VANCOUVER AND SAN DIEGO, CA, March 21, 2012 /CNW/ - Protox Therapeutics Inc. ("Protox", TSX: PRX), a developer of innovative products for the treatment of urological diseases, today announced financial results and achievements for the Fourth Quarter and year ended December 31, 2011.
"We are pleased with our achievements, in particular the strengthening of the Protox management team with the recruitment of a proven executive team with the experience of more than 20 product approvals. In addition we also markedly improved our financial position by raising over $23 million in two transactions," said Dr. Lars Ekman, Executive Chairman and President of Protox. Dr. Ekman added, "Another notable achievement was the continued progress in our Transrectal Study of PRX302 for the treatment of Benign Prostatic Hyperplasia (BPH)."
Operational and Financial Highlights
- Received FDA approval for our Investigational New Drug ("IND") Application to evaluate PRX302 in patients with moderate to severe benign prostatic hyperplasia.
- Commenced our ongoing Transrectal Study of PRX302 for the treatment of benign prostatic hyperplasia ("BPH").
- Improved our intellectual property position by securing a key European patent covering method of use of PRX302 for the treatment of BPH.
- Successfully transitioned operations from Vancouver, BC, to La Jolla, California, allowing the Company to benefit from the significant biotechnology presence in Southern California.
- Recruited a strong and seasoned management team with the notable additions of Lars Ekman, MD Ph.D., as Executive Chairman and President; Allison J. Hulme, Ph.D, as Chief Operating Officer and Head of Research & Development; Alex Casdin as Chief Financial Officer; and Dr. Richard Yocum as Chief Medical Officer.
- Secured a USD$15 million loan facility agreement in July with Oxford Finance LLC, strengthening the Company's cash position.
- Received continued support from our largest shareholder, Warburg Pincus, in December with the additional investment of CND$8.3 million under the original investment agreement.
Quarter Ended December 31, 2011
The Company reported net loss of $5.7 million ($0.05 per share) in the three months ended December 31, 2011, compared to a net loss of $2.4 million ($0.02 per share) for the three months ended December 31, 2010, representing an increase in net loss of $3.3 million. The increase in net loss in 2011 was a result of an increase in total expenses of $2.7 million, as a result of a higher level of research and development activities associated with initiating the Transrectal Study, PRX302 drug manufacturing expenses as well as the costs of transitioning our operations to La Jolla, California.
Research and Development Costs
Research and development ("R&D") costs were $4.1 million for the three months ended December 31, 2011, versus $1.6 million for the three months ended December 31, 2010, an increase of $2.5 million. The increased costs for research and development are primarily attributable to the ongoing Transrectal study of PRX302, additional PRX302 pre-clinical studies and the Chemistry, Manufacturing and Controls ("CMC") program for PRX302 drug supply.
General and Administrative Costs
General and administrative ("G&A") costs for the three months ended December 31, 2011, were $1 million, an increase of $219,000 from the $825,000 incurred during the three months ended December 31, 2010. The increase is due primarily due to additional expenses related to audit, tax and stock compensation.
Interest Income
The Company earned interest income of $5,000 during the three months ended December 31, 2011, compared to $13,000 for the three months ended December 31, 2010, for a decrease of $8,000.
Interest Expense
During the three months ended December 31, 2011, the Company incurred interest expense related to the Oxford Loan of $524,000.
Year Ended December 31, 2011
The Company reported net loss of $14.2 million ($0.12 per share) for the year ended December 31, 2011, compared to a net loss of $4.4 million ($0.05 per share) for the year ended December 31, 2010, representing an increase in net loss of $9.8 million. The increase was due to greater expenses related to increased development activities associated with the Transrectal Study of PRX302, PRX302 CMC activities and the costs of transitioning operations to La Jolla, California. The increase in comparative net loss was also impacted by the absence of Kissei license revenue in 2011, as compared to $2.8 million in 2010.
Research and Development Costs
Research and development ("R&D") costs were $8.7 million for the year ended December 31, 2011, an increase of $4.1 million from the $4.6 million for the year ended December 31, 2010. The increased costs are primarily attributable to the expenses from ongoing Transrectal BPH Study of PRX302, associated CMC activity for PRX302 drug manufacture and severance costs due to the transition of operations to La Jolla.
General and Administrative Costs
General and administrative ("G&A") costs for the year ended December 31, 2011, were $4.6 million, an increase of $2.0 million from the $2.6 million incurred during the year ended December 31, 2010. General and administrative costs increased due to severance related to the transition of operations from Vancouver to La Jolla and the increase in our U.S. based executive and operational team.
Interest Income
The Company earned interest income of $55,000 during the year ended December 31, 2011, compared to $24,000 for the year ended December 31, 2010. The increase of $31,000 is primarily due to the increased cash balances following the Company's financings.
Interest Expense
During the year ended December 31, 2011, the Company incurred interest expense related to the Oxford Loan of $946,000.
Income tax expense
During the year ended December 31, 2011, the Company did not incur any income tax expense, compared to the $315,000 recorded in the year ended December 31, 2010, which resulted from Japanese withholding taxes payable on the license revenue from Kissei.
For complete financial results, please see our filings at www.sedar.com.
About Protox
Protox Therapeutics is a developer of innovative products for the treatment of urological diseases. Protox's lead program, PRX302 (PORxin), achieved positive results from its Phase 2b placebo controlled trial called TRIUMPH, to treat benign prostatic hyperplasia (BPH or enlarged prostate). Protox has partnered with Kissei Pharmaceuticals for the development and commercialization of PRX302 in Japan. For more information, please visit www.protoxtherapuetics.com.
Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Protox' current beliefs as well as assumptions made by and information currently available to Protox and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Protox in its public securities filings; actual events may differ materially from current expectations. Protox disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Protox Therapeutics Inc.
Condensed Consolidated Statement of Operations
(Stated in United States Dollars - Audited)
| For the three months ended | For the year ended | |||||
| December 31, | December 31, | |||||
| 2011 | 2010 | 2011 | 2010 | |||
| $ | $ | $ | $ | |||
| Revenue | ||||||
| License revenue, net of royalties | - | - | - | 2,774,634 | ||
| Expenses | ||||||
| Research and development | 4,119,227 | 1,607,284 | 8,659,806 | 4,559,955 | ||
| General and administrative | 1,043,867 | 825,300 | 4,635,180 | 2,557,399 | ||
| 5,163,094 | 2,432,584 | 13,294,986 | 7,117,354 | |||
| Other income (expense) | ||||||
| Interest income | 5,275 | 12,746 | 55,306 | 24,393 | ||
| Interest expense | (524,344) | - | (946,201) | - | ||
| Loss on disposal of assets | - | - | (11,648) | - | ||
| Foreign exchange (loss) gain | (6,260) | 38,054 | (13,128) | 221,251 | ||
| (525,329) | 50,800 | (915,671) | 245,644 | |||
| Net loss before taxes | (5,688,423) | (2,381,784) | (14,210,657) | (4,097,076) | ||
| Income tax expense | - | - | - | (314,771) | ||
| Net loss for the period | (5,688,423) | (2,381,784) | (14,210,657) | (4,411,847) | ||
| Other comprehensive (loss) income | ||||||
| Currency translation differences | 217,118 | 348,689 | 13,923 | 368,603 | ||
| Total comprehensive loss | (5,471,305) | (2,033,095) | (14,196,734) | (4,043,244) | ||
| Basic and diluted loss per share | (0.05) | (0.02) | (0.12) | (0.05) | ||
| Weighted average number of outstanding shares - | ||||||
| Basic and diluted | 122,805,885 |
107,718,248 | 121,960,122 | 96,779,106 | ||
Protox Therapeutics Inc.
Condensed Consolidated Statement of Financial Position
(Stated in United States Dollars - Audited)
| December 31, | December 31, | January 1, | ||
| 2011 | 2010 | 2010 | ||
| $ | $ | $ | ||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | 23,410,478 | 12,381,237 | 1,682,498 | |
| Other receivables | 238,906 | 316,320 | 168,288 | |
| Prepaid expenses | 284,770 | 12,255 | 84,336 | |
| 23,934,154 | 12,709,812 | 1,935,122 | ||
| Non-current assets | ||||
| Property and equipment | 219,740 | 21,377 | 32,489 | |
| Intangible assets | 316,099 | 523,639 | 685,205 | |
| Other long term assets | 29,495 | - | - | |
| Total assets | 24,499,488 | 13,254,828 | 2,652,816 | |
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilties | 3,101,548 | 1,959,453 | 1,156,713 | |
| Secured promissory notes | 14,456,768 | - | - | |
| 17,558,316 | 1,959,453 | 1,156,713 | ||
| Shareholders' equity | ||||
| Common shares | 48,073,120 | 41,247,953 | 31,383,681 | |
| Common share purchase warrants | 5,926,762 | 3,613,527 | 191,419 | |
| Contributed surplus | 7,435,862 | 6,731,733 | 6,175,597 | |
| Currency translation differences | (1,981,219) | (1,995,142) | (2,363,745) | |
| Deficit | (52,513,353) | (38,302,696) | (33,890,849) | |
| Total shareholders' equity | 6,941,172 | 11,295,375 | 1,496,103 | |
| Total liabilities and shareholders' equity | 24,499,488 | 13,254,828 | 2,652,816 | |
Protox Therapeutics Inc.
Condensed Consolidated Statement of Cash Flows
(Stated in United States Dollars - Audited)
| For the three months ended | For the year ended | |||||
| December 31, | December 31, | |||||
| 2011 | 2010 | 2011 | 2010 | |||
| $ | $ | $ | $ | |||
| Cash flow used in operating activities | ||||||
| Net loss for the period | (5,688,423) | (2,381,784) | (14,210,657) | (4,411,847) | ||
| Items not affecting cash: | ||||||
| Stock based compensation | 195,439 | 118,642 | 915,432 | 457,327 | ||
| Accretion expense | 152,173 | - | 285,159 | - | ||
| Depreciation of property and equipment | 18,777 | 3,850 | 44,328 | 19,100 | ||
| Amortization of intangible assets | 48,708 | 49,212 | 201,605 | 193,623 | ||
| Unrealized foreign exchange gain | 18,171 | 561,885 | (23,631) | 561,885 | ||
| Loss on disposal of assets | (2,847) | - | 11,648 | - | ||
| Interest expense | 372,171 | - | 661,042 | - | ||
| Interest income | (8,526) | (13,274) | (55,306) | (24,393) | ||
| Change in non-cash working capital: | ||||||
| Other receivables | (23,325) | (92,504) | 72,459 | (133,737) | ||
| Prepaid expenses | 4,988 | 14,016 | (272,750) | 74,226 | ||
| Other long term assets | (29,665) | - | (29,665) | - | ||
| Accounts payable and accrued liabilities | 1,291,880 | (275,399) | 1,203,995 | 732,367 | ||
| Accrued interest | (15,921) | - | (118,750) | - | ||
| Net cash flows used in operating activities | (3,666,400) | (2,015,356) | (11,315,091) | (2,531,449) | ||
| Cash flows used in investing activities | ||||||
| Interest received | 8,526 | 13,274 | 55,306 | 24,393 | ||
| Purchase of property and equipment | (34,281) | (1,453) | (265,467) | (6,772) | ||
| Proceeds from the disposal of equipment | 11,424 | - | 11,424 | - | ||
| Net cash (used in) from investing activities | (14,331) | 11,821 | (198,737) | 17,621 | ||
| Cash flows from financing activities | ||||||
| Cash received on issuance of promissory notes | - | - | 14,645,048 | - | ||
| Issuance of common shares from private placement | ||||||
| - net of cash costs | 8,136,666 | 9,704,071 | 8,136,666 | 13,241,472 | ||
| Issuance of common shares on exercise of warrants | - | 18,218 | 77,895 | 243,292 | ||
| Issuance of common shares on exercise of stock options | - | - | 302,481 | - | ||
| Interest paid | (356,250) | - | (542,292) | - | ||
| Capital lease payments | - | (19) | - | (3,556) | ||
| Net cash from financing activities | 7,780,416 | 9,722,270 | 22,619,798 | 13,481,208 | ||
| Effect of exchange rate changes on cash | ||||||
| and cash equivalents | 38,611 | (212,139) | (76,729) | (268,641) | ||
| Net increase (decrease) in cash and cash equivalents | 4,138,296 | 7,506,596 | 11,029,241 | 10,698,739 | ||
| Cash and cash equivalents - Beginning of period | 19,272,182 | 4,874,641 | 12,381,237 | 1,682,498 | ||
| Cash and cash equivalents - End of period | 23,410,478 | 12,381,237 | 23,410,478 | 12,381,237 | ||
Lauren Glaser
Investor Relations
The Trout Group
646-378-2972
[email protected]
James Beesley
Investor Relations
Sequoia Partners
778-389-7715
[email protected]
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