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Protox reports second quarter 2011 financial results and achievements

^{Published on 2011-08-10 04:10:47 - Market Wire}
 

SAN DIEGO AND VANCOUVER, Aug. 10, 2011 /CNW/ - Protox Therapeutics Inc. ("Protox") (TSX: PRX), a developer of innovative products for the treatment of urological diseases, today announced financial results and achievements for the quarter ended June 30, 2011.

"During the second quarter of 2011, Protox continued to make progress," said Dr. Lars Ekman, Executive Chairman and President of Protox.  "Development operations have been successfully transferred to the newly established office in San Diego, a U.S. IND has been activated, and the team's current focus is the operational preparation for the upcoming transrectal study."

Second Quarter 2011 Operational and Financial Highlights (up to and including August 4, 2011)

• Entered into a US $15 million loan agreement with Oxford Finance LLC.  Proceeds are being used to finance Protox's late stage drug development program for the treatment of Benign Prostate Hyperplasia (BPH).
• Completed the operational transition to the new office in San Diego, California.  San Diego is a leading biotech cluster with access to a deep pool of management talent and experience in biologic drug development.
• Transitioned Chairman Lars Ekman, M.D. Ph.D., to the role of Executive Chairman and President of Protox and appointed Allison J. Hulme, Ph.D., to the role of Chief Operating Officer and Head of Research & Development. 

Selected Financial Information
(Eight quarters ended June 30, 2011, unaudited, in thousands, except per share data)

The Company reported net and comprehensive loss of $3.2 million ($0.03 per share) in the three months ended June 30, 2011 ("2011-Q2") compared to net income of $1.1 million ($0.01 per share) for the three months ended June 30, 2010 ("2010-Q2").  On a year-to-date basis, the company recorded a loss of $5.4 million ($0.04 per share) for the six months ended June 30, 2011 compared to a loss of $544,000 ($0.00 per share) for the six months ended June 30, 2010.  The increase in net loss was caused by the receipt in June 2010 of $2.9 million of license revenue - the only such revenue earned to date - as well as an increase in total expenses of $1.6 million for the three month comparative periods ($2.1 million for the six month comparative periods) as a result of increased research and development activities associated with regulatory and drug manufacturing, and the costs of transitioning our operations to California.

Research and development ("R&D") costs were $1.6 million for the three months ended June 30, 2011 - an increase of $681,000 from $925,000 for 2010-Q2.  R&D expenditures for the six months ended June 30, 2011 were $2.9 million compared to $2.0 million for the comparative period in 2010 - an increase of $900,000.  These increases were driven largely by the increased activities within the first half of 2011 relating to the preparation of the BPH IND application to the FDA as well as to the CMC (Chemistry, Manufacturing and Controls) program for the manufacture and testing of new clinical batches of PRX302 drug supply.  Although offset by a decrease in spending relating to active clinical trials, the IND and CMC projects drove the increased R&D costs incurred in 2011.  In addition, costs of $128,000 were incurred in 2011-Q2 relating to the transition of operations to California, including severance and wind-down of office and laboratory operations in Vancouver.  With the Warburg Pincus and Oxford financing secured, the Company will initiate additional BPH clinical activities and as such, development costs associated with clinical trials, drug manufacturing and regulatory activities are expected to increase through 2011 and 2012.

General and administrative costs for the three months ended June 30 2011 were $1.6 million - an increase of $725,000 over the previous quarter and an increase of $900,000 compared to the same period in 2010.  On a year-to-date basis, G&A expenditures were $2.5 million for the six months ended June 30, 2011 and $1.3 for the comparative period in 2010.  General and administrative costs for the three months ended June 30, 2011 included $900,000 in costs associated with transitioning operations from Vancouver to La Jolla, including severance and wind-down of operations in Vancouver and the initiation of operations in La Jolla.  In addition, general and administrative costs vary from period to period depending on the specific business development, market research and shareholder relations initiatives undertaken and related travel required at such time to support the Company's corporate objectives. The relocation of operations to La Jolla, California and infrastructure costs associated with our increasing development activities are expected to result in increased levels of general and administrative expenses for the remainder of 2011 and 2012.

At June 30, 2011, the Company had cash and cash equivalents of $6.8 million, representing a net decrease of $5.5 million from December 31, 2010. The Company had working capital of $6.1 million at June 30, 2011, a decrease of $4.6 million from December 31, 2010.

As of August 10, 2011, the Company has 122,126,537 common shares issued and outstanding and 22,781,505 common share purchase warrants outstanding which expire between March 2015 and July 2018 and entitle warrant holders to purchase common shares at a prices ranging between $0.50 and $0.65. The weighted average warrant price is $0.54 and the weighted average remaining term is 4.4 years.

The Company has 9,090,167 options outstanding to purchase common shares of the Company. Of the options currently outstanding, approximately 5.8 million are exercisable into an equivalent number of common shares of the Company at exercise prices ranging from $0.56 to $0.90 and with an average exercise price of $0.64.

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

About Protox
Protox Therapeutics is a developer of innovative products for the treatment of urological diseases. 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. For more information, please visit [ www.protoxtherapuetics.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.