Bradmer announces 2009 third quarter financial results

TSX: BMR

TORONTO , Nov. 12 /CNW/ - Bradmer Pharmaceuticals Inc. ("Bradmer" or the "Company") today announced its 2009 third quarter financial results.

Operational Highlights

During the three-month and nine-month periods ended September 30, 2009 , the Company continued its stated decisive actions arising from the strategic review of operations announced February 17, 2009 . Pursuant to the strategic review, the Company closed its Phase III GLASS-ART Trial in March 2009 to further patient enrolment, as the completion of initial milestones was projected to fully exhaust the Company's cash resources, while capital market conditions restricted the ability to raise further capital at this time. The Company has continued to execute on its cash conservation plan in the third quarter with a further reduction of staff and clinical trial related expenses to the minimum level required to wind down the business while continuing to pursue license opportunities, alternative sources of non-dilutive funding and to explore all strategic options. The plan included a substantial issuer bid whereby the Company purchased for cancellation 7.5 million of its outstanding common shares, at a price of CDN$0.20 per share or approximately US$0.183 per share, on September 8, 2009 for proceeds paid to shareholders of $1,366,000 .

Financial Results

Amounts in US dollars, unless specified otherwise, and results expressed in accordance with Canadian Generally Accepted Accounting Principles (Canadian GAAP).

For the three-month period ended September 30, 2009 , Bradmer recorded a net loss of $722,000 or $0.06 per common share based on the weighted average outstanding shares of 11,832,537 during the period, compared to a net loss of $2,627,000 or $0.19 per common share for the three-month period ended September 30, 2008 based on the weighted average outstanding shares of 13,488,215. The decreased loss in 2009 was primarily related to the decision to terminate enrolment in the clinical trial and suspend manufacturing and other operating activities. During the third quarter of 2009, the Company continued its focus on cost reduction opportunities in all areas of the business, particularly staff reductions, in response to the termination of the clinical trial and the existing macro economic conditions.

Research and development expenses for the three-month period ended September 30, 2009 , totaled $44,000 , compared to $1,908,000 in the corresponding period in 2008. The decrease was due to the absence of clinical trial and manufacturing activity in the period after the decision in March 2009 to terminate clinical trial enrolment.

The Bradmer patent portfolio is based on technology, which is the subject of an exclusive license from Duke University. The Company is responsible for patent prosecution and maintenance. The portfolio comprised 31 issued patents and 28 pending patent applications in the United States and major foreign jurisdictions. Several patents have been either returned or abandoned under the terms of the license agreement that do not affect the protection around the key assets. During the second quarter of 2009, the Company made a decision to abandon or return 20 patents to Duke University and to take a write-down of $200,000 for the value of patents abandoned. In the third quarter of 2009, an additional 13 pending applications in non-critical territories or fields were abandoned or returned to Duke, leaving 26 issued and pending patents remaining. Given the uncertainty surrounding the future of the Company, the remaining net book value of the patent rights of $473,000 has been written off to reflect the impairment in value of these patents.

General and administrative expenses for the three-month period ended September 30, 2009 , were $187,000 , compared to $768,000 in the same period in 2008 due to the decision to reduce expenses throughout all departments in the Company. Compensation costs amounted to $214,000 in 2009 compared with $316,000 in 2008. The portion of stock-based compensation included in general and administrative expenses was a recovery of $128,000 for the quarter due to the forfeiture of unvested options, as compared to an expense of $84,000 for the third quarter of 2008. The recovery of prior periods' stock-based compensation expense arose because of the need to reduce the number of options outstanding to meet the limitation that the number of options be no more than 12.5% of the number of shares outstanding. Stock-based compensation included in research and development expenses was a recovery of $10,000 during the three-month period ended September 30, 2009 compared with an expense of $29,000 in the comparable period for 2008.

For the nine-month period ended September 30, 2009 , Bradmer recorded a net loss of $4,676,000 , or $0.363 per common share based on the weighted average outstanding shares of 12,886,915. This compares to a net loss of $9,202,000 , or $0.68 per common share for the nine-month period ended September 30, 2008 based on 13,488,215 shares outstanding. The decreased loss in 2009 was due to the decision to terminate enrolment in the clinical trial and suspend all manufacturing and operating activities.

Research and development expenses for the nine-month period ended September 30, 2009 were $2,289,000 , a decrease of $4,452,000 from $6,741,000 in the same period of 2008 as clinical trial expenses were significantly lower and no manufacturing activities were undertaken this year.

General and administrative expenses for the nine-month period ended September 30, 2009 were $1,686,000 compared to $2,629,000 in the prior year because of a reduction in consultants, travel and administrative support. Compensation costs amounted to $870,000 in 2009 compared with $1,029,000 in 2008. Severance expenses were $81,000 in the nine-month period ended September 30, 2009 compared with $15,000 in the comparable 2008 period. Legal fees increased to $212,000 in 2009 compared to $110,000 in 2008 due to wind down operations and contract terminations. The portion of stock-based compensation included in general and administrative expenses was $4,000 for the 2009 period, as compared to $292,000 for the same period in 2008. Stock-based compensation included in research and development expenses was a reversal of $50,000 due to the forfeiture of unvested options in the 2009 period compared with an expense of $102,000 in the nine-month period ended September 30, 2008 .

At September 30, 2009 , Bradmer had working capital of $1,226,000 , as compared to $6,691,000 at December 31, 2008 . The Company had available cash of $1,443,000 at September 30, 2009 , compared to cash and cash equivalents of $8,245,000 at December 31, 2008 . The decrease was due to the operating losses incurred in the period, the $1,454,000 purchase of common shares and the $1,340,000 reduction in accounts payable and accrued liabilities. After satisfaction of all known operating expenses, payables, and liabilities, the Company is projected to have between $750,000 and $800,000 in unencumbered cash at December 31, 2009 with virtually no liabilities.

As at September 30, 2009 , there were 6,026,627 common shares issued and outstanding and 747,500 stock options. Pursuant to a special resolution passed by shareholders on June 25, 2009 , the Company reduced its stated capital amount by CDN$32,900,000 ( $28,616,848 ) and applied this against the deficit account.

Additional information about the Company, including the MD&A and financial results may be found on SEDAR at www.sedar.com.

About Bradmer Pharmaceuticals Inc. (www.bradmerpharma.com)

Bradmer Pharmaceuticals' lead clinical candidate, Neuradiab, was developed at Duke University Medical Center as a proprietary therapy for a particularly aggressive form of brain cancer, glioblastoma multiforme. Bradmer initiated enrollment of primary GBM patients in a Phase III multi-center clinical trial of Neuradiab. Neuradiab has been granted Orphan Drug Status by both the U.S. Food and Drug Administration and the European Medicines Agency. The Company seeks potential license partners to complete commercialization.

Bradmer Pharmaceuticals Inc.'s common shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or any state regulatory agency in the United States . The resale or transfer by a U.S. investor of such common shares of Bradmer Pharmaceuticals Inc. is subject to the requirements of Rule 904 of Regulation S of the Securities Act or such other applicable exemption thereunder, and other applicable state securities laws.

Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risk and uncertainties, which may cause but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.

Financial results are included below:

    
    Bradmer Pharmaceuticals Inc.

    Balance Sheets
    (Expressed in United States Dollars)
    -------------------------------------------------------------------------
                                                 September 30    December 31
                                                         2009           2008
    -------------------------------------------------------------------------
                                                                    (audited)

    Assets

    Current
      Cash and cash equivalents                  $  1,443,036   $  8,245,455
      Amounts receivable                                5,648         12,520
      Prepaid expenses                                 31,267         27,158
    -------------------------------------------------------------------------

                                                    1,479,951      8,285,133
    Patent rights                                           -        711,054
    -------------------------------------------------------------------------

                                                 $  1,479,951   $  8,996,187
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities

    Current
      Accounts payable and accrued liabilities   $    254,312   $  1,594,578
    -------------------------------------------------------------------------

    Shareholders' Equity

    Capital stock                                     955,520     31,026,728

    Warrants                                          783,988        881,488

    Contributed surplus                             1,210,796      1,158,886

    Deficit                                        (1,724,665)   (25,665,493)
    -------------------------------------------------------------------------

                                                    1,225,639      7,401,609
    -------------------------------------------------------------------------

                                                 $  1,479,951   $  8,996,187
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Bradmer Pharmaceuticals Inc.

    Statements of Operations and Deficit
    (Expressed in United States Dollars)
    (unaudited)

    -------------------------------------------------------------------------
                             Nine Months Ended            Three Months Ended
                                September 30                 September 30
                           2009           2008           2009           2008
    -------------------------------------------------------------------------

    Expenses
      Research
       expenses    $  2,289,383   $  6,741,195   $     43,513   $  1,908,153
      General and
       adminis-
       trative        1,685,939      2,628,846        187,436        768,454
      Amortization
       of patents        47,397         45,549         15,202         15,747
      Foreign
       exchange loss      4,352         14,432          3,755          3,032
      Write-down
       of patent
       rights           672,865              -        472,865              -
    -------------------------------------------------------------------------

                      4,699,936      9,430,022        722,771      2,695,386
    Interest
     income              23,916        228,099          1,039         68,725
    -------------------------------------------------------------------------

    Net loss         (4,676,020)    (9,201,923)      (721,732)    (2,626,661)

    Deficit at
     beginning
     of period      (25,665,493)   (14,136,436)   (29,619,781)   (20,711,698)

    Application of
     stated capital
     against
     deficit         28,616,848              -     28,616,848              -
    -------------------------------------------------------------------------

    Deficit at end
     of period     $ (1,724,665)  $(23,338,359)  $ (1,724,665)  $(23,338,359)
    -------------------------------------------------------------------------

    Basic and
     diluted loss
     per share     $      (0.36)  $      (0.68)  $      (0.06)  $      (0.19)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted
     average
     number
     of shares       12,886,915     13,488,215     11,832,537     13,488,215
    -------------------------------------------------------------------------



    Bradmer Pharmaceuticals Inc.

    Statements of Cash Flows
    (Expressed in United States Dollars)
    (unaudited)

    -------------------------------------------------------------------------
                             Nine Months Ended            Three Months Ended
                                September 30                 September 30
                           2009           2008           2009           2008
    -------------------------------------------------------------------------

    Cash flows from
     operating
     activities
      Net loss for
       the period  $ (4,676,020)  $ (9,201,923)  $   (721,732)  $ (2,626,661)
      Add items
       not affecting
       cash
        Amortization
         of patents      47,397         45,549         15,202         15,747
        Stock based
         compensation
         (recovery)     (45,590)       394,567       (138,192)       113,253
        Accrued
         interest on
         short-term
         investment           -              -              -         31,944
        Write-down
         of patent
         rights         672,865              -        472,865              -
    -------------------------------------------------------------------------

                     (4,001,348)    (8,761,807)      (371,857)    (2,465,717)
      Changes in
       non-cash
       working
       capital
       items
        Amounts
         receivable       6,872        139,163         (1,628)        13,510
        Prepaid
         expenses        (4,109)       (22,339)        14,048          5,297
        Accounts
         payable and
         accrued
         liabilities (1,340,266)       490,639       (200,988)       439,078
    -------------------------------------------------------------------------

                     (5,338,851)    (8,154,344)      (560,425)    (2,007,832)
    -------------------------------------------------------------------------

    Cash flows
     from investing
     activities
      Investment
       in patent
       rights            (9,208)       (68,086)        (4,000)       (33,471)
      Purchase of
       short-term
       investment             -    (10,000,000)             -              -
      Redemption
       of short-term
       investment             -     10,000,000              -     10,000,000
    -------------------------------------------------------------------------

                         (9,208)       (68,086)        (4,000)     9,966,529
    -------------------------------------------------------------------------

    Cash flows
     from financing
     activities
      Repurchase
       of common
       shares        (1,454,360)             -     (1,454,360)             -
    -------------------------------------------------------------------------

    Increase
     (Decrease)
     in cash and
     cash equiva-
     lents during
     the period      (6,802,419)    (8,222,430)    (2,018,785)     7,958,697

    Cash and cash
     equivalents
     at beginning
     of period        8,245,455     19,469,337      3,461,821      3,288,210
    -------------------------------------------------------------------------

    Cash and cash
     equivalents at
     end of period $  1,443,036   $ 11,246,907   $  1,443,036   $ 11,246,907
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

%SEDAR: 00023367E

For further information: Bradmer Pharmaceuticals Inc., Brian Brohman, Chief Business Officer, Phone: [phone] x 804, E-mail: [email protected], Internet: www.bradmerpharma.com; Investor Relations, Ross Marshall, The Equicom Group Inc., Phone: [phone] (Ext. 238), Fax: [phone], E-mail: [email protected]