Akela Pharma inc reports results for second quarter of fiscal 2007



    www.akelapharma.com
    Toronto Stock Exchange Symbol: AKL

    MONTREAL, Aug. 14 /CNW Telbec/ - AKELA Pharma Inc., (TSX: AKL), a drug
development company focused on developing therapies for the inhalation, pain
and CNS markets, today announced financial results for the second quarter of
fiscal 2007 ended June 30, 2007.
    Akela's results of operations for the three and six month period ended
June 30, 2007 include the operations of PharmaForm since the date of its
acquisition on January 25, 2007. Akela's consolidated net loss for the second
quarter of 2007 was $7.1 million compared to $5.8 million for the segmented
Pharma results for the same 2006 period. As of January 1, 2007 our functional
and reporting currency is now the US dollar.
    "The second quarter and first half of fiscal 2007 were marked by some of
the most significant corporate events to ever take place at Akela. We have
signed a European Union licensing agreement with Janssen Pharmaceutica NV. for
our lead product Fentanyl TAIFUN(R), representing the best possible external
validation for our product, platform and technology. We have also continued to
deliver strong and statistically significant clinical data from our product
development programs such as AKELA's GHRH which has clinically demonstrated
efficacy beyond our expectations. Based on the accomplishments of the first
half of 2007, we strongly believe the second half of 2007 will prove to be as
successful as the first one. " said Dr Halvor Jaeger, Chief Executive Officer
of Akela Pharma Inc.

    
    Other Second Quarter Financial Highlights

    - Total consolidated revenues for the second quarter of 2007 were
      $3.4 million, including $0.6 million in co-development fees and other
      revenue and $2.8 million of contract services. Total consolidated
      revenues for the first 6 months of 2007 were $4.8 million, including
      $1.0 million in co-development fees and other revenue and $4.2 million
      of contract services.

    - Consolidated net loss for the second quarter of 2007 was $7.1 million
      or ($0.09) per share. Consolidated net loss year-to-date is
      $15.2 million or ($0.19) per share.

    2007 Second Quarter Operational Highlights

    - Akela announced the signing of a licensing agreement with Janssen
      Pharmaceutica NV for its lead product, Fentanyl TAIFUN(R) for the
      European Union, Eastern Europe, Russia, the Middle East and Africa.
      A signing fee of $10.8 million was received.

    - Akela announced the first patient enrollment for the extension arm of
      its Fentanyl TAIFUN(R) Phase IIb study.

    - Akela announced the change of its corporate name from LAB International
      Inc. following the approval of a special resolution at its Annual and
      Special Shareholders meeting.
    

    Financial Results

    The year-over-year increase in the net loss was due to a higher rate of
spending on research and development activities and selling, general and
administrative expenses.
    Consolidated SG&A expenses totaled $4.1 million for the second quarter of
2007 and $6.5 million year-to-date compared to $2.3 million and $4.1 million
for the same respective 2006 periods.
    R&D costs for the second quarter of 2007 were $4.6 million and
$9.6 million year-to-date compared to $2.5 million and $4.8 million for the
same respective 2006 periods. The year-to-date amount includes $1.6 million of
severance expense and early termination charges relating to the exit of leased
premises in Finland. The increase in spending is primarily attributable to the
costs associated with the advancement and finalization of the Fentanyl
TAIFUN(R) Phase II trial program and the development of our product
candidates.
    The consolidated net loss for the second quarter of 2007 was
$7.1 million, or ($0.09) per share and $15.2 million or ($0.19) per share
year-to-date, compared with a consolidated net loss for the former Pharma
segment of $5.8 million and $11.1 million respectively.
    The Company had cash and cash equivalents as of June 30, 2007 of
$12.1 million. This does not include an additional $10.8 million received in
July 2007 from the signing of a licensing and development agreement with
Janssen Pharmaceutica NV for Fentanyl TAIFUN(R). This also compares with
$35.3 million as of December 31, 2006.

    About Akela Pharma Inc.

    Akela Pharma is an integrated drug development company focused on
developing therapies for the growing multi-billion dollar inhalation, pain and
CNS markets. Its lead product, for the treatment of breakthrough cancer pain,
is a fast-acting Fentanyl formulation delivered using the Company's TAIFUN(R)
dry powder inhaler platform. Its pipeline also includes therapeutics for
asthma, COPD, growth hormone deficiencies and abuse deterrent formulations for
controlled substances.
    Akela's common shares trade on The Toronto Stock Exchange ("TSX") under
the symbol "AKL" with 82.3 million shares outstanding.

    This news release contains certain forward-looking statements that
reflect the current views and/or expectations of AKELA Pharma Inc. with
respect to its performance, business and future events. Such statements are
subject to a number of risks, uncertainties and assumptions. Actual results
and events may vary significantly.

    
    AKELA PHARMA, INC.
    (formerly LAB International Inc.)
    Consolidated Balance Sheets
    (Unaudited)
    June 30, 2007, with comparative figures as at December 31, 2006
    (in thousands of US dollars)

    ------------------------------------------------------------------------
    ------------------------------------------------------------------------
                                                June 30,        December 31,
                                                   2007                2006
    ------------------------------------------------------------------------
    Assets

    Current assets:
      Cash and cash equivalents              $   12,120          $   35,304
      Accounts receivable                        13,689               1,347
      Prepaid expenses                              776                 712
      ----------------------------------------------------------------------
                                                 26,585              37,363

    Restricted cash                                 600                   -
    Property and equipment                        3,568                 397
    Intangible assets                            14,874               8,015
    Goodwill                                      2,280                   -
    Deferred corporate transaction costs          2,231                 828
    ------------------------------------------------------------------------
                                             $   50,138          $   46,603
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
      Accounts payable and accrued
       liabilities                            $   6,611           $   4,886
      Deferred revenue                            1,477               1,606
      Current portion of long-term debt             323               1,456
      ----------------------------------------------------------------------
                                                  8,411               7,948

    Deferred revenue                             10,966                   -
    Long-term debt                                6,307               4,248
    Future income taxes                           1,153               1,204

    Shareholders' equity:
      Share capital                              54,189              49,758
      Warrants                                      364                 366
      Additional paid-in capital                  6,780               6,281
      Accumulated other comprehensive income      3,458               3,458
      Deficit                                   (41,490)            (26,660)
      ----------------------------------------------------------------------
                                                 23,301              33,203
    Commitments and contingencies (note 13)
    ------------------------------------------------------------------------
                                             $   50,138          $   46,603
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------

    See accompanying notes to unaudited consolidated financial statements.


    AKELA PHARMA, INC.
    (formerly LAB International Inc.)
    Consolidated Statements of Comprehensive Earnings
    (Unaudited)

    June 30, 2007, with comparative figures as at December 31, 2006
    (in thousands of US dollars)

                                    Three-months                 Six-months
                                   ended June 30,             ended June 30,
                          ------------------------    ----------------------
                              2007          2006           2007        2006
    ------------------------------------------------------------------------
    Revenues               $ 3,409     $  10,639       $  4,783   $  20,347

    Expenses:
      Direct costs           1,448         6,354          2,241      12,094
      Selling, general
       and
       administrative        4,102         4,484          6,538       8,127
      Research and
       development           4,331         2,506          9,374       4,842
      Stock-based
       compensation            379           204            497         399
      Amortization of
       property and
       equipment               245           756            409       1,442
      Amortization of
       intangible assets       700           364          1,234         705
      Interest on long-term
       debt and loss on
       settlement of
       convertible
       debenture                50           836             97       1,455
      Foreign exchange      (1,248)           19           (835)        343
    ------------------------------------------------------------------------
                            10,007        15,523         19,555      29,407

    ------------------------------------------------------------------------
    Loss before income
     taxes                  (6,598)       (4,884)       (14,772)     (9,060)

    Recovery of (provision
     for) income taxes:
      Current                 (119)         (733)          (138)     (1,062)
      Future                    (6)          810             80         951
      ----------------------------------------------------------------------
                              (125)           77            (58)       (111)

    ------------------------------------------------------------------------
    Net loss             $  (6,723)    $  (4,807)     $ (14,830)   $ (9,171)
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------

    Basic and diluted
     net loss per
     share                $  (0.08)     $  (0.07)      $  (0.18)   $  (0.13)
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------

    Basic and diluted
     weighted average
     number of shares
     outstanding        82,340,563    72,085,027     81,721,540  70,535,677
    ------------------------------------------------------------------------
    ------------------------------------------------------------------------

    See accompanying notes to unaudited consolidated financial statements.
    
    %SEDAR: 00003466EF




For further information:

For further information: Frédéric Dumais, Vice-President, Investor
Relations, (514) 315-3330 ext. 106, Fax: (514) 315-3325; Tina Posterli, (U.S.
Media), (917) 322-2565, tposterli@rxir.com; www.akelapharma.com

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