Sophiris Bio Reports Fourth Quarter and Year-End 2012 Financial Results and Key Operational Highlights

SAN DIEGO, CA and VANCOUVER, Feb. 13, 2013 /CNW/ - Sophiris Bio Inc. (Sophiris, TSX: SHS) (the "Company"), a biopharmaceutical company developing a treatment for benign prostatic hyperplasia (BPH or enlarged prostate), today announced financial results and recent key operational highlights for the fourth quarter and the year-ended December 31, 2012.

Recent Key Operational Highlights for the year-ended 2012

• The 12 month data from the Company's Phase 2b study (TRIUMPH) of PRX302 has been accepted for publication by the Journal of Urology and is currently available online at: http://www.jurology.com/article/S0022-5347(12)05468-7/abstract.
  
  
• In the 12 month Phase 2b (TRIUMPH) study, patients receiving PRX302 for the treatment of BPH experienced a clinically significant improvement in the subjective symptom score (International Prostate Symptom Score, or IPSS) and the objective measure of mean peak urinary flow rate (Qmax) sustained over 12 months.
  
  
• The Company released data from its transrectal safety study demonstrating that PRX302 was well tolerated through three months following a transrectal injection. The results support the use of a transrectal ultrasound (TRUS) guided injection for the delivery of PRX302 directly into the prostate. This route of administration will be used in future clinical trials of PRX302 in patients with BPH.
  
  
• The Company announced the appointment of Randall E. Woods as Chief Executive Officer effective August 16, 2012. Mr. Woods brings almost 40 years of relevant industry experience to Sophiris, including past roles as CEO at NovaCardia Inc. (acquired by Merck & Co in 2007) and Corvas International (acquired by Dendreon in 2003).
  
  
• During the first quarter of 2012 the Company closed an additional CND $8.3 million investment from our largest shareholder, Warburg Pincus pursuant to its rights under the terms of the Investment Agreement dated September 28, 2010.

Financial Results for the Quarter Ended December 31, 2012

The Company reported a net loss of $5.3 million ($0.03 per share, basic and diluted) for the three months ended December 31, 2012, compared to a net loss of $5.7 million ($0.05 per share, basic and diluted) for the three months ended December 31, 2011, representing a decrease of $0.4 million.

Research and Development Expenses

Research and development expenses were $3.3 million for the three months ended December 31, 2012 compared to $4.1 million for the three months ended December 31, 2011 a decrease of $0.8 million. The decrease in research and development expenses is primarily attributable to a $1.5 million decrease in the costs associated with the Company's CMC program for the manufacture and testing of clinical batches of PRX302 clinical trial material. Offsetting this decrease is an increase of $0.8 million of clinical trial costs during the three months ended December 31, 2012 primarily associated with start-up costs for the Company's first pivotal study for the treatment of the symptoms of BPH which the Company expects to initiate in the first half of 2013.

General and Administrative Expenses

General and administrative expenses were $1.3 million for the three months ended December 31, 2012 compared to $1.0 million for the three months ended December 31, 2011. This increase primarily relates to an increase in personnel related costs associated with the build-out of the Company's San Diego headquarters.

Interest Income

The Company earned interest income of approximately $15,000 during the three months ended December 31, 2012 compared to approximately $5,000 for the three months ended December 31, 2011. Interest income earned during a particular period or between periods is a function of interest rates available as well as average cash balances invested in interest bearing securities.

Interest Expense

During the three months ended December 31, 2012, the Company incurred interest expense related to our Oxford loan of $0.4 million of which $0.1 million was related to the accretion of the debt discount, as compared to interest expense of $0.5 million during the three months ended December 31, 2011, of which $0.2 million related to accretion of the debt discount. Cash paid for interest was $0.3 million for the three months ended December 31, 2012 as compared to $0.4 million for the three month period ended December 31, 2011. Interest expense will decline over the term of the loan as the principal is reduced.

Financial Results for the Year-Ended December 31, 2012

The Company reported a net loss of $21.2 million ($0.13 per share, basic and diluted) for the year-ended December 31, 2012, compared to a net loss of $14.2 million ($0.12 per share, basic and diluted) for the year-ended December 31, 2011, representing an increase of $7.0 million.

Research and Development Expenses

Research and development expenses were $13.5 million in the year ended December 31, 2012 and $8.7 million in the year ended December 31, 2011, an increase of $4.8 million. This increase is primarily attributable to an increase of $0.4 million associated with the Company's ongoing Phase 1/2 transrectal BPH clinical trial, which began enrollment in September 2011, an increase of $2.0 million of start-up costs associated with the Company's first pivotal study and an increase of $1.8 million in our costs associated with the transfer and scale up of manufacturing activities for PRX302 clinical trial material.

General and Administrative Expenses

General and administrative expenses were $5.7 million for the year ended December 31, 2012 compared to $4.6 million for the year ended December 31, 2011, an increase of $1.1 million. Included in the Company's general and administrative expenses for the year ended December 31, 2011 is $0.7 million of severance related costs associated with the shut-down of the Company's Vancouver operations. Excluding these severance related costs, the Company's general and administrative expenses increased $1.8 million for the year ended December 31, 2012 as compared to the year ended December 31, 2011. This increase primarily relates to an increase of approximately $0.6 million in personnel related costs associated with the build-out of the Company's San Diego general and administrative group, an increase in professional fees of approximately $0.5 million and an increase of approximately $0.6 million in market research expenses.

Interest Income

The Company earned interest income of $0.1 million during the year ended December 31, 2012 compared to approximately $55,000 for the year ended December 31, 2011. Interest income earned during a particular period or between periods is a function of interest rate available as well as average cash balances invested in interest bearing securities.

Interest Expense

During the year ended December 31, 2012, the Company incurred interest expense related to the Oxford loan of approximately $2.0 million of which $0.6 million was related to the accretion of the debt discount, as compared to interest expense of $0.9 million during the year ended December 31, 2011, of which $0.3 million was related to the accretion of the debt discount. Cash paid for interest was $1.4 million for the year ended December 31, 2012 as compared to $0.5 million for the year ended December 31, 2011. The Oxford loan was originated during July 2011. As such, there was an increase in interest expense related to this loan during the year ended December 31, 2012. In future periods this expense will decline over the term of the loan as the principal is reduced.

Liquidity

As of December 31, 2012, the Company's cash and cash equivalents totaled $9.7 million compared to $23.4 million as of December 31, 2011. The decrease in cash and cash equivalents is primarily the result of cash utilization to fund operations during the year-ended 2012 offset by the receipt of CND $8.3 million from Warburg Pincus under their Investment Agreement. The Company expects that its current cash and cash equivalents will be sufficient to fund its operations into the third quarter of 2013.

Change in Auditors

The Company also announces that, in connection with the relocation of the head office of the Company to San Diego, California it has changed its auditor from PricewaterhouseCoopers LLP (Canada) ("PwC Canada") to PricewaterhouseCoopers LLP (U.S.) ("PwC U.S."). PwC Canada has resigned effective as of January 10, 2013 and PwC U.S. has been appointed as auditor of the Company effective as of the same date. PwC U.S. provided the audit report on the Company's financial statements for the year ended December 31, 2012. The change in auditor has been approved by the Company's Audit Committee and Board of Directors.

For complete financial results, please see the Company's filings at www.sedar.com.

About Sophiris

Sophiris Bio Inc. is a biopharmaceutical company developing a treatment for benign prostatic hyperplasia (BPH or enlarged prostate), which it believes is an unsatisfied market with significant market potential. PRX302, the Company's lead candidate for BPH, is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects experienced with existing treatments. Sophiris is planning to begin the first of two pivotal clinical trials of PRX302 in the first half of 2013. 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. Consolidated Statements of Operations, Comprehensive Loss and Deficit (Stated in United States Dollars)
			For the three months ended December 31,		For the three months ended December 31,		For the year ended December 31,		For the year ended December 31,
			2012		2011		2012		2011
			$		$		$		$
Expenses
Research and development			3,329,180		4,119,227		13,523,050		8,659,806
General and administrative			1,343,167		1,043,867		5,685,160		4,635,180
			4,672,347		5,163,094		19,208,210		13,294,986
Other income (expense)
Interest income			15,367		5,275		108,642		55,306
Interest expense			(438,496)		(524,344)		(1,958,490)		(946,201)
Loss on disposal of assets			(869)		-		(869)		(11,648)
Foreign exchange loss			(227,391)		(6,260)		(105,068)		(13,128)
			(651,389)		(525,329)		(1,955,785)		(915,671)
Net loss for the period			(5,323,736)		(5,688,423)		(21,163,995)		(14,210,657)
Other comprehensive income
Currency translation adjustments			23,415		217,118		131,263		13,923
Total comprehensive loss for the period			(5,300,321)		(5,471,305)		(21,032,732)		(14,196,734)
Deficit - Beginning of the period			(68,353,612)		(46,824,930)		(52,513,353)		(38,302,696)
Deficit - End of the period			(73,677,348)		(52,513,353)		(73,677,348)		(52,513,353)
Basic and diluted loss per share			(0.03)		(0.05)		(0.13)		(0.12)
Weighted average number of outstanding shares-
	Basic and diluted		163,793,203		122,805,885		158,784,096		121,960,122

 

Sophiris Bio Inc. Consolidated Statements of Financial Position (Stated in United States Dollars)
							December 31, 2012 $		Restated December 31, 2011 $
Assets
Current assets
	Cash and cash equivalents						9,720,941		23,410,478
	Other receivables						71,408		238,906
	Deferred financing costs						936,759		-
	Prepaid expenses						447,053		284,770
							11,176,161		23,934,154
Non-current assets
	Property and equipment						162,762		219,740
	Intangible assets						-		316,099
	Other long term assets						44,313		29,495
Total assets							11,383,236		24,499,488
Liabilities
Current liabilities
	Accounts payable and accrued liabilities						4,612,650		3,101,548
	Current portion of secured promissory notes						5,894,566		14,456,768
							10,507,216		17,558,316
Long-term secured promissory notes							6,006,360		-
Shareholders' equity
	Common shares						54,490,667		48,073,120
	Common share purchase warrants						7,794,478		5,926,762
	Contributed surplus						6,307,944		5,631,987
	Currency translation adjustments						(46,081)		(177,344)
	Deficit						(73,677,348)		(52,513,353)
	Total shareholders' (deficit) equity						(5,130,340)		6,941,172
Total liabilities and shareholders' equity							11,383,236		24,499,488

 

 

Sophiris Bio Inc. Consolidated Statements of Cash Flows (Stated in United States Dollars)
		For the year ended December 31, 2012 $		For the year ended December 31, 2011 $
Cash flows used in operating activities
Net loss for the period		(21,163,995)		(14,210,657)
Items not affecting cash:
	Stock-based compensation	675,957		915,432
	Accretion expense	633,692		285,159
	Depreciation of property and equipment	81,810		44,328
	Amortization of intangible assets	149,222		201,605
	Impairment loss	175,766		-
	Loss on disposal of assets	869		11,648
	Unrealized foreign exchange gain	(147,924)		(23,631)
	Interest expense	1,324,798		661,042
	Interest income	(108,643)		(55,306)
Change in non-cash working capital:
	Other receivables	171,985		72,459
	Prepaid expenses	(161,992)		(272,750)
	Other long term assets	(14,659)		(29,665)
	Accounts payable and accrued liabilities	1,512,543		1,085,245
	Deferred financing costs	(935,869)		-
Net cash flows used in operating activities		(17,806,440)		(11,315,091)
Cash flows provided by (used in) investing activities
Interest received		108,643		55,306
Purchase of property and equipment		(25,671)		(265,467)
Proceeds from the disposal of equipment		-		11,424
Net cash flows provided by (used in) investing activities		82,972		(198,737)
Cash flows provided by financing activities
Cash received on issuance of promissory notes		-		14,645,048
Issuance of common shares from private placement		-		-
	- net of issurance costs paid	8,285,262		8,136,666
Issuance of common shares on exercise of warrants		-		77,895
Issuance of common shares on exercise of stock options		-		302,481
Principal payments on notes payable		(3,189,538)		-
Interest paid		(1,350,049)		(542,292)
Net cash flows provided by financing activities		3,745,675		22,619,798
Effect of exchange rate changes on cash
	and cash equivalents	288,256		(76,729)
Net (decrease) increase in cash and cash equivalents		(13,689,537)		11,029,241
Cash and cash equivalents - Beginning of the period		23,410,478		12,381,237
Cash and cash equivalents - End of the period		9,720,941		23,410,478

 

SOURCE: Sophiris Bio, Inc.

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