BELLUS HEALTH REPORTS RESULTS FOR FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2010

LAVAL, QC, Feb. 23 /CNW Telbec/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS Health" or the "Company") reported today its financial results for the fourth quarter and year ended December 31, 2010. All currency figures reported in this press release, including comparative figures, are in CDN dollars, unless otherwise specified.

"Our new business model has delivered substantial results in 2010," said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "We continued to add value to the products in our pipeline, particularly KIACTA™ which has started its confirmatory Phase III trial. We have also significantly reduced our burn rate through the implementation of our strategic initiatives to limit our operating costs. We intend to carry on this path in 2011 to continue building value for our shareholders," Mr. Bellini added.

Financial Results

For the fourth quarter ended December 31, 2010, the Company recorded a net loss of $3,817,000 ($0.02 per share), compared to $5,662,000 ($0.03 per share) for the corresponding quarter the previous year. For the year ended December 31, 2010, the net loss amounted to $20,113,000 ($0.10 per share), compared to a net loss of $8,790,000 ($0.06 per share) for the same period last year. 

The decrease in net loss for the fourth quarter ended December 31, 2010, compared to the corresponding quarter the previous year, is primarily due to revenue recorded in 2010 in relation to the KIACTA™ asset sale and license agreement and sale of OVOS Natural Health Inc. ("OVOS Natural Health"), as well as a decrease in research and development expenses. The significant variation between the net loss for the years ended December 31, 2010 and 2009, is mainly attributable to items recorded in the second quarter of 2009 in relation to the Company's refinancing that took place in April 2009. During that quarter, the Company recorded a gain on extinguishment of debt in the amount of $20,530,000 resulting from amendments to the terms of the convertible notes issued in 2006 and 2007, as well as a net credit for vacant space in the amount of $2,277,000 in relation to the vacant portion of the Company's premises.

As at December 31, 2010, the Company had available cash and cash equivalents of $10,257,000, compared to $14,017,000 at December 31, 2009. The decrease is primarily due to funds used in operating activities, offset by funds received in connection with the KIACTA™ asset sale and license agreement.

The Company's consolidated financial statements and accompanying Management's Discussion and Analysis for the year ended December 31, 2010 will be available shortly on SEDAR at www.sedar.com and on the Company's web site at www.bellushealth.com.

Highlights

Update on the Company's product candidates

The following is an overview of the progress on the Company's product candidates during 2010: 

  • KIACTA™ (eprodisate) for the treatment of Amyloid A (AA) amyloidosis - On December 14, 2010, a global confirmatory phase III clinical study was initiated for KIACTA™. The study is designed to confirm the safety and efficacy of KIACTA™ in preventing renal function decline in patients with AA amyloidosis. The international, randomized, double-blind, placebo-controlled, event-driven study will involve approximately 230 patients diagnosed with AA amyloidosis enrolled from approximately 90 sites in 30 countries worldwide. It is currently estimated that the study will be completed in 2014. A similar study conducted by the Company from 2001 to 2004 achieved statistical significance in its primary endpoint (p=0.025) (NEJM June 7, 2007, 356:2349-2360). On April 29, 2010, the Company signed an asset sale and license agreement with Celtic Therapeutics, pursuant to which Celtic Therapeutics acquired and licensed worldwide rights related to the Phase III investigational product candidate KIACTA™ for upfront payments totaling US$10 million. Celtic Therapeutics will fund 100% of KIACTA™'s development costs through its confirmatory Phase III clinical study and all other requirements for KIACTA™'s regulatory approval.

  • NRM8499, a prodrug of tramiprosate for the treatment of Alzheimer's disease - During the first quarter of 2010, the Company initiated a Phase I clinical study for NRM8499. The randomized, double-blind, placebo-controlled study investigated the safety, tolerability and pharmacokinetic profile of NRM8499 in a group of 67 young and elderly healthy subjects. The Phase I clinical study for NRM8499 was completed in the fourth quarter of 2010. On January 31, 2011, BELLUS Health announced the results of the Phase I clinical study which indicated that NRM8499 was safe and well tolerated at the intended therapeutic dose. Moreover, the gastrointestinal tolerability and pharmacokinetic profile of tramiprosate, with regards to the inter-individual variability in drug systemic exposure, were meaningfully improved with NRM8499 when compared to the administration of an equivalent dose of tramiprosate.

Update on VIVIMINDTM and OVOS Natural Health

On September 30, 2010, a Natural Health Product Number (NPN) was issued by Health Canada for VIVIMIND™, which grants formal authorization for sale in Canada. During 2010, the Company entered into two strategic partnerships in relation to VIVIMIND™.

On October 19, 2010, with the approval of a Special Committee of the Board of Directors of the Company, BELLUS Health signed a license and supply agreement relating to the distribution of VIVIMIND™ in Italy with FB Health LLC ("FB Health"). Pursuant to the license and supply agreement, the Company granted FB Health exclusive distribution rights for VIVIMIND™ in Italy, for consideration consisting of an upfront payment and of up to €3 million in commercial milestone payments should certain mutually agreed upon sales targets be achieved. The license and supply agreement also provides for BELLUS Health to supply material for the product to FB Health at a pre-agreed transfer price. FB Health is an Italian nutraceutical company controlled by Dr. Francesco Bellini, Chairman of the Board of Directors of BELLUS Health.

On December 31, 2010, the Company entered into a share purchase agreement with Advanced Orthomolecular Research Inc. ("AOR") with respect to OVOS Natural Health, the Company's wholly-owned Canadian nutraceutical subsidiary. In addition, the Company and AOR entered into an exclusive license and supply agreement relating to the distribution of VIVIMIND™ in Canada. Pursuant to the share purchase agreement, AOR acquired all issued and outstanding shares of OVOS Natural Health for a total consideration of $1 million, consisting of an upfront payment of $350,000 and of a payment of $650,000 contingent upon the successful completion of a pre-established milestone event expected to occur within 18 months of the closing of the transaction. Pursuant to the license and supply agreement, the Company granted AOR exclusive distribution rights for VIVIMIND™ in Canada and will be supplying AOR with the material for the product at a pre-agreed transfer price. The license and supply agreement also provides for up to $3 million in commercial milestone payments to BELLUS Health should certain mutually agreed upon sales targets be achieved.

The Company continues to actively pursue arrangements in relation to the distribution of VIVIMIND™ in other markets. 

Strategic Initiatives to Reduce Burn Rate

During 2010 and following the end of the year, the Company continued its efforts to reduce its annual expenditures ("burn rate"). Based on the Company's current estimates, the initiatives implemented by the Company, as described below including the impact of the corporate reorganization, are expected to decrease BELLUS Health's monthly burn rate to approximately $400,000 by the end of the second quarter of 2011.

On August 9, 2010, the Company announced that it would be focusing on supporting its current and future strategic partnerships and on undertaking less expensive product development programs for NRM8499 to reduce its burn rate and extend its cash resources. The Company further announced that as a result of these initiatives, it would gradually reduce its head count by more than two thirds. It is expected that the Company will have approximately 10 employees by the end of the second quarter of 2011. 

On January 14, 2011, the Company announced that it exercised its right to terminate the lease of its Laval, Quebec premises as of April 7, 2011, as provided in the amended lease agreement dated March 31, 2009 with A.R.E. Quebec No. 2, Inc. ("A.R.E."), the landlord of such premises. The exercise of such termination option will result in annual savings of approximately $4.5 million for the Company, representing a total of approximately $43 million in aggregate savings over the remainder of the original lease term. On January 21, 2011, in consideration for the exercise of the termination option, BELLUS Health issued 20,656,320 common shares from treasury to A.R.E. at a price of $0.29 per share (rounded to the second decimal point), for an aggregate value of $6 million. Pursuant to the terms of the amended lease agreement, 2009, deferred rent in the amount of $4.2 million (including deferred rent payments for the first quarter of 2011 and all accrued interest thereon) will be payable to A.R.E. on April 7, 2011, in cash or, at the Company's option, through an issuance of common shares from treasury.

Corporate Reorganization

The Company initiated a corporate reorganization process whereby the Company will unwind its international structure by closing its subsidiaries in Europe and the United States. The completion of the corporate reorganization, which is expected to occur in the first quarter of 2011, will result in the repatriation of BELLUS Health's intellectual property to Canada.

Departure of Vice President, General Counsel and Corporate Secretary

In connection with the gradual reduction of its workforce under the initiatives to reduce its burn rate, BELLUS Health also announced today that Mr. David Skinner, Vice President, General Counsel and Corporate Secretary, will leave the Company, effective February 25, 2011.

"Since joining BELLUS Health in April 2003, David Skinner has demonstrated extraordinary rigor and professionalism. His contribution to managing contractual and enterprise risk, financings and strategic partnerships and negotiating and implementing M&A transactions has been invaluable. We wish to thank David for his dedication and wish him the best success in his future endeavours", said Roberto Bellini.

As part of its mandate as external legal advisor to the Company, Davies Ward Phillips & Vineberg LLP will provide the services of one of its partners, Mr. Sébastien Roy, as Corporate Secretary, effective February 25, 2011.

Going Concern

As at December 31, 2010, the Company's committed sources of funds, and the cash and cash equivalents on hand is expected, in management's view, to be sufficient to meet its committed cash obligations and expected level of expenditures over the next twelve months. However, in the longer term, the ability of the Company to continue as a going concern is dependent upon raising additional financing through borrowings, share issuances, receiving funds through sale of assets, supply agreements or product licensing agreements, and from obtaining regulatory approval in various jurisdictions to market and sell its product candidates and ultimately achieving future profitable operations. The outcome of these matters is dependent on a number of factors outside of the Company's control. These factors continue to raise significant doubt about the Company's ability to continue as a going concern in the foreseeable future. 

About BELLUS Health

BELLUS Health is a development-focused health company concentrating on research and development of products that provide innovative health solutions and address critical unmet medical needs. For further information on BELLUS Health and its drug development programs, please visit www.bellushealth.com or call the toll-free number 1-877-680-4500.

Forward Looking Statements

Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks include but are not limited to: the ability to obtain financing immediately in current markets, the impact of general economic conditions, general conditions in the pharmaceutical and/or nutraceutical industry, changes in the regulatory environment in the jurisdictions in which the BELLUS Health Group does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation, achievement of forecasted burn rate, and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These statements speak only as of the date made and BELLUS Health Inc. is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see the Company's public fillings including the Annual Information Form of BELLUS Health Inc. for further risk factors that might affect the BELLUS Health Group and its business.


SOURCE BELLUS HEALTH INC.

For further information:

Anne-Marie Durand
NATIONAL Public Relations
514-843-2319
amdurand@national.ca

Profil de l'entreprise

BELLUS HEALTH INC.

Renseignements sur cet organisme


FORFAITS PERSONNALISÉS

Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .

ADHÉSION À CNW

Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.

RENSEIGNEZ-VOUS SUR LES SERVICES DE CNW

Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.