Akela Pharma reports results for the second quarter of fiscal 2010
AUSTIN, TX, Aug. 12 /CNW Telbec/ - Akela Pharma, Inc. ("Akela"), (TSX: AKL), a leader in the development of therapeutics for the treatment of pain, and the company's wholly owned subsidiary, PharmaForm, today announced its financial results for the three and six months ended June 30, 2010.
Akela's net income for the three months ending June 30, 2010 was $0.1 million, $0.00 per share, as compared to a net loss of $1.1 million, or ($0.04) per share, for the same period in 2009.
"Our cost reduction efforts and realignment of business objectives over the past year have been realized in our recent financial performance. Our quarterly results, in part, reflect the success of our 2009 restructuring. We look forward to further growth in our PharmaForm subsidiary as well as continued development of Akela's lead compound Fentanyl Taifun(R) during the remainder of the year," said Greg McKee, President and Chief Executive Officer.
2010 Second Quarter Financial Highlights
Consolidated net income for the second quarter of 2010 was $0.1 million, or $0.00 per share, versus a consolidated net loss of $1.1 million, or ($0.04) per share, for the second quarter of 2009.
Total consolidated revenues for the second quarter of 2010 were $3.1 million, including $2.4 million of contract services, as compared to $4.0 million, including $3.1 million of contract services, for the same period during the previous year.
Operating results for the three months ended June 30, 2010 benefited from the strengthening of the US dollar and its impact on the balance of Euro denominated debt and trade payables which resulted in $0.7 million in non-cash foreign exchange gains during the second quarter. Excluding onetime gains and losses, Akela's consolidated net loss for the second quarter of 2010 was $0.4 million or ($0.01) per share as compared to $1.8 million or ($0.07) per share for the second quarter of 2009.
The Company had a cash balance of $0.3 million as of June 30, 2010 compared with $0.1 million as of December 31, 2009.
2010 Second Quarter Operational Highlights
- During the second quarter of 2010 our PharmaForm subsidiary benefited
from the cost reductions initiated during 2009 and continued through
2010. PharmaForm's streamlined operations and effective project
management initiatives have resulted in increased operating margins and
efficiencies during the first and second quarters of 2010. In the
second quarter of 2010 direct costs were reduced by 30% with SG&A costs
seeing a reduction of 14% over the same period in 2009. PharmaForm
ended the quarter with positive EBITDA.
- On June 30, 2010 Akela held its Annual General Meeting ("AGM") in
Vancouver, British Columbia. At the AGM shareholders ratified in person
and by proxy all amendments brought before the Board as contemplated on
the Form of Proxy including the election of Robert W. Rieder, Gordon
Busenbark and Gregory McKee to continue as directors of the Company.
Further, amendments to the Company's 2007 Stock Incentive Plan, the
changing of the registered office of the Company from the Province of
Quebec to the Province of British Columbia were also approved. All
amendments, including those referenced above, may be viewed in the
Information Circular and Form of Proxy of the Company available on
SEDAR at www.sedar.com.
- On June 30, 2010 Akela announced that the Company had obtained from the
securities regulatory authorities of Québec, Ontario, British Columbia,
Saskatchewan, Manitoba Nova Scotia and Alberta full revocation of the
management cease trade order that was prohibiting certain directors,
officers and insiders of Akela Pharma from trading in securities of
Akela Pharma for as long as the annual financial statements, CEO and
CFO certifications and related management discussion and analysis
("MD&A") and annual information form ("AIF") were not filed. On May 31,
2010, Akela Pharma filed its audited annual financial statements, CEO
and CFO certifications, MD&A and AIF for the year ended December 31,
2009, and on June 18, 2010, Akela Pharma filed its interim financial
statements for the quarter ended March 31, 2010, which documents are
available on SEDAR at www.sedar.com.
About Akela Pharma Inc.
Akela Pharma is a drug development company with its lead product, Fentanyl TAIFUN(R), being developed for the treatment of breakthrough cancer pain. Fentanyl TAIFUN(R) is a fast-acting fentanyl formulation delivered using the company's TAIFUN(R) multi-dose dry powder inhaler platform.
About PharmaForm
PharmaForm, Akela's wholly owned subsidiary, is a leading specialty contract service provider in the area of pharmaceutical dosage form development and manufacturing, specializing in controlled release and bioavailability enhancement technologies, such as hot melt extrusion, liquid filled capsules, and spray drying. Through its diverse offerings, PharmaForm solutions help pharmaceutical and biotechnology clients reach their development targets, reduce development costs and accelerate time-to-market.
Akela's common shares trade on The Toronto Stock Exchange ("TSX") under the symbol "AKL" with 30.9 million shares outstanding.
This press release contains statements which may constitute forward-looking information under applicable Canadian securities legislation or forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1955. Such forward-looking statements or information may include financial and other projections as well as statements regarding the company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect", anticipate", "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only expectations, and that the company's actual future results or performance may be materially different.
Forward-looking statements or information in this press release include, but are not limited to, statements or information concerning our ongoing drug development programs and collaborations as well as the possible receipt of future payments upon achievement of milestones.
Such forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause our actual results, events or developments to be materially different from results, events or developments expressed or implied by such forward-looking statements or information. Such factors include, among others, the possibility that risks associated with requirements for approvals by government agencies such as the FDA before products can be tested in clinical trials; the possibility that such government agency approvals will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to advance development; risks associated with the requirement that a drug candidate be found safe and effective after extensive clinical trials; our dependence on suppliers, collaborative partners and other third parties and the prospects and timing for negotiating supply agreements, corporate collaborations or licensing arrangements; our ability to attract and retain key personnel; and other factors as described in detail in our filings with the Canadian securities regulatory authorities at http://www.sedar.com.
Assumptions underlying our expectations regarding forward-looking statements or information contained in this press release include, among others, that future clinical trial results will be favorable; that our drug candidate will treat target diseases as intended; that we will raise enough capital, on reasonable terms and in a timely manner; that we will retain our key personnel; that we will obtain the necessary regulatory approvals.
In the event that any of these assumptions prove to be incorrect, or in the event that we are impacted by any of the risks identified above, we may not be able to continue in our business as planned.
For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with Canadian securities regulatory authorities, filed on SEDAR at http://www.sedar.com.
All forward-looking statements and information made herein are based on our current expectations as of the date hereof and we disclaim any intention or obligation to revise or update such forward-looking statements and information to reflect subsequent events or circumstances, except as required by law.
AKELA PHARMA INC.
Consolidated Balance Sheets
(Unaudited)
June 30, 2010 and December 31, 2009
(in thousands of US dollars)
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June 30, December 31,
2010 2009
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Assets
Current assets: Cash $ 304 $ 107
Restricted cash - 938
Accounts receivable 1,212 1,679
Prepaid expenses and other current assets 302 417
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1,818 3,141
Property and equipment 3,505 4,217
Other assets 580 598
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$ 5,903 $ 7,956
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Liabilities and Shareholders' Deficiency
Current liabilities:
Accounts payable and accrued liabilities $ 7,664 $ 7,801
Deferred revenue 2,848 2,795
Current portion of long-term debt 1,775 1,015
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12,287 11,611
Deferred revenue 13,339 14,630
Long-term debt 5,496 6,615
Income taxes 827 799
Shareholders' deficiency:
Common shares (unlimited authorized,
32,140,338 and 30,890,338 common shares
issued and outstanding with no par value
at June 30, 2010 and December 31, 2009,
respectively) 67,704 67,544
Warrants 2,288 2,954
Additional paid-in capital 9,032 8,511
Accumulated other comprehensive income 3,110 3,110
Deficit (108,180) (107,818)
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(26,046) (25,699)
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$ 5,903 $ 7,956
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AKELA PHARMA INC.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
Periods ended June 30, 2010 and 2009
(in thousands of US dollars, except share and per share data)
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Three months ended Six months ended
June 30, June 30,
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2010 2009 2010 2009
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Revenues $ 3,050 $ 4,022 $ 5,651 $ 7,792
Expenses:
Direct costs 1,387 1,979 2,831 4,047
Selling, general and
administrative 1,658 1,813 3,061 3,247
Research and development 129 892 258 2,281
Restructuring costs - (327) - 349
Stock-based compensation 8 80 15 157
Depreciation of property
and equipment 376 356 733 728
Amortization of
intangible assets - 423 - 846
Interest on long-term
debt 117 78 180 115
Unrealized loss (gain)
on securities held
for trading 47 (141) 76 (54)
Foreign exchange gain (749) (40) (1,141) (80)
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2,973 5,113 6,013 11,636
Income (loss) before under
noted items 77 (1,091) (362) (3,844)
Other income (expense):
Settlement with LRI - - - 1,664
Provision for repayment
of government grants - - - (1,544)
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- - - 120
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Net income (loss) and
comprehensive income
(loss) $ 77 $ (1,091) $ (362) $ (3,724)
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Net income (loss) per
common share - basic $ 0.00 $ (0.04) $ (0.01) $ (0.16)
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Net income (loss) per
common share - diluted $ 0.00 $ (0.04) $ (0.01) $ (0.16)
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Basic weighted
average common
shares outstanding 31,015,338 25,737,693 30,952,838 23,676,635
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Diluted weighted
average common
shares outstanding 31,015,338 25,737,693 30,952,838 23,676,635
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AKELA PHARMA INC.
Consolidated Statements of Cash Flows
(Unaudited)
Periods ended June 30, 2010 and 2009
(in thousands of US dollars)
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Three months ended Six months ended
June 30, June 30,
---------------------- -----------------------
2010 2009 2010 2009
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Cash flows from operating
activities:
Net income (loss) $ 77 $ (1,091) $ (362) $ (3,724)
Adjustments for:
Depreciation of
property and
equipment 376 356 733 728
Amortization of
intangible assets - 423 - 846
Provision for
repayment of
government grants - - - 1,544
Resctructuring
charges - (528) - 43
Stock-based
compensation 8 80 15 157
Unrealized foreign
exchange gain (749) (91) (1,141) (134)
Unrealized loss
(gain) on
securities held
for trading 47 (141) 76 (54)
Net changes in
operating assets
and liabilities (411) 100 (540) 1,400
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(652) (892) (1,219) 806
Cash flows from
financing activities:
Repayments of
long-term debt (175) (164) (269) (326)
Proceeds from issuance
of long-term debt 250 - 750 -
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75 (164) 481 (326)
Cash flows from
investing activities:
Acquisition of property
and equipment 16 (458) (3) (1,250)
Restricted cash 705 - 938 -
Acquisition of Nventa - 1,157 - 1,157
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721 699 935 (93)
Net increase (decrease)
in cash 144 (357) 197 387
Cash, beginning of period 160 3,089 107 2,345
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Cash, end of period $ 304 $ 2,732 $ 304 $ 2,732
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For further information: Gregory M. McKee, President and Chief Executive Officer, Akela Pharma Inc., Tel: 512-834-0449
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