Akela Pharma reports results for the first quarter of fiscal 2009
www.akelapharma.com
Toronto Stock Exchange Symbol: AKL
MONTREAL, May 15 /CNW Telbec/ - Akela Pharma Inc. (TSX: AKL) a drug
development company focused on developing an inhaled fentanyl product
(Fentanyl Taifun(R)) for breakthrough cancer pain and a growth hormone
releasing hormone (GHRH) for chronic renal disease, today announced its
financial results for the three months ended March 31, 2009.
Akela's consolidated revenue and net loss for the three months ended
March 31, 2009 was $3.8 million and $2.6 million, respectively.
During the first quarter of 2009, we initiated and completed several
measures to preserve cash. In February we executed a cost reduction plan which
targets Akela's development programs, as well as its service business,
PharmaForm. In March we agreed to accept $2,000 Cdn ($1,562 US) and 500,000
common stock purchase warrants from LAB Research Inc. as settlement for a
lawsuit relating to a failed Fentanyl TAIFUN(R) toxicology study. On March
27th we announced the execution of an arrangement agreement to combine Akela
Pharma and Nventa Biopharmaceuticals ("Nventa") which is expected to close in
May 2009, subject to the satisfaction of certain customary closing conditions,
including Nventa shareholder approval and a minimum amount of $1,500 Cdn of
net cash in Nventa.
Financial Results
Total consolidated revenues for the first quarter of 2009 were $3.8
million, including $0.9 million in co-development fees and $2.8 million of
contract services. Total consolidated revenues for the first quarter of 2008
were $3.9 million, including $0.5 million in co- development fees and $3.3
million of contract services. The reduction in contract services revenue
reflects decreased product development spending by the biotech segment of its
customer base.
Consolidated net loss for the first quarter of 2009 was $2.6 million or
($0.12) per share. Consolidated net loss for the first quarter of 2008 was
$4.4 million or ($0.36) per share. The consolidated net loss for the first
quarter of 2009 reflects one time gains resulting from the Company's
settlement with LRI, $1.7 million, one time charges associated with Company's
cost reduction plan, $0.7 million, and a provision for repayment of government
grants, $1.5 million. Excluding these items, Akela's consolidated net loss was
$2.1 million or ($0.10) per share.
Consolidated SG&A expenses totalled $1.4 million for the first quarter of
2009 compared to $2.1 million for the first quarter of 2008. This decline
relates to a number of initiatives implemented as a result of the Company's
cost reduction plan announced in February 2009, including a 45% reduction in
the Akela administrative staff and the imposition of severe limits on non core
spending.
R&D for the three months ended March 31, 2009 decreased to $1.4 million
from $2.6 million for the same period in 2008 as a direct result of the
Company's cost reduction effort. As part of this initiative, management has
decided to continue the Fentantyl Taifun(R) program with focused scope by
limiting the size and the number of clinical trial sites with no new enrolment
ongoing currently. The Company has terminated its licensing agreement to CGRP,
and the GHRH program has been placed on hold until an out-licensing agreement
or program specific financing is secured.
The Company had a cash balance of $3.1 million as of March 31, 2009
compared with $2.3 million as of December 31, 2008.
2009 First Quarter Operational Highlights
- In February 2009, Akela undertook measures to cut costs in order to
preserve cash for its continued operations. The reduction in costs is
targeted to Akela's development programs, as well as its service
business, PharmaForm. Akela's product development activities have
been curtailed and confined exclusively to Fentanyl TAIFUN(R).
Phase III clinical trials are now concentrated on a limited size and
number of sites with no new enrolment ongoing currently.
- On March 10, 2009, Akela agreed to accept a payment of $2,000 Cdn
($1,562 US) and 500,000 warrants with an exercise price of $0.50 Cdn
($0.39 US) from LAB Research Inc. as full and final settlement of its
lawsuit relating to a failed Fentanyl TAIFUN(R) toxicology study.
- On March 27, 2009, Akela Pharma and Nventa Biopharmaceuticals
("Nventa") announced the execution of an arrangement agreement to
combine the two companies by way of a plan of arrangement under the
Business Corporations Act (British Columbia). The transaction is
expected to close in May 2009, subject to the satisfaction of certain
customary closing conditions, including Nventa shareholder approval and
a minimum amount of $1,500 Cdn of net cash in Nventa.
- On May 11, 2009, Akela announced that the Administrative Court of Turku
had rejected an appeal filed by the Company's Finnish subsidiary
("Akela Pharma Oy") to overturn a demand by the Finnish Funding Agency
for Technology and Innovation ("Tekes") for repayment of certain grants
obtained by Akela Pharma Oy. In light of probable losses associated
with this event, the Company recorded a one time charge of $1,544 which
is the US dollar equivalent of the grants received $1,269 ((euro)956),
together with interest of $275 ((euro)207) from July 2007 through
March 31, 2009, which results in a negative effect on earnings per
share of approximately ($0.07) per share. The Company intends to file
an appeal against this ruling on behalf of Akela Pharma Oy with the
Supreme Administrative Court; however, there can be no assurance that
the ruling of the Administrative Court of Turku will be overturned.
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. Akela's
pipeline also includes a growth hormone releasing hormone (GHRH), which is
being developed for frailty and wasting in chronic renal disease. The product
is also suitable for other chronic diseases involving a catabolic state and
wasting. PharmaForm, Akela's wholly owned subsidiary, is a leading specialty
contract service provider offering a portfolio of innovative technologies in
drug product development, manufacturing and analytical testing to the
pharmaceutical and biotechnology industries. Through its diverse offerings,
PharmaForm solutions help clients reduce development costs and accelerate
time-to-market.
Akela's common shares trade on The Toronto Stock Exchange ("TSX") under
the symbol "AKL" with 21.6 million shares outstanding.
This news release contains certain forward-looking statements that
reflect the current views and/or expectations of Akela Pharma Inc. with
respect to its performance, business and future events. Such statements
are subject to a number of risks, uncertainties and assumptions. Actual
results and events may vary significantly.
AKELA PHARMA INC.
Consolidated Balance Sheets
(Unaudited)
March 31, 2009 and December 31, 2008
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
March 31, December 31,
2009 2008
-------------------------------------------------------------------------
Assets
Current assets:
Cash $ 3,089 $ 2,345
Restricted cash 600 600
Accounts receivable 2,811 6,070
Prepaid expenses and other current assets 600 346
-----------------------------------------------------------------------
7,100 9,361
Restricted cash and deposits 1,258 1,258
Property and equipment 4,938 5,229
Intangible assets 4,331 4,755
Goodwill 6,457 6,457
Other assets 1,638 1,397
-------------------------------------------------------------------------
$ 25,722 $ 28,457
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 8,784 $ 7,917
Deferred revenue 4,464 4,515
Current portion of long-term debt 1,260 1,311
-------------------------------------------------------------------------
14,508 13,743
Deferred revenue 15,628 16,266
Long-term debt 4,588 4,894
Shareholders' equity:
Common shares (unlimited authorized,
21,615,577 common shares issued and
outstanding with no par value at March 31,
2009 and December 31, 2008) 66,346 66,346
Warrants 2,814 2,814
Additional paid-in capital 8,182 8,105
Accumulated other comprehensive income 3,110 3,110
Deficit (89,454) (86,821)
-----------------------------------------------------------------------
(86,344) (83,711)
Total shareholders' equity (9,002) (6,446)
-------------------------------------------------------------------------
$ 25,722 $ 28,457
-------------------------------------------------------------------------
-------------------------------------------------------------------------
AKELA PHARMA INC.
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
Three months ended March 31, 2009 and 2008
(in thousands of US dollars, except share and per share data)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended
March 31,
--------------------------
2009 2008
-------------------------------------------------------------------------
Revenues $ 3,770 $ 3,870
Expenses:
Direct costs 2,068 1,688
Selling, general and administrative 1,434 2,093
Research and development 1,389 2,572
Restructuring costs 676 -
Stock-based compensation 77 170
Depreciation of property and equipment 372 463
Amortization of intangible assets 423 744
Interest on long-term debt 37 31
Unrealized loss on securities held for trading 87 -
Foreign exchange (gain) loss (40) 531
-------------------------------------------------------------------------
6,523 8,292
Loss before under noted items (2,753) (4,422)
Other income (expense):
Settlement with LRI 1,664 -
Provision for repayment of government grants (1,544) -
-----------------------------------------------------------------------
Loss before income taxes (2,633) (4,422)
Recovery of income taxes:
Current - -
Future - 46
-----------------------------------------------------------------------
- 46
-------------------------------------------------------------------------
Net loss and comprehensive loss $ (2,633) $ (4,376)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted net loss per share $ (0.12) $ (0.36)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted weighted average
number of shares outstanding 21,615,577 12,261,042
-------------------------------------------------------------------------
-------------------------------------------------------------------------
AKELA PHARMA INC.
Consolidated Statement of Shareholders' Equity
(Unaudited)
Three months ended March 31, 2009
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Common Shares Additional
----------------------- Paid-in
Number Dollars Warrants Capital
-------------------------------------------------------------------------
Balance, December 31,
2008 21,615,577 $ 66,346 $ 2,814 $ 8,105
Stock-based compensation - - - 77
Net loss - - - -
-------------------------------------------------------------------------
Balance, March 31, 2009 21,615,577 $ 66,346 $ 2,814 $ 8,182
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accumulated
other
comprehensive
income Deficit Total
-------------------------------------------------------------------------
Balance, December 31,
2008 $ 3,110 $ (86,821) $ (6,446)
Stock-based compensation - - 77
Net loss - (2,633) (2,633)
-------------------------------------------------------------------------
Balance, March 31, 2009 $ 3,110 $ (89,454) $ (9,002)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
AKELA PHARMA INC.
Consolidated Statements of Cash Flows
(Unaudited)
Three months ended March 31, 2009 and 2008
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended
March 31,
--------------------------
2009 2008
-------------------------------------------------------------------------
Cash flows from operating activities:
Net loss $ (2,633) $ (4,376)
Adjustments for:
Depreciation of property and equipment 372 463
Amortization of intangible assets 423 744
Provision for repayment of government grants 1,544 -
Restructuring charges 571 -
Stock-based compensation 77 170
Unrealized foreign exchange (gain) loss (43) 820
Unrealized loss on securities held for trading 87 -
Future income taxes - (46)
Net changes in operating assets and liabilities 1,300 (5)
-------------------------------------------------------------------------
1,698 (2,230)
Cash flows from financing activities:
Repayments of long-term debt (162) (219)
Proceeds from issuance of units - 10,200
Unit issue costs - (1,050)
-------------------------------------------------------------------------
(162) 8,931
Cash flows from investing activities:
Acquisition of property and equipment (792) (531)
Addition to intangible assets - (21)
-------------------------------------------------------------------------
(792) (552)
Net increase in cash 744 6,149
Cash, beginning of period 2,345 6,688
-------------------------------------------------------------------------
Cash, end of period $ 3,089 $ 12,837
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For further information: Dr. Taneli Jouhikainen, Acting CEO of Akela,
(512) 834-0449, ext. 275; www.akelapharma.com
RSS
Share
Tell a friend
Printer friendly
Subscribe to Portfolio e-mail
