214,428) $(16,034,235) $(14,718,568)
Items not
involving
cash:
Amortization 610,890 254,334 2,214,272 1,000,999
Deferred
licensing
revenue (9,581) - (38,325) -
Loss on
disposal of
property and
equipment (3,078) - 48,674 -
Write-down
on assets
held for
sale 61,018 - 61,018 -
Change in
lease
liability (54,518) - (163,554) -
Stock-based
compensation 8,858 - 952,214 6,040
------------------------------------------------------
(3,322,269) (1,960,094) (12,959,936) (13,711,529)
Changes in
non-cash
working
capital (12,576) (119,029) (1,362,737) (1,131,212)
Deferred
licensing
revenue - 383,250 - 383,250
------------------------------------------------------
(3,334,845) (1,695,873) (14,322,673) (14,459,491)
------------------------------------------------------
Cash flows
from
financing
activities
Repayment of
long-term
debt (557,013) (73,715) (1,165,533) (281,094)
Common
shares
issued for
cash - - 15,230,384 -
Cost of
common share
issuances - - (1,578,750) -
------------------------------------------------------
(557,013) (73,715) 12,486,101 (281,094)
------------------------------------------------------
Cash flows
from
investing
activities
Short-term
investments 20,959,100 6,000,000 4,547,502 25,436,750
Disposal of
assets held
for sale 280,000 - 303,880 -
Cash from
the
acquisition
of
GlycoDesign
Inc. - - 12,852,187 -
Deferred
acquisition
costs -
Adprotech
Limited (301,527) - (301,527) -
Deferred
acquisition
costs -
GlycoDesign
Inc. - (578,977) - (578,977)
Acquisition
costs - - (1,741,475) -
Other assets (95,020) (287,268) (367,112) (621,386)
Purchase of
property and
equipment (288,966) (8,008) (403,462) (100,404)
------------------------------------------------------
20,553,587 5,125,747 14,889,993 24,135,983
------------------------------------------------------
Increase
(decrease)
in cash and
cash
equivalents 16,661,729 3,356,159 13,053,421 9,395,398
Cash and
cash
equivalents,
beginning of
period 10,713,356 10,965,505 14,321,664 4,926,266
------------------------------------------------------
Cash and
cash
equivalents,
end of
period $ 27,375,085 $ 14,321,664 $ 27,375,085 $ 14,321,664
------------------------------------------------------
------------------------------------------------------
Supplemental
disclosure
of cash flow
information
Stock-based
compensation 8,858 - 952,214 6,040
Interest
paid 13,700 17,688 96,187 120,479
Issuance of
common shares
and grant of
stock options
on the acquisition
of GlycoDesign
Inc. net assets - - 15,064,740 -
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this information. |
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