Isotechnika reports third quarter results



    EDMONTON, Nov. 6 /CNW/ - Isotechnika Inc. announced today its financial
results for the third quarter ended September 30, 2007, and provided a review
of the Company's scientific and corporate highlights for the third quarter to
the current date.

    Scientific and Corporate Highlights
    -----------------------------------
    On July 20, 2007, the Company completed recruitment of its pivotal
Phase 3 European/Canadian psoriasis trial (ESSENCE) at 642 patients. The
patient population is made up of 231 Canadian patients, 295 patients from
Germany and 116 patients from Poland.
    On August 2, 2007, the Company announced that it had received permission
from the Food and Drug Administration (FDA) of the United States for the
long-term use of ISA247 in patients currently participating in the Phase 2b
kidney transplant (PROMISE) trial. Previously, on June 7, 2007, a No Objection
Letter was received from Health Canada for the long term use of ISA247 in
patients participating in the Canadian arm of the Company's Phase 2b kidney
transplant trial. Patients involved in the PROMISE trial will be allowed to
remain on ISA247 through to commercialization of the drug and beyond after
completion of the 12 month trial. Patients choosing to remain on ISA247
therapy will continue to have safety and efficacy parameters monitored on an
ongoing basis.
    On August 7, 2007, the Company announced that Lux Biosciences (Lux)
received Fast-Track designation from the FDA for ISA247 for the treatment of
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 the New Drug
Application (NDA) early for review as part of a "rolling" submission.
    On August 22, 2007, the Company announced that the independent data
monitoring committee (DMC) met and reviewed the three month data from the
ongoing Phase 2b kidney transplant (PROMISE) trial. The review included data
from two-thirds of the patients completing three month treatment. The DMC had
no concerns in this review with the outcomes of the trial to date and
recommended that the trial continue as currently designed.
    On September 14, 2007, the Company's partner, Lux, received orphan
medicinal product designation from the European Agency for the Evaluation of
Medicinal Products (EMEA) committee for Orphan Medicinal Products for ISA247
for the treatment of chronic, non-infectious uveitis. Orphan Drug designation
provides a variety of incentives, including market exclusivity for up to 10
years following approval, fee reductions and free scientific advice.
Previously in January 2007, Lux had been granted orphan drug status for ISA247
for non-infectious posterior, intermediate and pan uveitis by the FDA in the
United States.
    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.
    These appointments followed the retirement of Dr. Randall Yatscoff as the
Company's President & CEO previously announced on September 25, 2007. Dr.
Yatscoff will remain on as a scientific consultant for six months to assist in
scientific matters until the expected completion of the phase 2b kidney
transplantation trial. The Chairman of the Board, Dr. Robert Foster has been
appointed interim Chief Executive Officer.
    During the third quarter, the Company also made corporate and scientific
presentations at the following conferences; Canaccord Adams Global Growth
Conference, International Association of Therapeutic Drug Monitoring and
Clinical Toxicology Conference, the Basic Science Symposium of the
Transplantation Society and the World Dermatology Conference.

    Financial results
    -----------------
    At September 30, 2007, cash, cash equivalents and short-term investments
totalled $38.9 million, compared to $48.1 million at June 30, 2007, and
$55.5 million at March 31, 2007.
    For the third quarter ended September 30, 2007, the Company reported a
consolidated net loss of $7.4 million or $0.07 per common share, as compared
to a consolidated net loss of $7.0 million or $0.08 per common share for the
same period in 2006. For the nine months ended September 30, 2007, the
consolidated net loss was $25.0 million or $0.24 per common share compared to
$19.0 million or $0.23 per common share for the comparable period in 2006.
    The consolidated net loss increased primarily as a result of higher
research and development expenditures due to the ISA247 Phase 2b kidney
transplant and the Phase 3 European/Canadian psoriasis trials currently
underway offset partially by a continued reduction in corporate,
administration and marketing costs.
    Revenue decreased to $550,000 for the third quarter ended September 30,
2007, compared to $580,000 for the third quarter ended September 30, 2006. On
a year-to-date basis, revenue for the nine months ended September 30, 2007,
was $1.7 million compared to $3.2 million for the same period in fiscal 2006.
    Research and development expenditures were $6.6 million in the third
quarter of 2007, compared to $5.6 million in the third quarter of 2006, an
increase of $1.0 million. The Company incurred total research and development
expenditures of $21.9 million for the nine months ended September 30, 2007, as
compared to $16.0 million for the same period in 2006. The Research and
development expenditures for the third quarter of 2007 consisted primarily of
clinical costs related to the ISA247 Phase 2b kidney transplant and Phase 3
European psoriasis trial and supporting analytical and laboratory costs.
    Corporate, administration and marketing costs totalled $1.3 million for
the third quarter of 2007, compared to $1.6 million for the third quarter of
2006. Isotechnika incurred a total corporate, administration and marketing
expenditure of $4.5 million for the nine months ended September 30, 2007, as
compared with $5.2 million for the same period in fiscal 2006. The decrease in
corporate, administration and marketing costs reflected reduced infrastructure
costs as a result of consolidating the corporate office with the lab site in
Edmonton and closing the Arizona operations in 2006.
    For further discussion of the Company's financial results for the three
and nine months ended September 30, 2007, the unaudited interim consolidated
financial statements and the Management's Discussion and Analysis for the
third quarter ended September 30, 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. It is
estimated that the market potential exceeds $2 billion annually in sales for
calcineurin inhibitors such as ISA247.
    ISA247 is currently being investigated in a Phase 2b North American trial
for the prevention of kidney graft rejection subsequent to transplantation and
a Phase 3 European/Canadian psoriasis trial.
    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.
    ----------------------------------
    Isotechnika Inc. signed a collaboration agreement with F.
Hoffman-La Roche and Hoffman-La Roche Inc. (collectively referred to as
"Roche") on April 9, 2002, which licensed the worldwide rights to develop and
commercialize ISA247 for all transplant indications. The collaboration
agreement was amended in April, 2004 allowing Roche to retain an option to
continue development of the transplant indications based on the successful
completion of the ongoing Phase 2b kidney transplant trial.
    On September 29, 2005, Isotechnika Inc. entered into an exclusive
worldwide licensing agreement with Atrium Medical Corporation for the use of
ISA247 and TAFA93 specifically with drug eluting devices for the non-systemic
treatment of vascular, cardiovascular, target vessel and tissue disorders.
    Isotechnika and Cellgate Inc. ("Cellgate") signed an option agreement on
April 24, 2006, granting Isotechnika the option to obtain an exclusive license
to develop and commercialize conjugates consisting of Cellgate's patented
transporter technology for the topical delivery of ISA247 in patients
suffering from mild to moderate psoriasis.
    On May 24, 2006, Isotechnika signed an agreement with Lux Biosciences
Inc. ("Lux") granting Lux worldwide rights to develop and commercialize
Isotechnika's lead drug, ISA247 for the treatment and prophylaxis of all
ophthalmic diseases. Lux uses the code name LX211 for ISA247 for the
ophthalmic indications.

    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.
    Balance Sheet
    -------------------------------------------------------------------------

    (expressed in thousands of Canadian dollars)

                                                  September 30   December 31
                                                          2007          2006
                                                    (Unaudited)
                                                             $             $
    Assets

    Current assets
    Cash and cash equivalents                           35,591        15,574
    Short-term investments                               3,314        10,174
    Accounts receivable                                    295           463
    Inventories                                            439           299
    Prepaid expenses and other deposits                    453         1,035
                                                  ---------------------------

                                                        40,092        27,545
    Property and equipment                               4,600         5,561
    Patents                                              2,938         2,604
                                                  ---------------------------

                                                        47,630        35,710
                                                  ---------------------------
                                                  ---------------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities             6,247         5,305
    Current portion of deferred revenue                    416           750
    Current portion of long-term debt                      921         2,007
    Current portion of deferred lease inducements           16            16
                                                  ---------------------------

                                                         7,600         8,078
    Deferred revenue                                     3,322         3,322
    Long-term debt                                         121           714
    Deferred lease inducements                              78            90
                                                  ---------------------------

                                                        11,121        12,204
                                                  ---------------------------

    Shareholders' Equity

    Share capital
    Common shares
      Authorized
        Unlimited number of common shares without
         par value
      Issued and outstanding
       106,243,492 (December 31, 2006 - 84,333,492)    192,706       158,276
    Warrants                                             3,122             -
    Contributed surplus                                  4,911         4,422
    Deficit                                           (164,230)     (139,192)
                                                  ---------------------------

                                                        36,509        23,506
                                                  ---------------------------

                                                        47,630        35,710
                                                  ---------------------------
                                                  ---------------------------


    Isotechnika Inc.
    Statement of Operations and Comprehensive Loss
    (Unaudited)
    -------------------------------------------------------------------------

    (expressed in thousands of Canadian dollars, except per share amounts)

                          Three Months Ended          Nine Months Ended
                      September 30  September 30  September 30  September 30
                              2007          2006          2007          2006
                                 $             $             $             $

    Revenue
    Licensing revenue           28           269           335         2,233
    Product sales and
     contract services         522           311         1,371           988
                      -------------------------------------------------------

                               550           580         1,706         3,221
                      -------------------------------------------------------

    Expenses
    Research and
     development             6,614         5,599        21,916        15,956
    Corporate,
     administration and
     marketing               1,345         1,627         4,505         5,231
    Amortization of
     property and equipment    357           517         1,142         1,359
    Product sales and
     contract services         286           177           675           482
    Interest on long-term
     debt                       29            73           123           250
    Amortization of
     patent costs               18            13            54            29
    Loss (gain) on disposal
     of equipment                -            26            (4)           55
                      -------------------------------------------------------

                             8,649         8,032        28,411        23,362
                      -------------------------------------------------------

    Loss before the
     undernoted             (8,099)       (7,452)      (26,705)      (20,141)
                      -------------------------------------------------------

    Other income (expense)
    Investment income          493           439         1,466         1,276
    Foreign exchange
     translation gain (loss)   246            21           201          (155)
                      -------------------------------------------------------

                               739           460         1,667         1,121
                      -------------------------------------------------------

    Net loss for the
     period                 (7,360)       (6,992)      (25,038)      (19,020)
                      -------------------------------------------------------
                      -------------------------------------------------------

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

    Comprehensive loss
     for the period         (7,360)       (6,992)      (25,038)      (19,020)
                      -------------------------------------------------------
                      -------------------------------------------------------
    Basic and diluted
     loss per share          (0.07)        (0.08)        (0.24)        (0.23)
                      -------------------------------------------------------
                      -------------------------------------------------------
    Weighted average
     number of outstanding
     common shares
     (in thousands)        106,243        84,308       102,582        84,270
                      -------------------------------------------------------
                      -------------------------------------------------------
    





For further information:

For further information: Dr. Robert Foster, Chairman & CEO, Isotechnika
Inc., (780) 487-1600 (222), (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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