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ISOTECHNIKA REPORTS THIRD QUARTER 2010 FINANCIAL RESULTS

^{Published on 2010-11-09 13:40:43 - Market Wire}
 

EDMONTON, Nov. 9 /CNW/ - Isotechnika Pharma Inc. (TSX:ISA) today announced operational update and financial results for the third quarter ended September 30, 2010. 

Operational Update

The Company and 3SBio, Inc., a China-based biotechnology company, on August 23, 2010, completed a Development, Distribution and License agreement for voclosporin.  Under the terms of the agreement, the Company granted 3SBio exclusive rights to all transplant and autoimmune indications of voclosporin in China, including Hong Kong and Taiwan, excluding ophthalmic indications and medical devices which were previously licensed to Lux Biosciences, Inc. and Atrium Medical Corporation, respectively. 3SBio will be responsible for the clinical development, registration and commercialization of voclosporin in China. The transaction consisted of a non-refundable licensing fee of $1.58 million (US$1.5 million) and a convertible debenture of $4.73 million (US$4.5 million). The Company will provide, under separate agreement, commercial supply to 3SBio on a cost-plus basis.  The Company will also receive ongoing royalties based on sales of voclosporin by 3SBio.

In September, 2010, the Company received a notice to convert from 3SBio with respect to the convertible debenture.  Under the notice to convert, 3SBio converted $2.02 million (US$1.92 million) of the convertible debenture into common shares pursuant to the conversion terms provided by the debenture certificate.  As a result, the Company issued 13 million common shares at $0.155 per common share to 3SBio. 

The Company announced on August 4, 2010, that Lux received a Complete Response Letter (CRL) from the United States Food and Drug Administration (FDA) regarding their New Drug Application (NDA) for voclosporin.  The FDA requested additional information and recommended that an additional clinical trial in patients with non-infectious uveitis be conducted in order to consider a future approval of voclosporin for this indication.   

The Company's Chairman of the Board, Mr. David MacNaughtan, has resigned as Chairman and Director of the Board for personal reasons.  Mr. MacNaughtan has accepted a position with a new employer where he is not able to be a Board member of a TSX listed company.  "While we are disappointed that Mr. MacNaughtan cannot continue to serve on our Board, we wish him all the best in his new position," commented Dr. Robert Foster, President and CEO.

Financial Results

The Company reported a consolidated net loss of $1.55 million or $0.01 per common share for the three months ended September 30, 2010, as compared to a consolidated net loss of $1.80 million or $0.01 per common share for the same period in 2009. For the nine months ended September 30, 2010, the consolidated net loss was $1.24 million or $0.01 per common share compared to a consolidated net loss of $6.4 million or $0.06 per common share for the comparable period in 2009.

The Company's financial and operational resources in the third quarter ended September 30, 2010, were focused primarily on completing the 3SBio transaction and providing required assistance to Lux regarding its regulatory submission in Europe for the uveitis indication.

The Company reported income from discontinued operations of $Nil or $Nil per common share for the third quarter of 2010 compared to $219,000 or $0.002 per common share for the third quarter of 2009. For the nine months ended September 30, 2010, the income from discontinued operations was $1.9 million or $0.01 per common share compared to $748,000 or $0.01 per common share for the comparable period in 2009. The Company reflected the diagnostic segment as discontinued operations when the Company amended its agreement with Paladin Labs Inc. ("Paladin") concerning its remaining stake in the revenue stream from the Isodiagnostika business sold to Paladin on June 18, 2009. 

The Company reported a net loss from continuing operations of $1.55 million or $0.01 per common share for the third quarter ended September 30, 2010, compared to $2.02 million or $0.01 per common share for the third quarter ended September 30, 2009. For the nine months ended September 30, 2010, the net loss from continuing operations was $3.14 million or $0.02 per common share compared to a net loss from continuing operations of $7.20 million or $0.06 per common share for the comparable period in 2009.

Revenue from continuing operations decreased to $272,000 for the third quarter of 2010, compared to $807,000 for the same period in 2009. The Company recorded revenue from continuing operations of $3.22 million for the nine months ended September 30, 2010, as compared to $1.22 million for the same period in 2009.

Research and development expenditures decreased to $693,000 in the third quarter of 2010, compared to $1.84 million in the third quarter of 2009.  The Company incurred net research and development expenditures of $3.12 million for the nine months ended September 30, 2010, as compared to $5.74 million for the same period in 2009.

Corporate and administration increased to $779,000 for the third quarter of 2010, compared to $675,000 for the third quarter of 2009, but decreased to $2.19 million for the nine months ended September 30, 2010, compared with $3.01 million for the nine months ended September 30, 2009. 

The Company, as at September 30, 2010, had $7.23 million in cash and cash equivalents, accounts and other receivables of $2.00 million and accounts payable and accrued liabilities of $1.05 million. At December 31, 2009 the Company had $4.80 million in cash and cash equivalents, accounts and other receivables of $770,000 and accounts payable and accrued liabilities of $2.14 million. The increase in the net financial position was attributable to the completion of the 3SBio transaction as discussed above.

For further discussion of the Company's financial results for the three months ended September 30, 2010, the unaudited interim consolidated financial statements and the Management's Discussion and Analysis for the third quarter ended September 30, 2010 are accessible on Isotechnika's website at [ www.isotechnika.com ] or at [ www.sedar.com ].

We seek Safe Harbor.

Isotechnika Pharma Inc.
Consolidated Condensed Interim Statements of Operations and Comprehensive Loss
(Uaudited)

(expressed in thousands of Canadian dollars)

%SEDAR: 00028600E