Sophiris Bio Reports First Quarter Financial Results and Recent Key Operational Highlights
SAN DIEGO, CA and VANCOUVER, April 30, 2013 /CNW/ - Sophiris Bio Inc. (Sophiris, TSX: SHS) (the "Company" or "Sophiris"), a urology company developing a clinical-stage, targeted treatment for benign prostatic hyperplasia (BPH or enlarged prostate), today announced financial results and recent key operational highlights for the first quarter ended March 31, 2013.
Recent Key Operational Highlights
- Based on feedback from a guidance meeting with the U.S. Food and Drug Administration in February, the Company has finalized the design of its first Phase 3 clinical trial for the treatment of the symptoms of BPH, which the Company plans to initiate in the second quarter of this year, subject to raising additional capital. This clinical trial will be a randomized, double-blind, vehicle-controlled, dose confirmation, multicenter, safety and efficacy study of a single intraprostatic treatment of PRX302 for lower urinary tract symptoms secondary to BPH, which the Company refers to as the PLUS-1 trial.
- In February, the Company announced that it had filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to a proposed initial U.S. public offering of its common shares and listing on The NASDAQ Stock Market LLC. The Company also filed a preliminary short form prospectus with the securities regulatory authorities in British Columbia and Ontario in connection with the proposed offering.
- During the first quarter, the Company recognized revenue of $4.6 million, net of a sub-licensing royalty fee, associated with a non-refundable milestone payment due upon the achievement of certain development activities due in connection with its licensing agreement for PRX302 with Kissei Pharmaceutical Co., Ltd. ("Kissei"). The Company received payment for this milestone in April 2013.
- Topsalysin was approved as the generic name for PRX302 by both the United States Adopted Names Council (USAN) and the World Health Organization and will be published on the USAN web site and in the US Pharmacopeia Dictionary on May 1, 2013.
Financial Results for the First Quarter Ended March 31, 2013
The Company reported a net loss of $0.1 million ($0.001 per share) for the three months ended March 31, 2013, compared to a net loss of $4.5 million ($0.03 per share) for the three months ended March 31, 2012, representing a decrease of $4.4 million. The significant decrease in the Company's net loss represents the recording of revenue of $4.6 million associated with a non-refundable milestone payment, net of a sub-licensing royalty fee, in connection with the Company's licensing agreement with Kissei during the three months ended March 31, 2013. This milestone payment relates to the completion of certain development activities as outlined in the Company's licensing agreement with Kissei.
License Revenue
During the three months ended March 31, 2013 the Company recognized as revenue $4.6 million, net of a sub-licensing royalty fee, associated with a non-refundable milestone payment due upon the achievement of certain development activities in connection with the Company's licensing agreement for PRX302 with Kissei. The milestone payment was recorded net of a $0.4 million sub-license royalty fee due to UVIC Industry Partnerships Inc. and The Johns Hopkins University.
Research and Development Costs
Research and development expenses were $2.5 million for the three months ended March 31, 2013 compared to $3.1 million for the three months ended March 31, 2012, representing a decrease of $0.6 million. The decrease in research and development costs is primarily attributable to a $0.4 million decrease in the costs associated with the Company's non-clinical activities, specifically a repeat dose monkey study and a rat fertility study, both of which were completed in 2012. In addition, the costs associated with the transfer and scale-up of manufacturing activities for PRX302 decreased approximately $0.4 million from the March 31, 2012 to March 31, 2013. Offsetting this decrease is an increase in personnel related costs from the three months ended March 31, 2012 to the three months ended March 31, 2013. The research and development costs included stock-based compensation charges of $0.1 million for the three months ended March 31, 2013, as compared to approximately $48,000 for the three months ended March 31, 2012.
General and Administrative Costs
General and administrative expenses were $1.2 million for the three months ended March 31, 2013, compared to $1.0 million for the three months ended March 31, 2012. This increase is partially related to an increase in accounting and tax professional fees. This increase is also attributable to an increase in stock-based compensation expense, which increased $0.1 million for the three months ended March 31, 2012 to $0.2 million for the three months ended March 31, 2013.
Interest Expense
During the three months ended March 31, 2013, the Company incurred interest expense related to its Oxford Loan of $0.4 million, of which $0.1 million was related to the accretion of the debt discount, as compared to the three months ended March 31, 2012, in which the Company incurred $0.5 million interest expense, of which $0.2 million related to the accretion. Cash paid for interest was $0.3 million for the three months ended March 31, 2013, no change from the same period in 2012.
Foreign Exchange (Loss) Gain
For the three months ended March 31, 2013, the Company recorded a foreign exchange loss of $0.1 million compared to a foreign exchange gain of $0.1 million for the three months ended March 31, 2012.
Income Tax Expense
The milestone payment from Kissei was subject to a 10% Japanese withholding tax. As a result to Company recorded income tax expense of $0.5 million for the three months ended March 31, 2013. The Company will be eligible to utilize the withholding tax to offset future taxes due in Japan. Given the uncertainty around the Company's ability to generate future taxable income, the Company has expensed the withholding tax during the three months ended March 31, 2013.
For complete financial results, please see the Company's filings at www.sedar.com.
About Sophiris
Sophiris Bio Inc. is a urology company developing a clinical-stage, targeted treatment for benign prostatic hyperplasia (BPH or enlarged prostate), a market with significant demand. Sophiris' lead candidate for BPH, PRX302, is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments. Sophiris is planning to begin a Phase 3 clinical trial in the second quarter of 2013 subject to raising additional capital. For more information, please visit www.sophirisbio.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 Sophiris' current beliefs as well as assumptions made by and information currently available to Sophiris 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 Sophiris in its public securities filings; actual events may differ materially from current expectations. Sophiris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| Sophiris Bio Inc. Condensed Consolidated Interim Statement of Operations, Comprehensive Loss and Deficit (Stated in United States Dollars) (unaudited) |
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| For the three months ended March 31, |
For the three months ended March 31, |
|||
| 2013 | 2012 | |||
| $ | $ | |||
| Revenue | ||||
| License revenue, net of royalties | 4,625,000 | - | ||
| Expenses | ||||
| Research and development | 2,495,631 | 3,091,175 | ||
| General and administrative | 1,246,282 | 1,005,825 | ||
| 3,741,913 | 4,097,000 | |||
| Other income (expense) | ||||
| Interest income | - | 12,350 | ||
| Interest expense | (393,194) | (518,603) | ||
| Other income | 32,000 | - | ||
| Foreign exchange (loss) gain | (133,234) | 74,243 | ||
| (494,428) | (432,010) | |||
| Net income (loss) for the period before income tax expense | 388,659 | (4,529,010) | ||
| Income tax expense | 500,000 | - | ||
| Net loss for the period | (111,341) | (4,529,010) | ||
| Other comprehensive income | ||||
| Currency translation adjustments | 108,087 | 153,943 | ||
| Total comprehensive loss for the period | (3,254) | (4,375,067) | ||
| Deficit - Beginning of the period | (73,677,348) | (52,513,353) | ||
| Deficit - End of the period | (73,788,689) | (57,042,363) | ||
| Basic and diluted loss per share | (0.001) | (0.03) | ||
| Weighted average number of outstanding shares- | ||||
| Basic and diluted | 163,793,203 | 143,646,663 | ||
| Sophiris Bio Inc. Condensed Consolidated Interim Statement of Financial Position (Stated in United States Dollars) (unaudited) |
|||||||||||
| March 31, | December 31, | ||||||||||
| 2013 | 2012 | ||||||||||
| $ | $ | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | 4,605,607 | 9,720,941 | |||||||||
| Milestone payment due from Kissei | 5,000,000 | - | |||||||||
| Other receivables | 94,650 | 71,408 | |||||||||
| Deferred financing costs | 1,985,001 | 936,759 | |||||||||
| Prepaid expenses | 219,933 | 447,053 | |||||||||
| 11,905,191 | 11,176,161 | ||||||||||
| Non-current assets | |||||||||||
| Property and equipment | 144,569 | 162,762 | |||||||||
| Other long term assets | 32,000 | 44,313 | |||||||||
| Total assets | 12,081,760 | 11,383,236 | |||||||||
| Liabilities | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued liabilities | 5,849,405 | 4,612,650 | |||||||||
| Withholding tax payable | 500,000 | - | |||||||||
| Current portion of secured promissory notes | 6,035,673 | 5,894,566 | |||||||||
| 12,385,078 | 10,507,216 | ||||||||||
| Long-term secured promissory notes | 4,578,632 | 6,006,360 | |||||||||
| Shareholders' equity | |||||||||||
| Common shares | 54,490,667 | 54,490,667 | |||||||||
| Common share purchase warrants | 7,794,478 | 7,794,478 | |||||||||
| Contributed surplus | 6,559,588 | 6,307,944 | |||||||||
| Currency translation adjustments | 62,006 | (46,081) | |||||||||
| Deficit | (73,788,689) | (73,677,348) | |||||||||
| Total shareholders' deficit | (4,881,950) | (5,130,340) | |||||||||
| Total liabilities and shareholders' deficit | 12,081,760 | 11,383,236 | |||||||||
| Sophiris Bio Inc. Condensed Consolidated Interim Statement of Cash Flows (Stated in United States Dollars) (unaudited) |
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| For the three months ended March 31, |
For the three months ended March 31, |
|||
| 2013 | 2012 | |||
| $ | $ | |||
| Cash flows used in operating activities | ||||
| Net loss for the period | (111,341) | (4,529,010) | ||
| Items not affecting cash: | ||||
| Stock-based compensation | 251,644 | 184,771 | ||
| Accretion expense | 135,148 | 162,349 | ||
| Depreciation of property and equipment | 20,935 | 19,701 | ||
| Amortization of intangible assets | - | 49,777 | ||
| Unrealized foreign exchange loss | 123,820 | 456,449 | ||
| Interest expense | 258,046 | 356,254 | ||
| Interest income | - | (12,350) | ||
| Change in working capital: | ||||
| Milestone payment due from Kissei | (5,000,000) | - | ||
| Other receivables | (24,382) | 73,419 | ||
| Prepaid expenses | 226,681 | (28,474) | ||
| Other long term assets | 12,147 | (6,118) | ||
| Accounts payable and accrued liabilities | 1,289,098 | (1,016,236) | ||
| Withholding tax payable | 500,000 | - | ||
| Deferred financing costs | (1,054,985) | - | ||
| Net cash flows used in operating activities | (3,373,189) | (4,289,468) | ||
| Cash flows (used in) provided by investing activities | ||||
| Interest received | - | 12,350 | ||
| Purchase of property and equipment | (2,742) | (9,389) | ||
| Net cash flows (used in) provided by investing activities | (2,742) | 2,961 | ||
| Cash flows (used in) provided by financing activities | ||||
| Issuance of common shares in connection with private placement | ||||
| - net of issurance costs paid | - | 8,343,738 | ||
| Principal payments on notes payable | (1,421,769) | - | ||
| Interest paid | (269,302) | (356,254) | ||
| Net cash flows (used in) provided by financing activities | (1,691,071) | 7,987,484 | ||
| Effect of exchange rate changes on cash | ||||
| and cash equivalents | (48,332) | (205,043) | ||
| Net (decrease) increase in cash and cash equivalents | (5,115,334) | 3,495,934 | ||
| Cash and cash equivalents - Beginning of the period | 9,720,941 | 23,410,478 | ||
| Cash and cash equivalents - End of the period | 4,605,607 | 26,906,412 | ||
SOURCE: Sophiris Bio, Inc.
Lauren Glaser
Investor Relations
The Trout Group
646-378-2972
[email protected]
James Beesley
Investor Relations
Sequoia Partners
778-389-7715
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Michael Moore
Investor Relations
Equicom Group
619-467-7067
[email protected]
Jason I. Spark
Canale Communications, Inc.
619-849-6005
[email protected]
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