SAN DIEGO AND VANCOUVER, Aug. 5, 2013 /PRNewswire/ - Sophiris Bio Inc. (Sophiris, TSX: SHS) (the "Company" or "Sophiris"), a biopharmaceutical company developing a clinical-stage, targeted treatment for the symptoms of benign prostatic hyperplasia (BPH or enlarged prostate), today announced financial results and recent key operational highlights for the three and six months ended June 30, 2013.
Recent Key Operational Highlights
- On July 15, 2013, the Company announced the appointment of Joseph L.
Turner to its Board of Directors effective and contingent upon the
closing of the Company's proposed initial U.S. public offering of its
common shares and listing on The NASDAQ Stock Market. Mr. Turner has
more than 25 years of financial management experience in the biotech
and pharmaceutical industries. Mr. Turner currently serves on the
Board of Directors and is the chair of the audit committee of three
publicly-traded pharmaceutical companies.
- Topsalysin was approved as the generic name for PRX302 by both the
United States Adopted Names Council (USAN) and the World Health
Organization and was published on the USAN web site and in the US
Pharmacopeia Dictionary on May 1, 2013.
- On July 12, 2013, the Company announced the resignation of both Noah Knauf and Amit Sobti, the Warburg Pincus nominees from its Board of Directors. The resignation of the Warburg Pincus nominees was in conjunction with the independent sales transaction of 50 million shares of Sophiris' common shares from Warburg Pincus to Tavistock Life Sciences.
Financial Results for the Second Quarter Ended June 30, 2013
The Company reported a net loss of $2.6 million ($0.02 per share) for the three months ended June 30, 2013, compared to a net loss of $5.7 million ($0.03 per share) for the three months ended June 30, 2012, representing a decrease of $3.1 million.
Research and Development Costs
Research and development expenses were $1.2 million for the three months ended June 30, 2013 compared to $3.7 million for the three months ended June 30, 2012, representing a decrease of $2.5 million. The decrease in research and development costs is primarily attributable to a $1.5 million decrease in the costs associated with the Company's transfer and scale-up of manufacturing activities for PRX302 and a $0.5 milliondecrease in non-clinical activities, specifically a repeat dose monkey study and a rat fertility study, both of which were completed in 2012. Also contributing to the reduction in research and development expenses was a decrease in consulting costs of $0.3 million. The research and development costs included stock-based compensation charges of $0.1 million for the three months ended June 30, 2013, as compared to approximately $43,000 for the three months ended June 30, 2012.
General and Administrative Costs
General and administrative expenses were $0.9 million for the three months ended June 30, 2013, compared to $1.4 million for the three months ended June 30, 2012. This decrease is primarily related to a decrease in personnel related costs and market research costs which were partially offset by an increase in accounting and tax professional fees. The general and administrative costs included stock-based compensation charges of $0.2 million for the three months ended June 30, 2013, as compared to approximately $0.1 million for the three months ended June 30, 2012.
Interest Expense
During the three months ended June 30, 2013, the Company incurred interest expense related to its Oxford Loan of $0.3 million, of which $0.1 million was related to the accretion of the debt discount, as compared to the three months ended June 30, 2012, in which the Company incurred $0.5 million interest expense, of which $0.2 million related to the accretion. Cash paid for interest was $0.2 million for the three months ended June 30, 2013 as compared to $0.4 million for the same period in 2012.
Foreign Exchange (Loss) Gain
For the three months ended June 30, 2013, the Company recorded a foreign exchange loss of $0.3 million compared to a foreign exchange loss of $0.2 million for the three months ended June 30, 2012.
Financial Results for the Six Months Ended June 30, 2013
The Company reported a net loss of $2.7 million ($0.02 per share) for the six months ended June 30, 2013, compared to a net loss of $10.2 million ($0.07 per share) for the six months ended June 30, 2012, representing a decrease of $7.5 million. The significant decrease in the Company's net loss is primarily related to the recording of revenue of $4.6 million associated with a non-refundable milestone payment, net of a sub-licensing royalty fee, in connection with the Company's licensing agreement with Kissei during the six months ended June 30, 2013. This milestone payment relates to the completion of certain development activities as outlined in the Company's licensing agreement with Kissei.
License Revenue
During the six months ended June 30, 2013, the Company recognized as revenue $4.6 million, net of a sub-licensing royalty fee, associated with a non-refundable milestone payment due upon the achievement of certain development activities in connection with the Company's licensing agreement for PRX302 with Kissei. The milestone payment was recorded net of a $0.4 million sub-license royalty fee due to UVIC Industry Partnerships Inc. and The Johns Hopkins University.
Research and Development Costs
Research and development expenses were $3.7 million for the six months ended June 30, 2013 compared to $6.8 million for the six months ended June 30, 2012, representing a decrease of $3.1 million. The decrease in research and development costs is primarily attributable to a $1.0 million decrease in the costs associated with the Company's non-clinical activities, specifically a repeat dose monkey study and a rat fertility study, both of which were completed in 2012. In addition, the costs associated with the transfer and scale-up of manufacturing activities for PRX302 decreased approximately $1.8 million from the six months ended June 30, 2012 compared to the six months ended June 30, 2013. Research and development costs included stock-based compensation charges of $0.1 million for both the six months ended June 30, 2013 and the six months ended June 30, 2012.
General and Administrative Costs
General and administrative expenses were $2.1 million for the six months ended June 30, 2013, compared to $2.4 million for the six months ended June 30, 2012. The decrease of $0.3 million is due to a reduction in personnel related costs and marketing research costs offset partially by an increase in accounting and tax professional fees and stock based compensation expense. The general and administrative costs included stock-based compensation charges of $0.4 million for the six months ended June 30, 2013, as compared to approximately $0.3 million for the six months ended June 30, 2012.
Interest Expense
During the six months ended June 30, 2013, the Company incurred interest expense related to its Oxford Loan of $0.7 million, of which $0.3 million was related to the accretion of the debt discount, as compared to the six months ended June 30, 2012, in which the Company incurred $1.0 million interest expense, of which $0.3 million related to the accretion. Cash paid for interest was $0.5 million for the six months ended June 30, 2013 as compared to $0.7 million for the same period in 2012.
Foreign Exchange (Loss) Gain
For the six months ended June 30, 2013, the Company recorded a foreign exchange loss of $0.4 million compared to a foreign exchange loss of $0.1 million for the six months ended June 30, 2012.
Income Tax Expense
The milestone payment from Kissei was subject to a 10% Japanese withholding tax. As a result the Company recorded income tax expense of $0.5 million for the six months ended June 30, 2013. The Company will be eligible to utilize the withholding tax to offset future taxes due in Japan, if any. Given the uncertainty around the Company's ability to generate future taxable income, the Company has expensed the withholding tax during the six months ended June 30, 2013.
For complete financial results, please see the Company's filings at www.sedar.com.
About Sophiris
Sophiris Bio Inc. is a biopharmaceutical company developing a clinical-stage, targeted treatment for the symptoms of benign prostatic hyperplasia (BPH or enlarged prostate), which it believes is an unsatisfied market with significant market potential. Sophiris' lead candidate for BPH, PRX302, is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments. Sophiris is planning to begin a Phase 3 clinical trial of PRX302 in the second half of 2013 subject to raising additional capital. For more information, please visit www.sophirisbio.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 Sophiris' current beliefs as well as assumptions made by and information currently available to Sophiris 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 Sophiris in its public securities filings; actual events may differ materially from current expectations. Sophiris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| Sophiris Bio Inc. Condensed Consolidated Interim Statement of Operations, Comprehensive Loss and Deficit (Stated in United States Dollars) (unaudited) | ||||||||||
| For the three months ended June 30, | For the six months ended June 30, | |||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||
| $ | $ | $ | $ | |||||||
| Revenue | ||||||||||
| License revenue, net of royalties | - | - | 4,625,000 | - | ||||||
| Expenses | ||||||||||
| Research and development | 1,154,586 | 3,691,683 | 3,650,217 | 6,782,857 | ||||||
| General and administrative | 879,956 | 1,355,881 | 2,126,239 | 2,361,706 | ||||||
| 2,034,542 | 5,047,564 | 5,776,456 | 9,144,563 | |||||||
| Other income (expense) | ||||||||||
| Interest income | - | 36,312 | - | 48,662 | ||||||
| Interest expense | (346,254) | (519,175) | (739,448) | (1,037,778) | ||||||
| Other income | - | - | 32,000 | - | ||||||
| Foreign exchange loss | (255,234) | (158,051) | (388,467) | (83,809) | ||||||
| (601,488) | (640,914) | (1,095,915) | (1,072,925) | |||||||
| Net loss for the period before income tax expense | (2,636,030) | (5,688,478) | (2,247,371) | (10,217,488) | ||||||
| - | ||||||||||
| Income tax expense | - | - | 500,000 | - | ||||||
| Net loss for the period | (2,636,030) | (5,688,478) | (2,747,371) | (10,217,488) | ||||||
| Other comprehensive income (loss) | ||||||||||
| Currency translation adjustments | 191,215 | (257,296) | 299,300 | (103,354) | ||||||
| Total comprehensive loss for the period | (2,444,815) | (5,945,774) | (2,448,071) | (10,320,842) | ||||||
| Deficit - Beginning of the period | (73,788,689) | (57,042,363) | (73,677,348) | (52,513,353) | ||||||
| Deficit - End of the period | (76,424,719) | (62,730,841) | (76,424,719) | (62,730,841) | ||||||
| Basic and diluted loss per share | (0.02) | (0.03) | (0.02) | (0.07) | ||||||
| Weighted average number of outstanding shares- | ||||||||||
| Basic and diluted | 163,793,203 | 163,793,203 | 163,793,203 | 153,719,943 | ||||||
| Sophiris Bio Inc. Condensed Consolidated Interim Statement of Financial Position (Stated in United States Dollars) (unaudited) | |||||||||
| June 30, 2013 $ | December 31, 2012 $ | ||||||||
| Assets | |||||||||
| Current assets | |||||||||
| Cash | 3,569,844 | 9,720,941 | |||||||
| Other receivables | 78,502 | 71,408 | |||||||
| Deferred financing costs | 2,243,064 | 936,759 | |||||||
| Prepaid expenses | 247,871 | 447,053 | |||||||
| 6,139,281 | 11,176,161 | ||||||||
| Non-current assets | |||||||||
| Property and equipment | 123,481 | 162,762 | |||||||
| Other long term assets | - | 44,313 | |||||||
| Total assets | 6,262,762 | 11,383,236 | |||||||
| Liabilities | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | 4,034,876 | 4,612,650 | |||||||
| Current portion of secured promissory notes | 6,180,158 | 5,894,566 | |||||||
| 10,215,034 | 10,507,216 | ||||||||
| Long-term secured promissory notes | 3,100,854 | 6,006,360 | |||||||
| Commitments | |||||||||
| Shareholders' deficit | |||||||||
| Common shares | 54,490,667 | 54,490,667 | |||||||
| Common share purchase warrants | 7,794,478 | 7,794,478 | |||||||
| Contributed surplus | 6,833,229 | 6,307,944 | |||||||
| Currency translation adjustments | 253,219 | (46,081) | |||||||
| Deficit | (76,424,719) | (73,677,348) | |||||||
| Total shareholders' deficit | (7,053,126) | (5,130,340) | |||||||
| Total liabilities and shareholders' deficit | 6,262,762 | 11,383,236 | |||||||
| Sophiris Bio Inc. Condensed Consolidated Interim Statement of Cash Flows (Stated in United States Dollars) (unaudited) | ||||
| For the six months ended June 30, | ||||
| 2013 | 2012 | |||
| $ | $ | |||
| Cash flows used in operating activities | ||||
| Net loss for the period | (2,747,371) | (10,217,488) | ||
| Items not affecting cash: | ||||
| Stock-based compensation | 525,285 | 343,680 | ||
| Accretion expense | 257,660 | 328,796 | ||
| Depreciation of property and equipment | 42,023 | 40,082 | ||
| Amortization of intangible assets | - | 99,120 | ||
| Unrealized foreign exchange loss (gain) | 387,781 | (301,436) | ||
| Interest expense | 481,788 | 708,982 | ||
| Interest income | - | (48,662) | ||
| Change in working capital: | ||||
| Other receivables | 23,146 | 154,463 | ||
| Other current assets | (32,000) | - | ||
| Prepaid expenses | 198,348 | 184,056 | ||
| Other long term assets | 44,058 | (5,784) | ||
| Accounts payable and accrued liabilities | (817,151) | 129,661 | ||
| Net cash flows used in operating activities | (1,636,433) | (8,584,530) | ||
| Cash flows used in investing activities | ||||
| Interest received | - | 17,681 | ||
| Purchase of property and equipment | (2,742) | (20,718) | ||
| Net cash flows used in investing activities | (2,742) | (3,037) | ||
| Cash flows (used in) provided by financing activities | ||||
| Issuance of common shares in connection with private placement | ||||
| - net of issurance costs paid | - | 8,285,262 | ||
| Deferred financing costs | (1,040,101) | - | ||
| Principal payments on notes payable | (2,877,573) | (444,940) | ||
| Interest paid | (504,569) | (712,504) | ||
| Net cash flows (used in) provided by financing activities | (4,422,243) | 7,127,818 | ||
| Effect of exchange rate changes on cash | ||||
| and cash equivalents | (89,679) | 201,790 | ||
| Net decrease in cash and cash equivalents | (6,151,097) | (1,257,959) | ||
| Cash and cash equivalents - Beginning of the period | 9,720,941 | 23,410,478 | ||
| Cash and cash equivalents - End of the period | 3,569,844 | 22,152,519 | ||
| Supplemental cash flow information | ||||
| Income taxes paid | 500,000 | - | ||
SOURCE Sophiris Bio, Inc.
