IntelliPharmaCeutics International Inc. Announces Third Quarter 2009 Results of IntelliPharmaCeutics Ltd.

TORONTO, Nov. 12 /CNW/ - IntelliPharmaCeutics International Inc. (NASDAQ:IPCI; TSX:I) today reported the results of operations for the three and nine months ended September 30, 2009 of IntelliPharmaCeutics Ltd., (the "Predecessor Company") . The company is filing the September 30, 2009 financial statements of IntelliPharmaCeutics Ltd., in accordance with Section 4.10(2)(a) of 51-102 which provides that all financial statements be filed for all annual and interim periods ending before the date of the reverse takeover and after the date of the financial statements included in the information circular or similar document prepared in connection with the transaction. All dollar amounts referenced herein are in United States dollars unless otherwise noted.

The net loss for the third quarter of 2009 was $165,739, or $0.01 per common share, compared with a net loss of $915,596, or $0.05 per common share for the same period in 2008. We incurred a net loss for the nine months ended September 30, 2009 of $963,411, or $0.06 per common share, compared with a net loss of $1,683,184, or $0.10 per common share for the same period in 2008. The decreased loss for the three and nine months ended September 30, 2009 is due to initiatives taken by us to lower operating expenses. Cost reduction initiatives included a decrease in wages and benefits for both administrative and research and development staff as well as a reduction in overall staffing levels.

At September 30, 2009, our cash totaled $10,883, compared with $902,213 at December 31, 2008 and $25,518 at June 30, 2009. Our net cash used in operating activities for the three and nine months ended September 30, 2009 has been offset by advances from Dr. Isa Odidi and Dr. Amina Odidi, principal stockholders, directors and executive officers.

Corporate Update

    -   On October 22, 2009 we announced the completion of our previously
        announced plan of arrangement with Vasogen Inc.. The shareholders of
        IntelliPharmaCeutics Ltd. and Vasogen Inc. approved this transaction
        at their respective shareholder meetings on October 19, 2009. All
        court and regulatory approvals required to effect the arrangement
        have been received. The arrangement resulted in IntelliPharmaCeutics
        Ltd. and IntelliPharmaCeutics Corp. combining with 7231971 Canada
        Inc., a new Vasogen company that acquired substantially all of the
        assets of Vasogen Inc., including the $7.5 million in gross proceeds
        from its non-dilutive financing transaction with Cervus LP. As a
        result of this transaction, former shareholders of
        IntelliPharmaCeutics Ltd. own approximately 86% of the outstanding
        common shares of IPC and former shareholders of Vasogen Inc. own
        approximately 14% of the outstanding common shares of IPC.

    -   In connection with the transaction that was completed on October 22,
        2009 IntelliPharmaCeutics International Inc. received approximately
        $10.0 million in Net Cash as defined in the arrangement agreement
        with Vasogen Inc. that will be used to fund our operations and
        portfolio of NDA and ANDA products.

IPC Overview

Using our proprietary technologies, our strategy involves the development of products for partners and the development and manufacture of our own proprietary products. Currently, we have 15 products in our pipeline at varying stages of development and regulatory review. Several of these product candidates have been partnered under drug development arrangements which have or provide for milestone and success fees, support for internal development costs, coverage of clinical trial costs, coverage of patent litigation costs, and royalties or profit sharing on product sales. We apply our proprietary delivery platform technology and expertise in pharmaceutics, drug delivery, and drug manufacture with the goal of minimizing the risk, time, and manufacturing cost of bringing the finished product to market.

Our lead products in the generic, controlled-release pharmaceutical category are Dexmethylphenidate XR (dexmethylphenidate hydrochloride), a generic version of Focalin XR(R), which is an extended-release capsule for the treatment of Attention Deficit Hyperactivity Disorder, and Carvedilol CR (carvedilol phosphate), a generic version of Coreg CR(R), which is an extended release capsule for the treatment of high blood pressure. In 2008, Focalin(R), including Focalin XR(R), had U.S. sales of approximately U.S. $350 million, and Coreg(R), including Coreg CR(R), had U.S. sales of approximately U.S. $300M million.

One of our key non-generic products is an abuse- and alcohol-resistant, controlled-release oral oxycodone formulation. This product is covered by pending patent applications for its novel ReXista(TM) abuse- and alcohol-resistant drug delivery technology. The product is a unique dosage form, designed to be resistant to abuse by oral ingestion when crushed or chewed, by injection when combined with solvents, and by nasal inhalation when crushed or powdered. The abuse of this important pain relief drug has been well documented over many years. In 2008, Oxycodone had U.S. sales of approximately U.S. $2 billion. The product is also designed to resist release of the entire dose when consumed with alcohol, a significant problem with some opioid drugs, such as hydromorphone.

Certain statements in this document constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and/or "forward-looking information" under the Securities Act (Ontario). These statements include, without limitation, statements regarding the status of development, or expenditures relating to our business, plans to fund our current activities, statements concerning our partnering activities, health regulatory submissions, strategy, future operations, future financial position, future revenues and projected costs. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimated", "predicts", "potential", "continue", "intends", "could", or the negative of such terms or other comparable terminology. We made a number of assumptions in the preparation of these forward-looking statements. You should not place undue reliance on our forward-looking statements, which are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances or events to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, securing and maintaining corporate alliances, the need for additional capital and the effect of capital market conditions and other factors, including the current status of our programs, on capital availability, the potential dilutive effects of any financing and other risks detailed from time to time in our public disclosure documents or other filings with the securities commissions or other securities regulatory bodies in Canada and the U.S. Additional risks and uncertainties relating to IPC and our business can be found in the "Risk Factors" section of our joint management information circular dated September 16, 2009, as well as in our other public filings. The forward-looking statements are made as of the date hereof, and we disclaim any intention and have no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The unaudited interim consolidated financial statements, accompanying notes to the unaudited interim consolidated financial statements, and Management's Discussion and Analysis for the three and nine months ended September 30, 2009, will be accessible on IntelliPharmaCeutics Website at www.intellipharmaceutics.com and will be available on SEDAR and EDGAR.

Summary financial tables are provided below.

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    INTELLIPHARMACEUTICS LTD.

    Interim Consolidated Balance Sheets
    (Stated in U.S. dollars; Unaudited)

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    As at                                         September 30,  December 31,
                                                          2009          2008
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    Assets

    Current assets:
      Cash                                        $     10,883  $    902,213
      Accounts receivable                               20,526        40,182
      Investment tax credits                         1,612,094       871,784
      Deferred costs                                   614,605             -
      Prepaid expenses and sundry assets                60,736        77,197
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                                                     2,318,844     1,891,376

    Property and equipment, net                        970,734     1,134,648
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                                                  $  3,289,578  $  3,026,024
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    Liabilities and Shareholders' (Deficiency)
     Equity

    Current liabilities:
      Accounts payable                            $    829,618  $    328,477
      Accrued liabilities                              530,966       315,864
      Current portion of capital lease obligations      36,140        32,285
      Deferred revenue                                 458,656       497,149
      Due to related parties                         2,303,258       925,830
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                                                     4,158,638     2,099,605

    Capital lease obligations                           18,280        39,305

    Deferred revenue                                 1,152,016     1,470,189
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                                                     5,328,934     3,609,099
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    Shareholders' deficiency:
      Capital stock
        Authorized:
          20,000,000 Special Voting Shares,
           $0.001 par value
          40,000,000 common shares, $0.001 par
           value
        Issued and outstanding:
          10,850,000 Special Voting Shares
           (2008-10,850,000)                            10,850        10,850
          6,023,944 common shares (2008 -
           6,023,944)                                    6,024         6,024
      Additional paid-in capital                    10,482,120    10,482,120
      Accumulated other comprehensive income          (107,223)      385,647
      Deficit                                      (12,431,127)  (11,467,716)
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                                                    (2,039,356)     (583,075)
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                                                  $  3,289,578  $  3,026,024
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    INTELLIPHARMACEUTICS LTD.

    Interim Consolidated Statements of Operations and Comprehensive Loss
    (Stated in U.S. dollars; Unaudited)

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                           Three months ended          Nine months ended
                              September 30                September 30
                           2009          2008          2009          2008
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    Revenue:
      Research and
       development    $    125,590  $    180,388  $    468,422  $  1,159,964
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                      $    125,590  $    180,388  $    468,422  $  1,159,964
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    Expenses:
      Cost of Revenue       86,773       374,712       200,970     1,106,934
      Research and
       development         156,583        82,254       816,599       242,985
      Selling, general
       and
       administrative
       costs               238,012       363,554       560,159       740,965
      Depreciation          98,480       132,965       300,129       465,265
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                           579,848       953,485     1,877,857     2,556,149
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    Loss before the
     undernoted           (454,258)     (773,097)   (1,409,435)   (1,396,185)

    Foreign exchange
     gain (loss)           321,750      (136,681)      508,380      (296,982)

    Interest income             49        12,153         1,566        70,454

    Interest expense       (33,280)      (17,971)      (63,922)      (60,471)
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    Net Loss for the
     period               (165,739)     (915,596)     (963,411)   (1,683,184)

    Comprehensive Items:
      Foreign exchange
       translation
       adjustment         (324,720)       63,499      (492,870)       74,232
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    Comprehensive
     loss             $   (490,459) $   (852,097) $ (1,456,281) $ (1,608,952)
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    Loss per share,
     basic and
     diluted          $      (0.01) $      (0.05) $      (0.06) $      (0.10)
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    Weighted average
     number of common
     shares and
     Special Voting
     Shares
     outstanding,
     basic and diluted  16,873,944    16,873,944    16,873,944    16,873,944
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For further information: Graham Neil, Investor Relations, 30 Worcester Road, Toronto, M9W 5X2, tel: (416) 798-3001, fax: (416) 798-3007, www. intellipharmaceutics.com, investors@intellipharmaceutics.com