Isotechnika reports full year and fourth quarter 2007 financial results



    EDMONTON, March 18 /CNW/ - Isotechnika Inc. announced today its financial
results for the year ended December 31, 2007 and provided a review of the
Company's operational and scientific progress for 2007.
    "In 2007 Isotechnika achieved major milestones in the development of
ISA247. Most importantly, the Phase 2b kidney transplant (PROMISE) trial was
completed in December and the final report is required to commence the opt-in
period with Roche. Our development partner, Lux Biosciences ("Lux"), obtained
orphan drug designation and fast track status in Europe and the U.S. and
commenced three pivotal Phase 2/3 trials for the treatment of uveitis," stated
Dr. Robert Foster, Isotechnika's Chairman & CEO. "The calcineurin inhibitor
market, which serves both the transplant and autoimmune communities, is
approximately $2.8 billion and expected to grow to $4 billion by 2010. ISA247
is currently the only calcineurin inhibitor under development to take
advantage of this opportunity."

    Clinical Highlights

    
        In December 2007, the last patient completed the six month Phase 2b
        kidney transplant (PROMISE) trial. Final audited data is expected in
        May 2008.

        Isotechnika received permission from Health Canada and from the Food
        and Drug Administration (FDA) of the United States to allow eligible
        patients from PROMISE to remain on ISA247 until the drug is
        commercially available.

        Recruitment for Isotechnika's pivotal Phase 3 European/Canadian
        psoriasis trial (ESSENCE) was completed at 642 patients on July 23,
        2007. The trial population is made up of 231 patients from Canada,
        295 from Germany and 116 from Poland. Final data from the 60 week
        trial is expected in the first quarter of 2009.

        Lux received permission from regulatory agencies in the United
        States, Canada, the United Kingdom, Germany, France, Austria and
        India to investigate ISA247, referred to as LX211 by Lux, as a
        treatment for non-infectious uveitis and as a maintenance therapy in
        uveitis in three separate Phase 2/Phase 3 (LUMINATE) trials. Patient
        treatment in these trials commenced in February 2007. The trials are
        currently being conducted at 60 clinical trial sites globally. Lux
        expects to complete enrollment by the end of the second quarter of
        2008.

        The FDA has granted fast track designation for ISA247 as a treatment
        for uveitis. Fast Track designation will provide various means to
        expedite the development and review of ISA247. The process could be
        facilitated through meetings and other correspondence with the FDA
        reviewers, consideration for priority review, and the ability to
        submit portions of a New Drug Application (NDA) early for review as
        part of a "rolling" submission.

        Official notification from the European Medicines Agency (EMEA) was
        received by Lux granting orphan medicinal product designation for
        ISA247 the treatment of chronic, non-infectious uveitis. Lux was also
        granted orphan drug status for ISA247 for non-infectious posterior,
        intermediate and pan uveitis by the Food and Drug Administration
        (FDA) of the United States.

    Corporate Highlights

        On February 7, 2008, Mr. Colin Mallet was appointed to the Board of
        Directors. Mr. Mallet was President and CEO of Sandoz Canada Inc. for
        seven years and is a past Chair of the Canadian Association of
        Research-Based Pharmaceutical companies. He has served as a
        Pharmaceutical Business Consultant to several major international
        pharmaceutical companies and has been a director of more than a dozen
        biotechnology companies at various stages of development. He
        currently serves on the Boards of two other public biotech companies,
        MethylGene Inc. and Migenix Inc.

        On October 10, 2007, the Company appointed Mr. Clemens Kaiser to the
        position of Executive Vice President and Chief Marketing Officer. As
        Chief Marketing Officer, Mr. Kaiser will oversee global marketing,
        licensing and business development operations of Isotechnika. Mr.
        Kaiser will also be responsible for identifying, conducting and
        concluding licensing and partnership discussions and negotiations for
        current and future Isotechnika compounds for all markets. The Company
        also announced the appointment of Dr. Derrick Freitag to the Senior
        Management Executive group as Chief Scientific Officer, effective
        October 10, 2007. Dr. Freitag's new role ensures that scientific
        resources are deployed to optimally support our drug development
        programs.

        The Company completed a bought deal financing on February 15, 2007.
        The syndicate of underwriters led by GMP Securities, L.P. and
        including Canaccord Capital Corporation, RBC Dominion Securities Inc.
        and National Bank Financial Inc. (collectively the "Underwriters")
        purchased a total of 21,850,000 Units at a price of $1.85 per Common
        Share for total gross proceeds of $40,422,500, representing the base
        offering size of 19,000,000 Units and the full exercise by the
        Underwriters of the over-allotment option to purchase an additional
        2,850,000 Units. The Company is using the net proceeds of the
        Offering for clinical trial expenses, working capital and general
        corporate purposes.

        Approval from United States Adopted Name (USAN) was received for the
        generic name (voclosporin) for ISA247. Voclosporin is currently under
        review by the International Nonproprietary Names (INN) Expert
        Committee. Approval from the INN will allow Isotechnika to use the
        name voclosporin in labeling, publications, and on drug information.
        The name will serve to identify the active pharmaceutical substance
        during the drugs' life-time worldwide.

        During the year, the Company was issued a Norwegian Patent for ISA247
        which completes the protection over the novel structural features of
        ISA247 in Europe. The Company was also issued a Swedish Patent for
        its mTOR inhibitor, TAFA93 on December 5, 2007, which commences the
        process of nationalizing the European patent. In accordance with the
        European Patent Convention, this patent will be granted in a total of
        31 European countries of which patents for the remaining 30 countries
        will be forthcoming.
    

    Financial results
    -----------------
    At December 31, 2007, the Company's cash, cash equivalents and short-term
investment position was $32.0 million as compared to $25.7 million at
December 31, 2006. The change in cash position resulted mainly from cash
provided by financing activities partially offset by cash used for operations.
The Company's net cash used for operating activities for the three months
ended December 31, 2007 was $6.1 million.
    For the fourth quarter ended December 31, 2007, the Company reported a
consolidated net loss of $8.5 million or $0.08 per Common Share, as compared
to a consolidated net loss of $7.6 million or $0.09 per Common Share for the
same period in 2006. For the year ended December 31, 2007, the Company
reported a consolidated net loss of $33.5 million or $0.32 per Common Share,
as compared to a consolidated net loss of $26.6 million or $0.32 per Common
Share in 2006.
    The higher consolidated loss for the year ended December 31, 2007 versus
2006 was primarily due to increased research and development expenses of
$7.3 million. Revenue decreased by $1.8 million, while corporate,
administration and marketing expenses also declined by $1.6 million.
    Revenue decreased to $2.3 million for the year ended December 31, 2007,
compared to $4.1 million for the year ended December 31, 2006. Revenue in 2007
was comprised of $359,000 for licensing fees and $2.0 million for product
sales and contract services, as compared to $2.7 million for licensing fees
and $1.4 million for product sales and contract services in 2006. Licensing
fees represent the amortization of deferred revenue related to the upfront
payment the Company received in 2005 from its out-licensing agreement with
Atrium Medical Corp.
    Research and development expenses were $29.4 million for the year ended
December 31, 2007, compared to $22.2 million for the year ended December 31,
2006. The increased research and development expenses reflect the increased
clinical trial activity with both the ISA247 Phase 2b kidney transplant and
Phase 3 European/Canadian psoriasis trials fully underway. The Company also
incurred a significant cost to validate the drug substance manufacturing
process for ISA247 which is required for regulatory filing purposes.
    Corporate, administration and marketing expenses totalled $5.7 million
for year ended 2007, compared to $7.2 million for the year ended December 31,
2006. The most significant reason for this decrease was reduced infrastructure
costs due to consolidating all operations in Edmonton in the fourth quarter of
2006.
    The audited financial statements and the Management's Discussion and
Analysis for the year ended December 31, 2007, are accessible on Isotechnika's
Web site at www.isotechnika.com or on SEDAR at www.sedar.com.

    About Isotechnika Inc.
    ----------------------
    Edmonton-based Isotechnika Inc. is an international biopharmaceutical
company focused on the discovery and development of novel immunosuppressive
therapeutics that are designed to offer advantages over other currently
available treatments. There is a significant unmet medical need in the
treatment of both solid organ transplantation and autoimmune disease. The
calcineurin inhibitor market, which serves both the transplant and autoimmune
communities, is approximately $2.8 billion and expected to grow to $4 billion
by 2010.
    ISA247 is a next generation calcineurin inhibitor, which recently
completed a Phase 2b North American trial for the prevention of kidney
rejection following transplantation. An extension to the Phase 2b trial and a
combined Phase 3 European/Canadian trial for the treatment of moderate to
severe psoriasis are ongoing. Our partner, Lux Biosciences, is currently
conducting three separate Phase 2/3 pivotal trials investigating ISA247
(referred to as LX211 by Lux) for the treatment of uveitis.
    Isotechnika Inc. is a publicly traded company on the Toronto Stock
Exchange under the symbol "ISA". More information on Isotechnika can be found
at www.isotechnika.com.

    Partnerships with Isotechnika Inc.
    ----------------------------------

    
    -   Roche retains an option to continue development of the transplant
        indications based on the successful completion of the ongoing ISA247
        Phase 2b kidney transplant trial.

    -   Atrium Medical Corporation has an exclusive worldwide licensing
        agreement for use of ISA247 and TAFA93 with drug eluting medical
        devices for non-systemic treatment of vascular, cardiovascular,
        target vessel and tissue disorders.

    -   Lux Biosciences Inc. was granted worldwide rights to develop and
        commercialize ISA247 for the treatment and prophylaxis of all
        ophthalmic diseases.
    

    Forward-Looking Statements
    --------------------------
    This press release may contain forward-looking statements. Forward
looking statements, including the Company's belief as to the potential of its
products, the Company's expectations regarding the issuance of additional
patents and the Company's ability to protect its intellectual property,
involve known and unknown risks and uncertainties, which could cause the
Company's actual results to differ materially from those in the forward
looking statements. Such risks and uncertainties include, among others, the
availability of funds and resources to pursue research and development
projects, the ability to economically manufacture its products, the potential
of its products, the success and timely completion of clinical studies and
trials, the Company's ability to successfully commercialize its products, the
ability of the Company to defend its patents from infringement by third
parties, and the risk that the Company's patents may be subsequently shown to
be invalid or infringe the patents of others. Investors should consult the
Company's quarterly and annual filings with the Canadian commissions for
additional information on risks and uncertainties relating to the forward-
looking statements. Investors are cautioned against placing undue reliance on
forward-looking statements.

    
    Isotechnika Inc.
    Consolidated Balance Sheets
    As at December 31, 2007 and 2006
    -------------------------------------------------------------------------

    (expressed in thousands of Canadian dollars)

                                                             2007       2006
                                                                $          $
    Assets

    Current assets
    Cash and cash equivalents                              32,025     15,574
    Short-term investments                                      -     10,174
    Accounts receivable                                       484        463
    Inventories                                             1,988        299
    Prepaid and other assets                                  483      1,035
                                                         --------------------

                                                           34,980     27,545
    Property and equipment                                  4,308      5,561
    Patents                                                 2,965      2,604
                                                         --------------------

                                                           42,253     35,710
                                                         --------------------
                                                         --------------------
    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities                9,703      5,305
    Current portion of deferred revenue                       391        750
    Current portion of long-term debt                         527      2,007
    Current portion of deferred lease inducements              16         16
                                                         --------------------

                                                           10,637      8,078

    Deferred revenue                                        3,322      3,322
    Long-term debt                                             81        714
    Deferred lease inducements                                 74         90
                                                         --------------------

                                                           14,114     12,204
                                                         --------------------

    Shareholders' Equity

    Share capital
    Common stock
    Authorized
      Unlimited number of common shares without par value
    Issued and outstanding
      106,243,492 (2006 - 84,333,492)                     192,706    158,276
      Warrants                                              3,122          -
    Contributed surplus                                     4,997      4,422
    Deficit                                              (172,686)  (139,192)
                                                         --------------------

                                                           28,139     23,506
                                                         --------------------

                                                           42,253     35,710
                                                         --------------------
                                                         --------------------


    Isotechnika Inc.
    Consolidated Statements of Operations and Comprehensive Loss
    For the periods ended December 31, 2007 and 2006
    -------------------------------------------------------------------------

    (expressed in thousands of Canadian dollars)

                                     Three Months Ended        Year Ended
                                         December 31           December 31
                                         (Unaudited)

                                       2007       2006       2007       2006
                                          $          $          $          $
    Revenue
    Licensing revenue                    24        506        359      2,739
    Product sales and contract
     services                           582        379      1,953      1,367
                                   ------------------------------------------
                                        606        885      2,312      4,106
                                   ------------------------------------------

    Expenses
    Research and development          7,493      6,195     29,409     22,151
    Corporate, administration and
     marketing                        1,151      1,988      5,656      7,219
    Amortization of property and
     equipment                          348        390      1,490      1,749
    Product sales and contract
     services                           365        214      1,040        696
    Amortization and write-down
     of patent costs                    202         30        256         59
    Interest on long-term debt           17         63        140        313
    (Gain) loss on disposal of
     property and equipment               -         17         (4)        72
                                   ------------------------------------------

                                      9,576      8,897     37,987     32,259
                                   ------------------------------------------

    Loss before the undernoted       (8,970)    (8,012)   (35,675)   (28,153)
                                   ------------------------------------------

    Other income (expense)
    Investment income                   373        331      1,839      1,607
    Foreign exchange translation
     gain (loss)                        141         63        342        (92)
                                   ------------------------------------------

                                        514        394      2,181      1,515
                                   ------------------------------------------

    Loss before capital taxes        (8,456)    (7,618)   (33,494)   (26,638)

    Capital taxes                         -         (1)         -         (1)

    Net loss for the period          (8,456)    (7,617)   (33,494)   (26,637)

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

    Comprehensive loss for the
     period                          (8,456)    (7,617)   (33,494)   (26,637)
                                   ------------------------------------------
                                   ------------------------------------------

    Basic and diluted loss
     per share                        (0.08)     (0.09)     (0.32)     (0.32)
                                   ------------------------------------------
                                   ------------------------------------------
    

    %SEDAR: 00010508E




For further information:

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

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ISOTECHNIKA PHARMA INC.

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