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PROTOX REPORTS 2010 FINANCIAL RESULTS AND ACHIEVEMENTS

^{Published on 2011-03-31 04:20:17 - Market Wire}
 

VANCOUVER, March 31 /CNW/ - Protox Therapeutics Inc. (the "Company" or "Protox") (TSX: PRX), a leader in the development of receptor targeted therapeutic fusion proteins, today announced financial results and achievements for the year ended December 31, 2010.

"2010 was transformative for Protox across all fronts commencing with very positive clinical data, followed by a valuable partnership with a leading Japanese pharmaceutical company and culminating with a significant financial commitment by a major private equity group," said Dr. Fahar Merchant, President and CEO of Protox. "Our first placebo controlled study with PRX302 met its primary end-point demonstrating that PRX302 has the potential of improving the lives of millions of men that suffer from benign prostatic hyperplasia. The strength of these data was demonstrated by our announcement of a US $75 million license agreement with Kissei Pharmaceuticals for the development and commercialization of PRX302 in Japan. Further validation of the potential promise of PRX302 was confirmed by entering into a $35 million investment agreement with Warburg Pincus, a leading global private equity firm. The development and financial partnerships that we executed on the back of positive clinical data has solidified the Company's ability to effectively conduct further development and commercialization of PRX302 for the treatment of BPH." 

Operational and Financial Highlights (up to and including March 28, 2011)

• Positive top-line results were announced in January 2010 from the Company's multi-centre, double-blinded placebo controlled Phase 2b study of PRX302 (study name: TRIUMPH) in patients with moderate to severe benign prostatic hyperplasia (BPH). The study achieved its primary clinical endpoint of a statistically significant improvement in International Prostate Symptom Score ("IPSS") at day 90 for subjects treated with PRX302 versus subjects receiving placebo.
• Positive six month data from the TRIUMPH study were released in June 2010 and continued to be impressive, showing a sustained improvement in all efficacy measures following a single treatment, which is consistent with earlier open-label studies.
• On March 16, 2010, the Company closed a brokered private placement raising net proceeds of $4.8 million from the issuance of 11,285,388 units at a price of $0.45 per unit.
• Secured a US $75 million license agreement with Kissei Pharmaceutical Co. for the development and commercialization of PRX302 in Japan for BPH, prostate cancer and other diseases of the prostate.  Under terms of the agreement, Protox received an upfront payment of US $3 million and is eligible to receive milestone payments of up $72 million upon achievement of specific development, regulatory and commercial milestones.
• Entered into a $35 million investment agreement with Warburg Pincus, a leading global private equity firm. Under the terms of the agreement Warburg has committed to invest up to CDN $35 million for the issuance of units at a price of $0.40 per unit. The company received the first $10 million tranche in November 2010.
• In conjunction with the investment by Warburg Pincus, the Company welcomed Dr. Lars Ekman (Chairman), Dr. Nishan DeSilva, Mr. Jonathan Leff, Mr. Amit Sobti and Mr. William Rohn to the Board of Directors and Drs. Jim Miller, Alex Giaquinto and Avtar Dhillon stepped down from the Board.
• Presented top-line data from PRX302 clinical trials at the 2010 Annual Meeting of the American Urological Association, the world's largest gathering of urology professionals.
• Publication of positive safety and efficacy results from the open-label Phase 1 and 2 BPH trials in the top-tier Journal, European Urology.

Selected Annual Information

In thousands, except per share data

Protox reported a net loss of $4.5 million ($0.05 per share) for the year ended December 31, 2010 compared to a loss of $7.9 million ($0.10 per share) for the year ended December 31, 2009, representing a year over year decrease in net loss of $3.4 million.

Total expenses for the year ended December 31, 2010 decreased by $727,000 over the comparative year. This was driven by a reduction in research and development expenditures with the completion of the active phase of our TRIUMPH study as well as efforts to manage costs across the Company.

The Company earned US$3.0 million (CAD $3.0 million) in license revenue during the year as a result of the Kissei license agreement. The payment triggered a royalty payment to John Hopkins University and the University of Victoria of $210,000 under the terms of our PORxin license agreement for BPH. The company has not earned any revenue in its previous fiscal years, other than interest earned on the Company's investment balance.

In the future, the Company is eligible to earn up to US$72 million in milestone payments in addition to product supply revenues as well as double digit royalties on sales of PRX302 in Japan.

Research and development costs for the year ended December 31, 2010 were $4.4 million, representing a $1.1 million (20%) decrease from the $5.5 million incurred during the year ended December 31, 2009. This reflects the effects of the consolidation of our research and development programs to focus on the lead BPH program and the maturing of the Company's current BPH trial as the active phase of our lead trial was completed during 2010 - the double-blinded placebo controlled TRIUMPH study - compared to three active trials in 2009. With the Warburg Pincus Financing, the Company plans to initiate additional BPH clinical studies and as such, development costs associated with clinical trials, drug manufacturing and regulatory activities are expected to increase in 2011.

General and administrative costs for the year ended December 31, 2010 were $2.4 million, an increase of $271,000 (12%) from the $2.1 million incurred during the year ended December 31, 2009. The increase in general and administrative costs reflects the significant efforts undertaken in 2010 to secure the regional license arrangement with Kissei and the two separate elements of financing closed in 2010. The higher costs associated with these activities was partially offset by our efforts to consolidate and focus operations on our lead clinical BPH program and the Company's continued efforts to stabilize and reduce overhead costs in the future.

Summary of Quarterly Results

(Eight quarters ended Dec 31, 2010, unaudited, in thousands, except per share data)

The Company reported a net and comprehensive loss of $2.4 million or $0.02 per share in the three months ended December 31, 2010 compared to $1.7 million or $0.02 per share for the three months ended December 31, 2009 - an increase of $694,000 over the comparative year $920,000 over the previous quarter. The increase in expenses is primarily driven by the increased level of regulatory activities, preparation of the Investigational New Drug (IND) Application with the FDA, manufacturing clinical batches of PRX302, as well as the impact of the payment of performance bonuses in the last quarter of 2010.

Research and development costs for the three months ended December 31, 2010 were $1.6 million compared to $1.2 million for three months ended December 31, 2009, an increase of $408,000 (35%). The increase was driven by the significant level of regulatory activity relating to the preparation of an IND for submission to the FDA, as well as increased drug manufacturing activities in preparation for clinical programs in 2011 and 2012.

General and administrative for the three months ended December 31, 2010 were $$775,000 compared to $526,000 for the three month period ended December 31, 2009. The increase of $249,000 (47%) was driven by the payment of performance bonuses to staff that had been deferred since 2009.

At December 31, 2010, the Company had cash and cash equivalents of $12.3 million, representing a net increase of $10.6 million from December 31, 2009. The Company had working capital of $11.2 million at December 31, 2010, an increase of $9.7 million from December 31, 2009.

As at the date of this report, the Company has 121,310,810 common shares issued and outstanding. In addition, the Company has 21,534,656 common share purchase warrants outstanding which expire between May 2010 and November 2015 and entitle warrant holders to purchase common shares at a prices ranging between $0.27 and $0.71. The weighted average warrant price is $0.54 and the weighted average remaining term is 4.1 years.

The Company also has 7,133,500 options outstanding to purchase common shares of the Company. Of the options currently outstanding, approximately 3.9 million are exercisable into an equivalent number of common shares of the Company at exercise prices ranging from $0.50 to $1.00 and with an average exercise price of $0.65.

For complete financial results, please see our filings at [ www.sedar.com ].

About Protox
Protox Therapeutics is a leader in advancing novel, receptor targeted therapeutic fusion proteins. Two drug candidates derived from the company's INxin™ and PORxin™ platforms are in clinical development.  Protox's lead program, PRX302 (PORxin), achieved positive results from its Phase 2b placebo controlled trial called TRIUMPH, to treat benign prostatic hyperplasia (BPH or enlarged prostate). Protox has partnered with Kissei Pharmaceuticals for the development and commercialization of PRX302 in Japan. PRX321 (INxin) is being developed for the treatment of various cancers and has received Fast Track Designation and Orphan Drug Status from the US FDA and EMEA for the treatment of primary brain cancer. For more information, please visit [ www.protoxtherapeutics.com ].

Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Protox' current beliefs as well as assumptions made by and information currently available to Protox and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  Due to risks and uncertainties, including the risks and uncertainties identified by Protox in its public securities filings; actual events may differ materially from current expectations. Protox disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.