Isotechnika reports first quarter 2010 financial results

EDMONTON, May 12 /CNW/ - Isotechnika Pharma Inc. (TSX:ISA) today announced highlights and financial results for the first quarter ended March 31, 2010.

Highlights

    
    -   The Company's partner, Lux Bioscences, Inc. (Lux) filed a New Drug
        Application (NDA) with the U.S. Food and Drug Administration (FDA)
        and a Market Authorization Application (MAA) with the European
        Medicines Agency (EMA) for voclosporin. Voclosporin is proposed for
        the treatment of non-infectious uveitis involving the posterior
        segment of the eye, a leading cause of vision loss and long-term
        disability and the fourth leading cause of legal blindness in the
        industrialized world.

    -   Announced that the EMA had validated the MAA as submitted by Lux. The
        dossier has now been distributed to members of the Committee for
        Medicinal Products for Human Use (CHMP) for formal review which is
        expected to take one year.

    -   Announced that the FDA had accepted the NDA and granted priority
        review as submitted by Lux. The priority review status accelerates
        the review period to six months. The FDA grants a priority review
        designation to drugs that are considered to have the potential to
        provide an important advancement in treatment or provide a treatment
        for which there is no adequate therapy available. The target date for
        completion of the review under the Prescription Drug User Fee Act
        (PDUFA) is August 3, 2010.

    -   Announced that the Dermatology and Ophthalmology Drugs Advisory
        Committee of the FDA is scheduled to review Lux's NDA for voclosporin
        on June 28, 2010. The FDA is not bound by the Advisory Committee's
        recommendation, but may take its advice into consideration when
        evaluating the NDA for voclosporin.

    -   If the submissions are approved in the U.S. and Europe, Isotechnika
        will receive milestone payments of $7.04 million USD and $3.52
        million USD, respectively, from Lux. The Company will also receive
        royalty payments on sales of voclosporin for uveitis.

    -   Isotechnika amended its agreement with Paladin Labs Inc. (Paladin)
        concerning its remaining stake in the revenue stream from the
        Isodiagnostika business sold to Paladin on June 18, 2009. This
        amendment resulted in a one time up front payment of $1.65 million
        with an additional amount up to $350,000 payable by January 31, 2011,
        based on Isodiagnostika sales in 2010. The immediate gross proceeds
        of $1.65 million received from Paladin as a result of this amendment
        provided the Company with additional non-dilutive funding for
        operational purposes.

    -   Announced a research and development contribution from the National
        Research Council of Canada Industrial Research Assistance Program for
        its NICAM platform.
    

Financial Results

For the first quarter ended March 31, 2010, the Company reported consolidated net income of $796,000 or $0.01 per common share, as compared to a consolidated net loss of $4.13 million or $0.04 per common share for the same period in 2009.

The Company reported income from discontinued operations of $1.73 million for the first quarter of 2010 compared to $273,000 for the first quarter of 2009. The Company reflected the diagnostic segment as discontinued operations as a result of the amendment to the research and development agreement with Paladin. The net gain on sale of the diagnostic royalty stream of $1.73 million for the first quarter ended March 31, 2010 was comprised of gross proceeds from the one-time upfront payment of $1.65 million, plus the Company's 25% share ($171,000) of Isodiagnostika net sales for the first quarter of 2010 less costs related to the transaction of $91,000.

The Company reported a net loss from continuing operations of $934,000 or 0.01 per share for the first quarter of 2010 compared to $4.40 million from the same period in 2009.

Revenue from continuing operations increased to $1.48 million for the three months ended March 31, 2010, compared to $257,000 for the three months ended March 31, 2009. The increase primarily reflected revenue earned during the period from the research and development payments made by Paladin.

Research and development expenditures were $1.42 million in the first quarter of 2010, compared to $2.41 million in the first quarter of 2009. Corporate, administration and marketing costs were $725,000 for the first quarter of 2010, compared to $1.02 million for the first quarter of 2009.

The Company, as at March 31, 2010, had $5.17 million in cash and cash equivalents, accounts receivable of $440,000 and accounts payable and accrued liabilities of $1.47 million. The Company believes it has sufficient cash resources to continue its current planned operations until at least the fourth quarter of 2010. The Company will need to raise additional cash in the future.

For further discussion of the Company's financial results for the three months ended March 31, 2010, the unaudited interim consolidated financial statements and the Management's Discussion and Analysis are accessible on Isotechnika's Web site at www.isotechnika.com or at www.sedar.com.

We seek Safe Harbour.

    
    Isotechnika Pharma Inc.
    Consolidated Interim Statements of Operations and Comprehensive Income
    (Loss)
    (Unaudited)
    -------------------------------------------------------------------------
    (expressed in thousands of Canadian dollars)

                                                        Three months ended
                                                       March 31     March 31
                                                           2010         2009
                                                                   (restated)
                                                              $            $
    Revenue
    Research and development revenues                     1,013            -
    Licensing revenue                                       338          179
    Contract services and other                             125           78
                                                   --------------------------

                                                          1,476          257
                                                   --------------------------
    Expenses
    Research and development                              1,418        2,409
    Corporate, administration and marketing                 725        1,023
    Amortization of property and equipment                  217          227
    Amortization and write-down of  intellectual property    36          172
    Contract services and other                              28           21
    Interest and prepayment costs on long-term debt           -          852
    Gain on disposal of equipment                             -          (55)
                                                   --------------------------

                                                          2,424        4,649
                                                   --------------------------

    Loss before the undernoted                             (948)      (4,392)
                                                   --------------------------

    Other income (expense)
    Foreign exchange gain (loss)                             11          (35)
    Investment income                                         3           25
                                                   --------------------------

                                                             14          (10)
                                                   --------------------------

    Net loss from continuing operations                    (934)      (4,402)

    Net income from discontinued operations               1,730          273
                                                   --------------------------

    Net income (loss) for the period                        796       (4,129)

    Other comprehensive income                                -            -
                                                   --------------------------

    Comprehensive income (loss) for the period              796       (4,129)
                                                   --------------------------
                                                   --------------------------
    

%SEDAR: 00028600E

SOURCE ISOTECHNIKA PHARMA INC.

For further information: For further information: Dr. Robert Foster, President & CEO, Isotechnika Pharma Inc., (780) 487-1600 (247), (780) 484-4105 (fax), rfoster@isotechnika.com; Mr. Dennis Bourgeault, Chief Financial Officer, Isotechnika Pharma Inc., (780) 487-1600 (226), (780) 484-4105 (fax), dbourgeault@isotechnika.com

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ISOTECHNIKA PHARMA INC.

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