TORONTO, April 2 /CNW/ - Fralex Therapeutics Inc. (TSX: FXI) ("Fralex" or
the "Company"), a medical technology company developing neuromodulation
therapy, announced today its financial results for the year ended December 31,
2006. Effective December 31, 2005 the Company changed its financial year-end
from June 30 to December 31, making its future financial results more readily
comparable to those of other medical technology companies. Unless otherwise
noted, all comparative figures compare the six-month period ended December 31,
2005 to the twelve-month period ended December 31, 2006. In addition,
subsequent to year-end, Fralex completed its initial public offering (IPO) on
February 13, 2007 and trading of its common shares commenced on that date
under the symbol "FXI". As part of the IPO, the Company issued 3,375,000 units
for net proceeds of $8,850,000. Each unit consists of one common share and
one-half of one common share purchase warrant. Each whole warrant entitles the
holder to purchase one additional common share at a price of $4.00 for a
period of two years, subject to acceleration in certain circumstances.
Immediately following the offering, the Company had 21,082,397 Common Shares
"The closing of our IPO solidifies our financial position. It will enable
us to pursue the continued development of Complex Neural Pulse, or CNP," said
Avi Grewal, President and CEO of Fralex. "We believe this technology has the
potential to change the treatment landscape for the millions of people
suffering from chronic pain."
Subsequent to year-end, Fralex initiated the RELIEF trial, a pivotal
study for the treatment of chronic pain associated with fibromyalgia. The
trial will enrol between 200 and 300 subjects across 13 centres in the U.S.
and Canada, and is being conducted under an Investigational Device Exemption
(IDE) from the U.S. Food and Drug Administration (FDA) and an Investigational
Testing Authorization (ITA) from Health Canada. Subjects will be randomized on
a one-to-one basis to receive CNP or placebo for 12 weeks. The primary
efficacy endpoint will be a statistically significant difference between the
active and placebo groups in the proportion of the subjects who achieve a 30%
or greater reduction in their Numerical Rating Scale (NRS) pain scores.
For the year ended December 31, 2006, Fralex recorded a loss of
$3.5 million. This compared to a loss of $1.5 million for the six months ended
December 31, 2005.
Research and development expenses for the year ended December 31, 2006
were $1.7 million compared with approximately $672,000 for the six months
ended December 31, 2005. During the six months ended December 31, 2005, the
Company completed a design review of the existing prototype device acquired
from Lawson Research Institute (LRI) to determine design changes required to
increase the efficacy of the therapy and began the implementation of those
design changes. During the year ended December 31, 2006, the Company completed
the design changes to the CNP Device, began manufacturing of the devices for
the RELIEF trial, and prepared for the initiation of the RELIEF trial which
was approved by the FDA during the year. In order to complete this work the
Company hired additional resources, increased its use of consultants and
increased its expenditures for device components. Employees working directly
in research and development increased from 8 as at December 31, 2005 to 11 at
December 31, 2006.
General and administrative expenses for the year ended December 31, 2006
were $1.2 million compared with approximately $453,000 for the six months
ended December 31, 2005. Taking into account the shorter reporting period, the
current period increase reflects an increase of 33% primarily due to the
hiring of additional resources, increased use of consultants to support R&D
operations and in preparation for the Company's IPO.
As of December 31, 2006 the company held cash, cash equivalents and
short-term investments of $3.4 million. These funds, together with the
$8.85 million raised by way of the IPO, are expected to provide sufficient
funding for the Company to complete its planned operations through to the end
of the fourth quarter of 2008, based on a plan of treating 200 patients in the
RELIEF study. The Company will need to raise additional funds if it is
required to increase the size of the trial to 300 patients based on an interim
analysis. The interim analysis is expected to be completed in the first
quarter of 2008.
Subsequent to year-end, on March 30, 2007, the Company issued options to
purchase 130,000 Common Shares with an exercise price of $2.64 to members of
the Board of Directors. The intention to issue these options was previously
disclosed in the prospectus filed relating to the IPO.
Detailed financial statements and the MD&A are available at
www.fralex.com or www.sedar.com.
Notice of Annual General Meeting
Fralex will hold its Annual Meeting of Shareholders on June 14, 2007 at
10:00 a.m. (EDT) at the office of Lang Michener LLP, located at BCE Place,
Suite 2500, 181, Bay Street, Toronto, Ontario, Canada.
Fibromyalgia is a chronic, debilitating condition characterized by
widespread musculoskeletal (MSK) pain, disturbed sleep, and fatigue along with
multiple painful tender points, which are widely and symmetrically
distributed. According to the American Pain Society, fibromyalgia is estimated
to affect eight to twelve million people in the United States. Fibromyalgia is
one of the most commonly diagnosed conditions in pain clinics in the United
States. No treatments have been specifically approved for fibromyalgia in the
United States or Canada.
FRALEX is a medical technology company focused on developing and
commercializing Complex Neural Pulse(TM) or CNP(TM), a novel neuromodulation
therapeutic technology for chronic pain, which utilizes specifically designed,
low-frequency electromagnetic pulses. FRALEX is proceeding with its FDA and
Health Canada-approved pivotal clinical trial (the "RELIEF" trial) to evaluate
the safety and effectiveness of this technology in the treatment of chronic
pain associated with fibromyalgia. The trial is to be conducted in 2007 and
2008 at leading medical centres within the US and Canada. For more information
on FRALEX, please visit www.fralex.com; further details on the RELIEF trial
are posted on www.clinicaltrials.gov.
Certain statements contained in this release containing words like
"believe", "intend", "may", "expect", and other similar expressions, are
forward-looking statements that involve a number of risks and uncertainties.
Factors that could cause actual results to differ materially from those
projected in the Company's forward-looking statements include the following:
market acceptance of Company's technologies and products; the ability to
obtain financing; Company's financial and technical resources relative to
those of its competitors; Company's ability to keep up with rapid
technological change; government regulation of therapeutic technologies; the
Company's ability to enforce its intellectual property rights and protect its
proprietary technologies; the ability to obtain and develop partnership
opportunities; the timing of commercial product launches; the ability to
achieve key technical milestones in key products and other risk factors
identified from time to time in the Company's filings.
For further information:
For further information: Avi Grewal, President and Chief Executive
Officer, Fralex Therapeutics Inc., (416) 213-8118 ext. 210,
firstname.lastname@example.org; Christina Bessant, Investor Relations, The Equicom Group
Inc., (416) 815-0700 ext. 269, email@example.com