TORONTO, ONTARIO -- (Marketwired) -- 07/30/14 -- Trimel Pharmaceuticals Corporation (TSX: TRL) today provided an overview of its corporate accomplishments and reported financial results for the three month period ended June 30, 2014.
Corporate Highlights
Natesto™ Approval
On May 28, 2014, the United States Food and Drug Administration approved Natesto™ (testosterone nasal gel), for replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone (male hypogonadism).
Tefina™ Phase II Results
Also on May 28, 2014, Trimel announced positive top-line results of its Phase II clinical trial evaluating the efficacy and safety of Tefina™, a "use-as-required" testosterone nasal gel for the treatment of Female Orgasmic Disorder ("FOD"). Women treated with Tefina™ 0.6 mg reported a 35% increase in the average number of orgasms versus placebo (p=0.0013) and 58% of women had at least one orgasm, compared to 43% of women in the placebo group. Tefina™ 0.6 mg also showed a statistically significant (p=0.017) improvement in distress over placebo.
Estrace® Acquisition
On July 16, 2014, the Company announced that it has acquired from Shire plc the Canadian rights for Estrace® (17-beta estradiol), a product indicated for the treatment of symptomatic relief of menopausal symptoms. Estrace® has been available on the Canadian market for 39 years and generated revenues of USD$9.9 million in 2013 within a hormone replacement therapy ("HRT") market valued at USD$100 million and grew by 6% in 2013. It is anticipated that Estrace® will contribute significantly to the Company's earnings before interest, tax, depreciation, and amortization ("EBITDA") and future cash flows.
Private Placement
On July 30, 2014 the Company completed a private placement of 28,801,000 common shares of the Company at a price of CDN$0.62 per share for gross proceeds of CDN$17,856,620.
The Company has used the full net proceeds from the private placement to repay a significant portion of a convertible promissory note previously issued to First Generation Capital Inc. ("First Generation"), a company affiliated with Mr. Ian Ihnatowycz, the Chairman of the Board of Directors of the Company. Following this repayment, First Generation has advised that it intends to convert a portion of the note into a total of 8,945,796 common shares after August 21, 2014. Following such conversion, First Generation would hold approximately 23.7% of the company's common shares, thereby maintaining its current securityholding percentage. The indebtedness remaining under the note (expected to equal approximately US$4.1 million) following such conversion and repayment would remain outstanding in accordance with the terms of the note and no longer be convertible into common shares after such time.
As a result of the transactions noted above, the Company has received an additional USD$5.0 million from its senior secured lender pursuant to the terms and conditions of its applicable senior credit facility.
Financial Results for the Three Months Ended June 30, 2014 (All values in U.S. dollars)
Research and Development ("R&D") expenses were $4.1 million and $6.9 million respectively for the three months ended June 30, 2014 and 2013. The variance is primarily due to costs related to the filing of the Natesto™ new drug application ("NDA") that were incurred during the 2013 period. The decrease in Natesto™ related expenses is offset by higher Tefina™ clinical trial costs in 2014 as this study progressed to its completion during the quarter.
Trimel incurred General and Administrative ("G&A") expenses of $1.5 million and $2.4 million respectively for the three months ended June 30, 2014 and 2013. The decrease in spending was primarily attributable to lower salaries, benefits and share-based compensation, and lower legal fees related to arbitration, corporate and intellectual property matters. The arbitration matters were settled pursuant to a December 21, 2013 agreement.
For the three months ended June 30, 2014, the Company incurred a net loss of $0.05 per share as compared to a net loss of $0.07 per share for the same 2013 period.
At June 30, 2014, the Company had total assets of $22.4 million, as compared to $28.1 million at December 31, 2013 and total liabilities of $9.0 million at June 30, 2014, as compared to $14.5 million at December 31, 2013. The $5.8 million decrease in assets is primarily due to the $5.8 million decrease in cash during the period as it was used to fund current activities. The $5.6 million decrease in total liabilities was primarily impacted by $4.25 million milestone obligation paid to M&P Patent AG and payments related to the Company's debt facility, offset by a $2.5 million Natesto™ milestone accrual that was made in the second quarter of 2014.
The Company had a net cash outflow of $5.2 million for the three months ended June 30, 2014 and had $12.3 million of cash at June 30, 2014. The Company's average monthly burn rate during the three months ended June 30, 2014 was approximately US$1.7 million as compared to approximately $3.1 million for the three months ended June 30, 2013 after excluding certain payments made during the second quarter of 2013 (NDA filing fee for Natesto™, a milestone payment made to a technology partner and an inventory prepayment). The Company believes it has sufficient resources to fund its ongoing activities into 2015, depending on the timing of further clinical activities and barring unforeseen events. The Company's average monthly burn rate is a non-GAAP financial measure with no standard meaning under IFRS, which management uses to further evaluate the Company's results of operations in each reporting period.
The information set out above is in summary form. Readers are encouraged to review the Company's annual information form, financial statements (and accompanying notes), together with management's discussion and analysis available on SEDAR at www.sedar.com and on the Company's website at www.trimelpharmaceuticals.com.
Conference Call Details
Shareholders are reminded of the conference call to discuss the Company's second quarter results to be held on July 31, 2014 at 8:30 a.m. (Toronto time). To access the call live, please dial 416-340-2216 or 1-866-223-7781. Listeners are encouraged to dial in 10 minutes before the call begins to avoid delays. A replay of the conference call will be available until 7:00 p.m. (Toronto time) on Wednesday, August 6, 2014 by dialling 905-694-9451 or 1-800-408-3053, using access code: 8161397#.
About Trimel
Trimel is a specialty pharmaceutical company involved in the sale, distribution, and development of products with a focus in men's health, women's health, and respiratory medicine. Natesto™, a product utilizing Trimel's licensed nasal gel technology, has been approved for sale in the United States by the FDA. For more information, please visit www.trimelpharmaceuticals.com.
Notice regarding forward-looking statements:
Information in this press release that is not current or historical factual information may constitute forward looking information within the meaning of securities laws. Implicit in this information are assumptions regarding our future operational results. These assumptions, although considered reasonable by the company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual performance of the company is subject to a number of risks and uncertainties, including with respect to the performance of Estrace®, and could differ materially from what is currently expected as set out above. For more exhaustive information on these risks and uncertainties you should refer to our annual information form dated March 5, 2014 which is available at www.sedar.com. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time, whether as a result of new information, future events or otherwise, except as required by applicable securities law.
TRIMEL PHARMACEUTICALS CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT JUNE 30, 2014
UNAUDITED
(expressed in U.S. Dollars)
ASSETS
June 30, December 31,
2014 2013
------------------------------
CURRENT
Cash $ 12,289,692 $ 18,111,145
Restricted cash 23,417 23,505
Inventory 3,758,254 1,913,772
Prepaids and other assets 700,779 1,582,924
Assets classified as held for sale 107,135 -
------------------------------
16,879,277 21,631,346
NON-CURRENT ASSETS
Property and equipment, net 2,407,046 3,273,196
Intangible assets 3,068,900 3,216,800
------------------------------
TOTAL ASSETS $ 22,355,223 $ 28,121,342
------------------------------
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 5,678,088 $ 9,864,079
Current portion of long-term debt, net of
issuance costs 2,874,046 2,834,639
------------------------------
8,552,134 12,698,718
LONG-TERM
Long-term debt, net of issuance costs 349,999 1,827,082
Derivative financial instrument 49,008 20,977
------------------------------
TOTAL LIABILITIES $ 8,951,141 $ 14,546,777
------------------------------
SHAREHOLDERS' EQUITY
Share capital 129,211,443 119,741,040
Warrants 1,039,705 1,039,705
Contributed surplus 8,284,868 7,987,237
Accumulated other comprehensive (loss) (1,539,663) (1,639,862)
Deficit (123,592,271) (113,553,555)
------------------------------
TOTAL SHAREHOLDERS' EQUITY 13,404,082 13,574,565
------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 22,355,223 $ 28,121,342
------------------------------
TRIMEL PHARMACEUTICALS CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013
UNAUDITED
(expressed in U.S. Dollars)
For the three months ended For the six months ended
June 30, June 30,
2014 2013 2014 2013
--------------------------------------------------------
EXPENSES
Research and
development $ 4,139,357 $ 6,917,920 $ 6,849,318 $ 11,792,337
General and
administrative 1,531,071 2,361,902 2,806,136 5,764,213
--------------------------------------------------------
Total operating
expenses 5,670,428 9,279,822 9,655,454 17,556,550
--------------------------------------------------------
FINANCE COSTS, NET
Interest on long-
term debt and
other financing
costs 179,786 369,723 356,498 658,378
Interest income (29,514) (36,940) (49,157) (41,083)
Foreign exchange
(gain)/ loss 1,632,069 (471,406) 48,002 (468,036)
Change in fair
value of
derivative
financial
instrument 7,220 (10,947) 27,919 (146,914)
--------------------------------------------------------
1,789,561 (149,570) 383,262 2,345
--------------------------------------------------------
TOTAL EXPENSES 7,459,989 9,130,252 10,038,716 17,558,895
--------------------------------------------------------
NET LOSS $ (7,459,989) $ (9,130,252) $(10,038,716) $(17,558,895)
--------------------------------------------------------
--------------------------------------------------------
OTHER COMPREHENSIVE INCOME
(LOSS), NET OF INCOME TAX
Items that may be
reclassified
subsequently to
profit or loss:
Foreign currency
translation
adjustment 1,906,275 (1,403,787) 100,199 (1,530,274)
--------------------------------------------------------
TOTAL COMPREHENSIVE
LOSS FOR THE PERIOD $ (5,553,714) $(10,534,039) $ (9,938,517) $(19,089,169)
--------------------------------------------------------
--------------------------------------------------------
Basic and diluted
weighted average
shares outstanding 163,126,438 132,555,004 158,947,911 112,108,917
Basic and diluted
net loss per common
share $ (0.05) $ (0.07) $ (0.06) $ (0.16)
TRIMEL PHARMACEUTICALS CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013
UNAUDITED
(expressed in U.S. Dollars)
Contributed
Notes Share capital Warrants surplus
---------------------------------------------
Balance, January 1, 2013 $ 78,214,661 $ 3,452,607 $ 4,318,927
Net loss for the period - - -
Cumulative translation
adjustment - - -
----------------------------------------------------------------------------
Total comprehensive loss
for the period - - -
Common shares, net of
share issuance costs 41,526,379 - -
Share based compensation - - 1,000,556
----------------------------------------------------------------------------
Balance as at June 30,
2013 $ 119,741,040 $ 3,452,607 $ 5,319,483
----------------------------------------------------------------------------
Balance, January 1, 2014 $ 119,741,040 $ 1,039,705 $ 7,987,237
Net loss for the period - - -
Cumulative translation
adjustment - - -
----------------------------------------------------------------------------
Total comprehensive loss
for the period - - -
Common shares, net of 8
share issuance costs 9,470,403 - -
Share based compensation 11 - - 297,631
----------------------------------------------------------------------------
Balance as at June 30,
2014 $ 129,211,443 $ 1,039,705 $ 8,284,868
----------------------------------------------------------------------------
Accumulated
other
comprehensive
Notes income (loss) Deficit Total
---------------------------------------------
Balance, January 1, 2013 $ 362,920 $ (81,598,627) $ 4,750,488
Net loss for the period - (17,558,895) (17,558,895)
Cumulative translation
adjustment (1,530,274) - (1,530,274)
----------------------------------------------------------------------------
Total comprehensive loss
for the period (1,530,274) (17,558,895) (19,089,169)
Common shares, net of
share issuance costs - - 41,526,379
Share based compensation - - 1,000,556
----------------------------------------------------------------------------
Balance as at June 30,
2013 $ (1,167,354) $ (99,157,522) $ 28,188,254
----------------------------------------------------------------------------
Balance, January 1, 2014 $ (1,639,862) $(113,553,555) $ 13,574,565
Net loss for the period - (10,038,716) (10,038,716)
Cumulative translation
adjustment 100,199 - 100,199
----------------------------------------------------------------------------
Total comprehensive loss
for the period 100,199 (10,038,716) (9,938,517)
Common shares, net of 8
share issuance costs - - 9,470,403
Share based compensation 11 - - 297,631
----------------------------------------------------------------------------
Balance as at June 30,
2014 $ (1,539,663) $(123,592,271) $ 13,404,082
----------------------------------------------------------------------------
TRIMEL PHARMACEUTICALS CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013
UNAUDITED
(expressed in U.S. Dollars)
2014 2013
------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
----------------------------------------------
Net loss for the period $ (10,038,716) $ (17,558,895)
Items not requiring an outlay of cash:
Adjustment for foreign exchange (gain)/loss 220,411 (175,959)
Amortization of intangible assets 147,900 147,900
Depreciation of property and equipment 1,078,511 412,561
Interest on long-term debt and other
financing costs 356,498 658,378
Change in fair value of derivative financial
instrument 27,919 (146,914)
Share based compensation 297,631 1,000,556
Impairment of property and equipment 45,138 9,338
Net changes in non-cash working capital items
related to operating activities:
Inventory (813,763) -
Prepaids and other assets (116,582) (1,926,000)
Accounts payable and accrued liabilities (4,579,699) 383,458
Provisions - (41,620)
------------------------------
(13,374,752) (17,237,197)
------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
----------------------------------------------
Proceeds from issuance of common shares, net
of financing costs 9,470,403 41,526,379
Financing costs, long-term debt (70,907) -
Payment of long-term debt obligations (1,500,000) (1,250,000)
Payment of capital lease obligations - (140,551)
Interest paid (180,274) (319,602)
------------------------------
7,719,222 39,816,226
------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
----------------------------------------------
Acquisition of property and equipment, net of
deposits (58,838) (245,611)
Proceeds from sale of property and equipment - 2,812
------------------------------
(58,838) (242,799)
------------------------------
NET (DECREASE)/INCREASE IN CASH FOR THE PERIOD (5,714,368) 22,336,230
Exchange (loss) on cash (107,085) (1,238,830)
CASH BEGINNING OF PERIOD 18,111,145 9,216,999
------------------------------
CASH END OF PERIOD $ 12,289,692 $ 30,314,399
------------------------------
Contacts:
Kenneth G. Howling
Chief Financial Officer
416 679 0536
ir@trimelpharmaceuticals.com
