Protox Reports Third Quarter 2011 Financial Results and Achievements

SAN DIEGO, CA and VANCOUVER, BC, Nov. 14, 2011 /CNW/ - Protox Therapeutics Inc. ("Protox"), (TSX: PRX), a developer of innovative products for the treatment of urological diseases, today announced financial results and achievements for the Quarter ended September 30, 2011.

"We are pleased with our continued progress with the development of PRX302 for the treatment of benign prostatic hyperplasia. As previously announced, we have recently completed the dosing of the first cohort in our transrectal study of PRX302," said Dr. Lars Ekman, Executive Chairman and President of Protox. "We have strengthened our cash position through the addition of $15 million dollars via a loan facility with Oxford Finance and have continued to build out our management team with Alex Casdin joining as Chief Financial Officer."

Operational and Financial Highlights (up to and including November 11, 2011)

  • Announced, on October 20, 2011, the completion of dosing of the first cohort of patients in the Transrectal Study of PRX302 for the treatment of benign prostatic hyperplasia (BPH). In this US based, double-blind, multi-center, placebo controlled study, approximately 56 patients with moderate to severe BPH will be randomized to one of four planned dose cohorts.
  • Secured, on July 18, 2011, a $15 million loan agreement with Oxford Finance LLC, a subsidiary of Sumitomo Corporation, strengthening the company's cash position during the progression of the clinical trial of PRX302 for BPH.
  • Announced, on October 11, 2011, the appointment of Alexander Casdin as Chief Financial Officer.  Mr. Casdin brings 15 years of life science related financial experience to Protox and most recently served as Vice President of Finance at Amylin Pharmaceuticals where he oversaw the financial planning and analysis, treasury, and investor relations groups.

Quarter Ended September 30, 2011

Income/Loss
The Company reported a net loss of $3 million ($0.02 per share) in the three months ended September 30, 2011 compared to a net loss of $1.5 million ($0.02 per share) for the three months ended September 30, 2010.  The greater loss in the current Quarter was driven by increased clinical expenses related to the development of PRX302 for BPH and the expansion of operations in La Jolla, California.

Research & Development
Research and development ("R&D") costs were $1.5 million for the three months ended September 30, 2011 compared to $1 million for the three months ended September 30, 2010. The current Quarter's increase in R&D expenses are primarily attributable to the PRX302 Transrectal BPH Study and expenses associated with the Chemistry, Manufacturing and Controls (CMC) program for PRX302.

General & Administrative
General and administrative ("G&A") costs for the three months ended September 30, 2011 were $1.1 million versus $500,000 for the same period in 2010. The increase in this Quarter's costs was driven primarily by the expansion of operations.

Other Income (Expense)
The increase in other expense for the September 30, 2011 Quarter versus the small income in the prior year's period was driven primarily by the impact of the interest expense related to the Oxford Loan.

Nine Months Ended September 30, 2011

Income/Loss
For the nine month period ended September 30, 2011 the company recorded a net loss of $8.5 million ($0.07 per share) compared to a net loss of $2 million ($0.02 per share) for the nine months ended September 30, 2010.  The increase in net loss for 2011 was a result of not having license revenue in 2011, compared to $2.8 million of license revenue in 2010, as well as increased expenses resulting from research and development activities for PRX302 for BPH and the costs associated with the transition of the Company's operations to La Jolla, California.

Research & Development
Research and development expenditures for the nine months ended September 30, 2011 were $4.5 million compared to $3 million for the comparative period in 2010. The increase in costs for the current nine month period are primarily attributable to the Company's PRX302 development program and to costs associated with the wind-down of Vancouver operations.  Expenses related to PRX302 principally increased due to the preparation of the BPH IND application to the FDA, the CMC program and the initiation of the Transrectal BPH Clinical Trial.

General & Administrative
General and administrative expenditures were $3.6 million for the nine months ended September 30, 2011 versus $1.7 million for the comparative period in 2010. In 2011, general and administrative costs have principally increased due to the expansion of activities, transition of operations to La Jolla and the associated severance related to the wind-down of operations in Vancouver.

Other Income (Expense)
The increase in other expense for the nine months ended September 30, 2011 versus income in the prior year comparable period was driven primarily by the impact of the interest expense related to the Oxford Loan.

For complete financial results, please see our filings at www.sedar.com.

About Protox
Protox Therapeutics is a developer of innovative products for the treatment of urological diseases. Protox's lead program, PRX302 (PORxin), achieved positive results from its Phase 2b placebo controlled trial called TRIUMPH, to treat benign prostatic hyperplasia (BPH or enlarged prostate). Protox has partnered with Kissei Pharmaceuticals for the development and commercialization of PRX302 in Japan. For more information, please visit www.protoxtherapuetics.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 Protox' current beliefs as well as assumptions made by and information currently available to Protox 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 Protox in its public securities filings; actual events may differ materially from current expectations. Protox disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Protox Therapeutics Inc.
Condensed Consolidated Statement of Operations
(Stated in United States Dollars - Unaudited)

      For the three months ended
September  30,
  For the nine months ended
September  30,
      2011   2010   2011 2010
      $   $   $ $
Revenue                
License revenue, net of royalties     -   -   - 2,774,634
                 
Expenses                
Research and development     1,543,618   1,041,715   4,540,579 2,952,671
General and administrative     1,100,777   500,347   3,591,313 1,732,099
      2,644,395   1,542,062   8,131,892 4,684,770
                 
Other income (expense)                
Interest income     20,238   9,501   50,031 11,647
Interest expense      (421,857)   -   (421,857) -
Loss on disposal of assets     (11,648)   -   (11,648) -
Foreign exchange gain (loss)     83,386   13,264   (6,868) 183,197
                   
      (329,881)   22,765   (390,342) 194,844
              -  
Net loss before taxes     (2,974,276)   (1,519,297)   (8,522,234) (1,715,292)
Income tax expense     -   -   - (314,771)
Net loss for the period     (2,974,276)   (1,519,297)   (8,522,234) (2,030,063)
Basic and diluted loss per share     (0.02)   (0.02)   (0.07) (0.02)
Weighted average number of outstanding shares-                
  Basic and diluted     122,126,537   96,303,443   121,660,360 92,994,340

 

Protox Therapeutics Inc.
Condensed Consolidated Statement of Financial Position
(Stated in United States Dollars - Unaudited)

              September 30,   December 31,
              2011   2010
              $   $
                   
Assets            
Current assets      
  Cash and cash equivalents 19,272,182   12,381,237
  Other receivables 211,384   316,320
  Prepaid expenses 285,207   12,255
              19,768,773   12,709,812
Property and equipment 212,883   21,377
Intangible assets 354,234   523,639
Total assets 20,335,890   13,254,828
                   
Liabilities        
Current liabilities      
  Accounts payable 1,029,590   1,560,446
  Accrued liabilities 862,463   399,007
  Current portion of secured promissory notes  1,801,008   -
              3,693,061   1,959,453
Secured promissory notes  12,499,075   -
              16,192,136   1,959,453
                   
Shareholders' equity      
  Common shares  41,863,411   41,247,953
  Common share purchase warrants 4,063,188   3,613,527
  Contributed Surplus 7,244,911   6,736,222
  Currency translation differences (2,202,826)   (1,999,631)
  Deficit    (46,824,930)   (38,302,696)
  Total shareholders' equity 4,143,754   11,295,375
Total liabilities and shareholders' equity 20,335,890   13,254,828
                   

 

Protox Therapeutics Inc.
Condensed Consolidated Statement of Cash Flows
(Stated in United States Dollars - Unaudited)

                 
    For the three months ended
September 30,
  For the nine months ended
September 30,
    2011   2010   2011   2010
    $   $   $   $
                 
Cash flows used in operating activities              
Net loss for the period (2,974,276)   (1,519,297)   (8,522,234)   (2,030,063)
Items not affecting cash:              
  Stock-based compensation 183,262   172,814   719,993   338,685
  Accretion expense 132,986   -   132,986   -
  Amortization of property and equipment 16,432   3,884   25,551   15,250
  Amortization of intangible assets 50,846   47,966   152,897   144,411
  Unrealized foreign exchange gain (174,114)   -   (41,802)   -
  Loss on disposal of assets 14,495   -   14,495   -
  Interest paid 186,042   -   186,042   -
  Interest income (20,238)   (9,501)   (46,780)   (11,119)
Change in non-cash working capital:              
  Other receivables 24,511   (120,116)   95,784   (41,233)
  Prepaid expenses 98,933   (6,663)   (277,738)   60,210
  Accounts payable 351,836   (40,787)   (573,381)   90,847
  Accrued liabilities 298,384   872,487   485,496   916,919
Net cash flows used in operating activities (1,810,901)   (599,213)   (7,648,691)   (516,093)
Cash flows used in investing activities              
Interest received 20,238   9,501   46,780   11,119
Purchase of property and equipment (72,174)   -   (231,186)   (5,319)
Net cash from (used in) investing activities (51,936)   9,501   (184,406)   5,800
Cash flows from financing activities              
Cash received on issuance of promissory notes  14,645,048   -   14,645,048   -
Deferred financing costs -   (1,005,258)   -   (1,005,258)
Issuance of common shares from private placement              
   - net of cash costs -   -   -   4,542,659
Issuance of common shares on exercise of warrants -   -   77,895   225,074
Issuance of common shares on exercise of stock options -   -   302,481   -
Interest paid (186,042)   -   (186,042)   -
Capital lease payments -   (1,191)   -   (3,537)
Net cash from (used in) financing activities 14,459,006   (1,006,449)   14,839,382   3,758,938
Effect of exchange rate changes on cash              
  and cash equivalents (379,883)   201,447   (115,340)   (56,502)
Net increase (decrease) in cash and cash equivalents 12,216,286   (1,394,714)   6,890,945   3,192,143
                 
Cash and cash equivalents - Beginning of period 7,055,896   6,269,355   12,381,237   1,682,498
Cash and cash equivalents - End of period 19,272,182   4,874,641   19,272,182   4,874,641

SOURCE Protox Therapeutics Inc.

For further information:

Michael Moore      
Investor Relations     
Equicom Group      
619-467-7067      
mmoore@equicomgroup.com    
          James Beesley
Investor Relations
Sequoia Partners
778-389-7715
james@sequoiapartners.ca

 

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Protox Therapeutics Inc.

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