Thallion Pharmaceuticals Inc. (TSX VENTURE:TLN) today announced its operational
and financial results for the three-month and twelve-month periods ended
November 30, 2012.
"This is a transformative period for Thallion as we explore new strategic
opportunities that could benefit from our experienced team and our strong cash
position and balance sheet," said Dr. Allan Mandelzys, Chief Executive Officer
of Thallion Pharmaceuticals Inc. "The Special Committee of the Board is working
closely with our external advisors to help identify and evaluate potential
corporate opportunities, and to maximize the full value of our assets for the
benefit of all shareholders."
Operational Highlights
-- Terminated the development and license agreement related to the
Shigamabsr program with LFB Biotechnologies, subsequent to year end.
-- Established a Special Committee comprised of independent directors of
the Board to conduct both a strategic review of the Company and to
identify and evaluate potential corporate opportunities, subsequent to
year end. The Special Committee has engaged an investment bank to assist
them in this process.
-- Received positive binding Final Award from the International Chamber of
Commerce International Court of Arbitration, concluding that all claims
for damages by TLN-232 licensor, Expergen GmbH Drug Development, have
been rejected, subsequent to year end.
-- Voluntarily delisted from the Toronto Stock Exchange and commenced
trading of its common shares on the TSX Venture Exchange on December 12,
2012, under the symbol "TLN".
-- Announced the sale of Caprion Proteomics Inc, including Thallion's
equity stake in the business, resulting in immediate cash proceeds of
approximately $3.9 million, with the potential for future consideration
of approximately $0.6 million, currently held in escrow.
-- Completed the core study of the SHIGATEC Phase II trial and announced
that the primary endpoint of safety and tolerability had been met.
Financial Highlights
Collaboration and licensing revenues for the three-month and twelve-month
periods ended November 30, 2012, were $31,356 and $1,414,692 respectively,
compared to $578,177 and $3,205,428 for the corresponding periods in 2011. The
decreases in revenues are primarily due to the anticipated decline in research
and development expenses related to clinical development of Shigamabs(R).
Research and development (R&D) expenses before tax credits for the three-month
and twelve-month periods ended November 30, 2012 were $337,121 and $2,707,943,
respectively. This represents a 79% decrease in R&D costs from $1,569,263 in the
three-month period ended November 30, 2011, and a 44% decrease in R&D costs from
$4,872,869 in the twelve-month period ended November 30, 2011. These decreases
are primarily the result of the anticipated reduction in the SHIGATEC clinical
trial expenditures as the majority of patient recruitment had been completed by
January 2012 and the lower costs associated with the extension phase relative to
the core phase of the study.
General and administrative (G&A) expenses for the three-month and twelve-month
periods ended November 30, 2012 were $347,134 and $2,143,804, respectively,
compared with $691,863 and $2,594,773 for the corresponding periods in 2011.
These decreases are primarily the result of reversing the $276,404 balance of
provision for litigation, as well as reduced legal fees for corporate related
activities and ongoing cost reduction efforts.
The Company recorded a net loss of $513,771 or $0.02 per share in the fourth
quarter of 2012 and net earnings of $1,649,545 or $0.05 per share in the
twelve-month period ended November 30, 2012, primarily as a result of the
$4,460,729 one-time gain recorded on the disposal of the Company's equity
investment in Caprion Proteomics Inc.
Excluding this one-time gain, the Company recorded an adjusted net loss of
$2,811,184 or $0.09 per share in 2012, compared with a net loss of $4,032,492 or
$0.13 per share in 2011, reflecting a decrease of $1,221,008 or 30%
year-over-year. This improvement in net loss is mainly attributable to reduced
R&D expenditures based on completion of the core Phase II SHIGATEC study in
January 2012, lower G&A expenditures and higher foreign exchange gains
recognized in 2012 as a result of changes in the fair value of foreign exchange
forward contracts, partially offset by the lower collaboration and licensing
revenues.
As at November 30, 2012, the Company's unrestricted cash position amounted to
$10,360,808, which consists of cash and short-term investments. The Company's
liquidity availability amounted to $10,684,122 as at November 30, 2012, compared
with $8,533,803 on November 30, 2011. Furthermore, the Company's working capital
amounted to $10,705,174 as at November 30, 2012 compared to $6,337,693 as at
November 30, 2011.
The increases in liquidity and working capital are primarily due to the one-time
gain from the sale of the Company's equity investment in Caprion Proteomics Inc.
in July 2012 as well as the Shigamabs(R) development funding received from LFB,
partially offset by the reduction of current liabilities and the use of cash
related to operations in 2012. The Company believes that its cash position will
be sufficient to finance its reduced research and development expenditures,
operations and capital requirements for at least the next twelve months.
As of February 20, 2013, the Company had 32,194,566 common shares outstanding
and a total of 3,676,450 stock options.
About Thallion Pharmaceuticals Inc.
Thallion Pharmaceuticals Inc. (TSX VENTURE:TLN) is a biotechnology company
developing pharmaceutical products in the areas of infectious disease and
oncology. The Company's clinical programs include Shigamabs(R) and TLN-4601, a
novel anti-cancer therapy. Shigamabs(R) is a dual antibody product being
evaluated in a Phase II clinical trial for the treatment of Shiga
toxin-producing E. coli bacterial infections. Additional information about
Thallion can be obtained at www.thallion.com.
Forward-Looking Statements
This press release contains certain forward-looking statements, including,
without limitation, statements containing the words "believe", "may", "plan",
"will", "estimate", "continue", "anticipate", "intend", "expect" and other
similar expressions which constitute "forward-looking information" within the
meaning of applicable Canadian securities laws. Forward-looking statements
reflect Thallion's current expectation and assumptions, and are subject to a
number of risks and uncertainties that could cause actual results to differ
materially from those anticipated. These forward-looking statements involve
risks and uncertainties including, but not limited to, risks relating to the
development of the Shigamabs(R) clinical program and the outcome of the
strategic review process. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements.
Thallion undertakes no obligation to publicly update or revise any
forward-looking statements either as a result of new information, future events
or otherwise, except as required by applicable Canadian securities laws.
Financial results included below:
THALLION PHARMACEUTICALS INC.
Consolidated Statements of Financial Position
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November 30, November 30, December 1,
2012 2011 2010
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Assets
Current assets:
Cash $ 7,236,228 $ 5,005,687 $ 6,228,340
Short-term investments 3,124,580 3,284,428 4,026,441
Foreign exchange forward
contracts 13,275 103,445 175,082
Sales tax receivable and other
assets 28,650 10,270 120,801
Tax credits receivable 323,314 243,688 434,066
Receivable from Premium Brands
Holdings Corporation - - 292,249
Balance of sale receivable 605,675 - -
Deposits and prepaid expenses 153,553 233,774 436,043
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11,485,275 8,881,292 11,713,022
Restricted cash 1,000,000 1,000,000 1,000,000
Property and equipment 36,306 42,269 55,204
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1,036,306 1,042,269 1,055,204
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$ 12,521,581 $ 9,923,561 $ 12,768,226
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Liabilities and Equity
Current liabilities:
Trade and other payables $ 780,101 $ 2,210,613 $ 3,037,971
Provisions - 332,986 789,132
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780,101 2,543,599 3,827,103
Deferred revenues 9,656,256 7,001,794 4,610,503
Equity:
Share capital 115,512,823 115,512,823 115,512,823
Warrants 1,375,000 1,375,000 1,375,000
Contributed surplus 20,367,972 20,310,461 20,230,421
Deficit (135,170,571) (136,820,116) (132,787,624)
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Equity attributable to equity
holders of the Company 2,085,224 378,168 4,330,620
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$ 12,521,581 $ 9,923,561 $ 12,768,226
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Earnings (Loss) and Comprehensive Income (Loss)
Years ended November 30, 2012 and 2011
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November 30, November 30,
2012 2011
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Revenues
Collaboration and licensing revenues $ 1,414,692 $ 3,205,428
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Expenses
Research and development 2,707,943 4,872,869
Tax credits (400,194) (315,381)
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2,307,749 4,557,488
General and administrative 2,143,804 2,594,773
Write-off of asset held for sale and
subsequent reversal
of impairment loss (25,331) 63,575
Finance (income) costs
Interest income (61,349) (57,912)
Foreign exchange loss (gain) 103,382 (20,380)
Changes in fair value of foreign exchange
forward contracts (242,379) 100,376
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4,225,876 7,237,920
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Net operating loss before the following item (2,811,184) (4,032,492)
Gain on disposal of investment in Caprion
Proteomics Inc. 4,460,729 -
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Net earnings (loss) and comprehensive income
(loss) attributable to equity holders of the
Company $ 1,649,545 $ (4,032,492)
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Basic and diluted earnings (loss) per share $ 0.05 $ (0.13)
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Weighted average number of outstanding shares 32,194,566 32,194,566
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THALLION PHARMACEUTICALS INC.
Consolidated Statements of Cash Flows
Years ended November 30, 2012 and 2011
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November 30, November 30,
2012 2011
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Cash flows used in operating activities:
Net earnings (loss) $ 1,649,545 $ (4,032,492)
Adjustments for:
Depreciation 14,242 20,453
Interest income (61,349) (57,912)
Interest received 63,437 39,244
Gain on disposal of property and equipment - (22,897)
Gain on disposal of investment in Caprion
Proteomics Inc. (4,460,729) -
Write-off of asset held for sale and
subsequent reversal of impairment loss (25,331) 63,575
Effect of exchange rate fluctuations on cash
held 208,877 18,538
Reversal of provisions (276,404)
Decrease in fair value of open foreign
exchange
forward contracts 90,170 71,637
Stock-based compensation 57,511 80,040
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(2,740,031) (3,819,814)
Changes in operating assets and liabilities:
Sales tax receivable and other assets (20,468) 65,624
Tax credits receivable (79,626) 190,378
Balance of sale receivable (4,606) -
Receivable from Premium Brands Holdings
Corporation - 292,249
Deposits and prepaid expenses 80,221 202,269
Trade and other payables (1,430,512) (827,358)
Provisions (56,582) (456,146)
Deferred revenues 2,654,462 2,391,291
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1,142,889 1,858,307
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(1,597,142) (1,961,507)
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Cash flows from investing activities:
Proceeds from disposal of investment in
Caprion Proteomics Inc. 3,859,660 -
Acquisition of short-term investments (2,040,152) (2,049,949)
Proceeds from disposal/maturity of short-term
investments 2,200,000 2,791,962
Additions to property and equipment (8,279) (7,518)
Proceeds from disposal of property and
equipment 25,331 22,897
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4,036,560 757,392
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Net increase (decrease) in cash 2,439,418 (1,204,115)
Cash, beginning of the year 5,005,687 6,228,340
Effect of exchange rate fluctuations on cash
held (208,877) (18,538)
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Cash, end of the year $ 7,236,228 $ 5,005,687
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FOR FURTHER INFORMATION PLEASE CONTACT:
Thallion Pharmaceuticals Inc.
Michael Singer
Chief Financial Officer
(514) 940-3610
(514) 336-2343 (FAX)
info@thallion.com
www.thallion.com
Thallion Pharmaceuticals (TSXV:TLN)
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