Fralex Announces 2007 fourth Quarter and year-end Results



    TORONTO, March 31 /CNW/ - Fralex Therapeutics Inc. (TSX: FXI) ("Fralex"
or the "Company"), a medical technology company developing a treatment for
chronic pain associated with fibromyalgia, announced today its financial
results for the fourth quarter and year ended December 31, 2007.
    "We are focused on establishing our CNP device as the standard of care
for the treatment of chronic pain associated with fibromyalgia. Fibromyalgia
is a debilitating condition characterized by widespread chronic,
musculoskeletal pain. Our vision is to set new standards for safety and
efficacy in the treatment of the millions of sufferers of fibromyalgia and
other causes of chronic pain. As such, we have initiated our RELIEF trial at
19 centres across the U.S. and Canada with the plan to enrol between
200-300 patients," said Avi Grewal, President and Chief Executive Officer.
"With the enrolment of our 100th patient in March 2008, our RELIEF trial has
reached a critical point. Interim data expected in the third quarter of 2008
will allow us to determine the overall trial size and thereafter, the path to
commercialization for our CNP therapy. It is our goal to be the first company
to market a medical device in the U.S. and Canada that is indicated for the
treatment of chronic pain associated with fibromyalgia"

    
    Events Subsequent to Year End

    -   As at March 7, 2008, achieved 100th patient randomization milestone
        in its pivotal RELIEF trial; interim analysis results are expected in
        Q3 2008.

    Operating Highlights for 2007

    -   Initiated the RELIEF trial, in the first quarter of 2007, for the
        treatment of chronic pain associated with fibromyalgia. The trial is
        evaluating the safety and effectiveness of the Company's non-drug,
        in-home therapy, Complex Neural Pulse (CNP(TM)). The RELIEF trial is
        being conducted under an Investigational Device Exemption (IDE) from
        the FDA and an Investigational Testing Authorization (ITA) from
        Health Canada at 19 centres across the U.S. and Canada. With success
        in achieving the primary safety and efficacy endpoints, the data from
        the RELIEF study will form part of a Premarket Approval ("PMA")
        submission to the FDA. Fralex is seeking to be the first company to
        market a medical device in the U.S. and Canada which is indicated for
        the treatment of chronic pain associated with fibromyalgia.

    -   Received CE marking for the PRIMA device in September 2007. PRIMA is
        a non-invasive, home-use device which delivers CNP and the CE marking
        allows Fralex to market the PRIMA device in the European Union for
        chronic musculoskeletal pain

    -   Obtained certification against ISO 9001 and ISO 13485 in
        February 2007, two standards which are established by the
        International Organization for Standardization (ISO) and are
        applicable to the quality management systems within medical device
        design and manufacture facilities.

    -   Granted three U.S. patents throughout 2007 for CNP technology
        bringing the number of issued patents to 15.

    Corporate Highlights for 2007

    -   Completed an initial public offering for gross proceeds of
        $10,125,000 in February 2007.
    -   Elected Larry Haimovitch and Pat Ryan to the Board of Directors in
        February 2007.
    -   Appointed Leslie Auld to the position of Chief Financial Officer in
        June 2007.
    -   Announced the appointment of David Chazanovitz to the Board of
        Directors in November 2007.
    

    Financial Review

    For the three months ended December 31, 2007, the Company reported a
decrease in loss of $396,506 to $812,880 in 2007 (or $0.02 Net loss per share)
as compared with the same period in 2006 of $1,209,386 (or $0.14 Net loss per
share) primarily due to the recording of refundable tax credits of $727,077
which reduced research and development costs. For the year-ended December 31,
2007, the Company reported an increase in loss of $1,453,386 to $4,993,773 (or
$0.25 Net loss per share), compared with a loss of $3,540,387(or $0.47 Net
loss per share) for the same period in 2006, due to costs associated with the
initiation of the RELIEF trial.
    As at December 31, 2007, Fralex had cumulative losses of $11,787,891
while holding cash and cash equivalents and short-term investments in the
amount of $7,774,346. Fralex's principal capital needs in the near term are
for completing the planned RELIEF trial, PRIMA device development, supporting
ongoing research and development and general corporate expenses. While the
Company projects it will have sufficient cash and cash equivalents and
short-term investments on hand of $7,774,346, together with refundable tax
credits of $727,077 ($555,369 of which was received in January 2008) to
complete its planned operations through to the end of the fourth quarter of
2008, its ability to continue as a going concern beyond that point is
dependent on its ability to secure additional financing. Based on average
enrolment rates experienced to date, the Company will need to raise additional
capital in order to complete treatment of the final patients in the RELIEF
trial projected to occur in the first half of 2009.
    Detailed financial statements and the MD&A are available at
www.fralex.com or www.sedar.com.

    About FRALEX:

    FRALEX is a medical technology company focused on developing and
commercializing Complex Neural Pulse 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 U.S. 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.

    
    Fralex Therapeutics Inc.
    (A development stage company)
    Balance Sheets
    -------------------------------------------------------------------------

                                                   December 31,  December 31,
                                                          2007          2006
                                                             $             $
                                                   --------------------------
    Assets

    Current assets
    Cash and cash equivalents                           92,485       174,372
    Short-term investments                           7,681,861     3,186,705
    Investment tax credits receivable                  727,077        72,769
    Receivables - other                                 21,492        47,175
    Prepaid expenses and deposits                      142,499        40,071
                                                   --------------------------
                                                     8,665,414     3,521,092

    Deferred share issue costs                               -       508,417
    Property and equipment                              76,991       148,213
                                                   --------------------------

                                                     8,742,405     4,177,722
                                                   --------------------------
                                                   --------------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities         1,047,991       948,624
    Convertible promissory note                              -        21,785
                                                   --------------------------

                                                     1,047,991       970,409
                                                   --------------------------

    Shareholders' equity

    Share capital                                   18,027,262     9,265,073
    Warrants                                         1,064,777             -
    Other equity                                       392,330       736,358
    Deficit                                        (11,787,891)   (6,794,118)
    Accumulated other comprehensive loss                (2,064)            -
                                                   --------------------------

                                                     7,694,414     3,207,313
                                                   --------------------------

                                                     8,742,405     4,177,722
                                                   --------------------------
                                                   --------------------------



    Fralex Therapeutics Inc.
    (A development stage company)
    Statements of Operations and Comprehensive Income (Loss)
    -------------------------------------------------------------------------

                                                      Year ended December 31,
                                                          2007          2006
                                                             $             $
                                                   --------------------------

    Expenses
    Research and development                         3,173,730     1,699,987
    General and administrative                       1,349,021     1,217,576
    Stock-based compensation                           446,329       691,000
    Amortization                                        73,793        53,249
    Foreign exchange loss (gain)                       333,576        (9,607)
                                                   --------------------------

    Loss before the undernoted                      (5,376,449)   (3,652,205)

    Interest income - net                              382,676       111,818
                                                   --------------------------

    Net loss for the year                           (4,993,773)   (3,540,387)
                                                   --------------------------
                                                   --------------------------

    Other comprehensive income (loss)
    Unrealized income (loss) on available-for-sale
     short-term investments                             (2,064)            -
                                                   --------------------------

    Comprehensive loss for the year                 (4,995,837)   (3,540,387)
                                                   --------------------------
                                                   --------------------------

    Basic and diluted loss per common share              (0.25)        (0.47)
                                                   --------------------------
                                                   --------------------------
    
    %SEDAR: 00024447E




For further information:

For further information: Avi Grewal, President and Chief Executive
Officer, Fralex Therapeutics Inc., (416) 213-8118 ext. 210,
agrewal@fralex.com; Christina Bessant, Investor Relations, The Equicom Group
Inc., (416) 815-0700 ext. 269, cbessant@equicomgroup.com

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FRALEX THERAPEUTICS INC.

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