Isotechnika Pharma reports third quarter 2009 financial results

EDMONTON, Nov. 11 /CNW/ - Isotechnika Pharma Inc. (TSX:ISA) today announced its financial results for the third quarter ended September 30, 2009.

    
    Operating highlights

    -   The results of the international uveitis Phase 2/3 clinical trials
        studying voclosporin, conducted by the Company's partner Lux
        Biosciences ("Lux"), were the subject of two podium presentations at
        the American Association of Ophthalmology (AAO) meeting and of a
        presentation at the satellite meeting of the American Uveitis Society
        (AUS) held in San Francisco during the week of October 24-27, 2009.
        The presentations highlighted the ability of voclosporin (LX211,
        LUVENIQ(TM)) to control the inflammation that characterizes this
        potentially blinding eye disease and significantly reduce its rate of
        recurrence.

    -   Lux plans to file a New Drug Application (NDA) and a Marketing
        Authorization Application (MAA) around year-end 2009 and early 2010
        in the United States and Europe, respectively, making it possible for
        voclosporin to become the first approved oral treatment capable of
        modifying the course of uveitis, a group of serious eye conditions
        frequently associated with either severe vision loss or substantial
        morbidity from steroid use.

    -   Regulatory approvals in the United States and Europe will trigger
        milestone payments of $7.1 million USD and $3.5 million USD,
        respectively, to the Company.

    -   The Company has developed a portfolio of non-immunosuppressive
        cyclosporine analogue molecules (NICAMs) with potent cyclophilin
        inhibition but no binding to calcineurin. Cyclophilin inhibition has
        garnered considerable attention as a novel therapy in the treatment
        of a wide range of diseases including hepatitis C, stroke, and
        chronic neurological disorders such as Parkinson's, Lou Gehrig's, and
        Alzheimer's. Cyclosporine A is a well established cyclophilin
        inhibitor, however, its additional strong binding to calcineurin
        results in powerful immunosuppression and limits its therapeutic
        potential to transplantation and various autoimmune disorders.

    -   The Company has appointed Dr. Jurgen Engel to its Board of Directors.
        Dr. Engel is currently the President and CEO of Aeterna Zentaris,
        where he has been since the acquisition of Zentaris in December 2002.
        A seasoned professional in the pharmaceutical industry, he brings
        extensive expertise in drug development and commercialization.
    

"During the third quarter, the Company continued to take the necessary steps to advance its lead product voclosporin," stated Dr. Robert Foster, President & CEO of Isotechnika. "We are achieving this through our existing partnership with Lux, while continuing to seek additional partners for voclosporin and NICAMs."

Financial Results

The Company reported a consolidated net loss of $1.8 million or $0.01 per common share for the three months ended September 30, 2009, as compared to a consolidated net loss of $3.7 million or $0.04 per common share for the same period in 2008. For the nine months ended September 30, 2009, the consolidated net loss was $6.4 million or $0.06 per common share compared to $14.5 million or $0.14 per common share for the comparable period in 2008.

The Company's financial and operational resources in the third quarter ended September 30, 2009, have been, and will continue to be in the fourth quarter of 2009, focused primarily on providing the required assistance for Lux's regulatory submissions. The Company will receive $10.6 million USD in milestone payments from Lux upon regulatory approvals of voclosporin for uveitis in the United States and Europe. Post-approval, the Company will also receive royalty payments on sales of voclosporin for uveitis.

Revenue decreased to $1.0 million for the third quarter ended September 30, 2009, compared to $2.9 million for the third quarter ended September 30, 2008. The Company recorded revenue of $2.6 million for the nine months ended September 30, 2009, as compared to $4.0 million for the same period in 2008.

Research and development expenditures were $1.8 million in the third quarter of 2009, compared to $3.1 million in the third quarter of 2008, a decrease of $1.3 million. The Company incurred total research and development expenditures of $5.8 million for the nine months ended September 30, 2009, as compared to $11.0 million for the same period in 2008.

The decrease in research and development expenditures was primarily due to reduced clinical trial costs for both the voclosporin Phase 2b renal transplant and the Phase 3 European/Canadian psoriasis trials. Both of these trials were in the final stages of completion in 2009. The Company's financial position also limited further research and development activities such as Phase 3 kidney transplant trials.

Corporate, administration and marketing costs decreased to $675,000 for the third quarter of 2009, compared to $1.2 million for the third quarter of 2008. Isotechnika incurred a total corporate, administration and marketing expenditure of $3.1 million for the nine months ended September 30, 2009, as compared with $4.2 million for the same period in fiscal 2008. The decrease in costs reflect overall reductions in operating expenses, including reduced professional fees and wage costs. Wage costs have decreased due to reductions in executive wages and director fees and in the number of administration personnel.

At September 30, 2009, the Company had $6.3 million in cash and cash equivalents.

For further discussion of the Company's financial results for the three months ended September 30, 2009, the unaudited interim consolidated financial statements and the Management's Discussion and Analysis for the third quarter ended September 30, 2009 are accessible on Isotechnika's Web site at www.isotechnika.com or at www.sedar.com.

    
    About Isotechnika Pharma
    ------------------------
    

Edmonton-based Isotechnika Pharma Inc. is a 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 will exceed $4 billion annually in sales for calcineurin inhibitors such as voclosporin by 2010.

Voclosporin, Isotechnika's lead drug candidate, is a next generation calcineurin inhibitor. It has completed a Phase 2b study for the prevention of kidney rejection following transplantation and a Phase 3 European/Canadian trial for the treatment of moderate to severe psoriasis. Through our partner, Lux Biosciences, voclosporin is the subject of a New Drug Application (NDA) in the United States and a Marketing Authorization Application (MAA) in Europe for the treatment of uveitis. Lux has been granted Fast Track designation. Lux Biosciences is also conducting a Phase 1 trial using their proprietary voclosporin ophthalmic solution (LX214) as a candidate for dry eye syndrome. Voclosporin has also entered First-in-Man trials as the drug utilized in the CINATRA(TM) Drug Coated Coronary Stent system developed by the Company's partner, Atrium Medical Corporation.

Isotechnika Pharma Inc. is a publicly traded company on the Toronto Stock Exchange under the symbol "ISA". More information on Isotechnika Pharma can be found at www.isotechnika.com or www.SEDAR.com.

    
    Forward-Looking Statements
    --------------------------
    

Except for historical information, this News Release contains forward-looking statements which may not be based on historical fact. These statements may include, without limitation, plans to fund the Company's operations, statements concerning strategic alternatives, including partnering activities. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the Company's belief as to the potential of its products, its ability to protect its intellectual property rights, securing and maintaining corporate alliances and partnerships, the need for additional capital and the effect of capital market conditions and other factors on capital availability, the ability to economically manufacture its products, the potential of its products, the success and timely completion of clinical studies and trials, and the Company's and its partners' ability to successfully obtain regulatory approvals and commercialize voclosporin. 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 These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made as of the date hereof, and the Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

    
    Isotechnika Pharma Inc.
    Consolidated Interim Balance Sheets
    -------------------------------------------------------------------------

    (expressed in thousands of Canadian dollars)

                                                   September 30  December 31
                                                           2009         2008
                                                     (Unaudited)
                                                              $            $
    Assets

    Current assets
    Cash and cash equivalents                             6,251       25,701
    Accounts receivable                                     546          495
    Inventories                                               -          146
    Prepaid expenses                                        189          124
                                                   --------------------------

                                                          6,986       26,466
    Property and equipment                                2,294        3,206
    Intellectual property rights                          2,275        2,771
                                                   --------------------------

                                                         11,555       32,443
                                                   --------------------------
                                                   --------------------------
    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities              1,807        3,984
    Current portion of deferred revenue                   1,675        1,330
    Current portion of long-term debt                         -        5,781
    Current portion of deferred lease inducements            16           16
                                                   --------------------------

                                                          3,498       11,111
    Deferred revenue                                      1,517        1,801
    Long-term debt                                            -        9,895
    Deferred lease inducements                               45           58
                                                   --------------------------

                                                          5,060       22,865
                                                   --------------------------

    Shareholders' Equity

    Share capital
    Common stock
      Authorized
        Unlimited number of common shares without
         par value
      Issued and outstanding
        131,314,804 shares (December 31, 2008 -
         106,243,492)                                   195,948      192,706
    Warrants                                                171        3,293
    Contributed surplus                                   8,792        5,593
    Deficit                                            (198,416)    (192,014)
                                                   --------------------------

                                                          6,495        9,578
                                                   --------------------------

                                                         11,555       32,443
                                                   --------------------------
                                                   --------------------------



    Isotechnika Pharma Inc.
    Consolidated Interim Statements of Operations and Comprehensive Loss
    (Unaudited)
    -------------------------------------------------------------------------

    (expressed in thousands of Canadian dollars)

                          Three Months Ended           Nine Months Ended
                      September 30  September 30  September 30  September 30
                              2009          2008          2009          2008
                                 $             $             $             $
    Revenue
    Licensing revenue          408           271           689           271
    Research and
     development
     revenues                  237             -           237             -
    Diagnostic royalty
     income                    219             -           262             -
    Contract services
     and product sales         162         2,590         1,373         3,734
                      -------------------------------------------------------

                             1,026         2,861         2,561         4,005
                      -------------------------------------------------------

    Expenses
    Research and
     development             1,839         3,117         5,870        10,956
    Refundable tax
     credits                     -             -          (117)            -
                      -------------------------------------------------------
                             1,839         3,117         5,753        10,956
    Corporate,
     administration and
     marketing                 675         1,160         3,075         4,227
    Cost of contract
     services and product
     sales                      48         1,912           574         2,404
    Amortization of
     property and
     equipment                 221           278           714           900
    Interest and
     prepayment costs
     on long-term debt           -           332         1,077           392
    Amortization and
     write down of
     intellectual
     property                  111            48           322           130
    Loss (Gain) on
     disposal of
     equipment                   1             -           (44)           (5)
                      -------------------------------------------------------

                             2,895         6,847        11,471        19,004
                      -------------------------------------------------------

    Loss before the
     undernoted             (1,869)       (3,986)       (8,910)      (14,999)
                      -------------------------------------------------------

    Other income
     (expense)
    Investment income            2           180            36           597
    Foreign exchange
     gain (loss)                66            89           127           (83)
    Net gain from plan
     of arrangement              -             -         2,345             -
                      -------------------------------------------------------

                                68           269         2,508           514
                      -------------------------------------------------------

    Net loss for the
     period                 (1,801)       (3,717)       (6,402)      (14,485)

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

    Comprehensive loss
     for the period         (1,801)       (3,717)       (6,402)      (14,485)
                      -------------------------------------------------------
                      -------------------------------------------------------
    Basic and diluted
     loss per share          (0.01)        (0.04)        (0.06)        (0.14)
                      -------------------------------------------------------
                      -------------------------------------------------------
    

%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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