Nov. 18/99
SYNSORB Biotech Inc. Reports Third Quarter Results
CALGARY, ALBERTA--SYNSORB Biotech Inc. ("SYNSORB") (TSE:SYB,
NASDAQ: SYBB) today reported its consolidated results for the
third quarter and nine month period ended September 30, 1999.
Total consolidated loss for the quarter ended September 30, 1999
was $3.8M or $0.18 per share compared to $3.3M or $ 0.17 per share
for the same quarter the previous year. Total consolidated loss
for the first nine months of 1999 was $12.3M or $.55 per share
compared to $9.5M or $.48 per share for the same period in 1998.
The Company reported $0.1M in revenue for the third quarter of
1999 attributable to payments related to partnership agreements,
compared to no reported revenue for the same period in 1998. This
is expected, as SYNSORB's products are still under development.
For the first three quarters of 1999, consolidated development
expenses were $8.7M compared with $6.6M for the first three
quarters of 1998. For the third quarter, consolidated development
expenses were $3.1M compared with $2.3M during the same period in
1998. This increase is attributable to increased costs associated
with the SYNSORB Pk(R) program in Argentina and the United States,
as well as increases in process development costs and production
of clinical trial materials.
A major highlight of the clinical development program occurred
during the quarter as SYNSORB announced exceptional results from
an interim analysis of the Phase II trial for SYNSORB Cd(R). It
was revealed that SYNSORB Cd(R) reduced the rate of recurrence of
Clostridium difficile Associated Diarrhea (CDAD) by 80%, far
better than the 50% reduction that is considered to be a
significant clinical benefit and what would have been considered
'successful' according to the trial protocol. Because of this
early success the Company has commenced planning for Phase III
pivotal trials, expected to commence early in the second quarter
of the new year. Recruitment into the Phase II trial has been
discontinued since it has already met its clinical objectives,
many months earlier than expected.
"SYNSORB's third quarter of 1999 brought spectacular news in the
development of SYNSORB Cd(R) and also saw continued progress with
SYNSORB Pk(R),"- said David Cox, Ph.D., President and Chief
Executive Officer of SYNSORB. "Not only did we announce
outstanding clinical results for SYNSORB Cd(R), but we also
finalized our first marketing and distribution agreement for
Canada with Paladin Labs, Inc. The SYNSORB Cd(R) program clearly
has taken a major step forward. SYNSORB Pk(R) is also making
excellent progress in its clinical program: recruitment passed the
400 patient mark during the quarter and we were also delighted
that the product was designated 'Fast Track' by the US FDA".
Consolidated operating expenses for the third quarter of 1999 were
$1.1M, compared with $1.0M for the same period in 1998. During
the first nine months of 1999 and 1998, operating expenses were
$3.1M. The Company's consolidated total expenses for the first
nine months of 1999 were $13.4M compared with $10.0M for the
corresponding period in 1998. In the third quarter of 1999 total
expenses increased to $4.7M as compared with $3.4M during the same
period in 1998. This increase is largely due to development costs
as noted above as well as manufacturing and increased efforts in
the Business Development area.
On the corporate development front, SYNSORB's subsidiary,
Oncolytics Biotech Inc. (ASE:ONC) concluded two private placements
raising net proceeds of $1.9M, and subsequent to the quarter
ending, concluded an Initial Public Offering of 4.0M common shares
raising $3.4M. After these transactions, SYNSORB holds 6.75M
shares in interest in Oncolytics Biotech Inc. (49.5% of the issued
and outstanding shares) an asset of substantial value to SYB
shareholders. This 'autonomy' approach to its subsidiary
companies and pipeline projects is fully consistent with SYNSORB's
strategy of full focus on the development of SYNSORB Pk(R) and
SYNSORB Cd(R), with all other development projects being
self-financed and independently managed.
As at September 30, 1999 the Company's consolidated cash and
investment balance was $13.2M as compared to $11.6M as at
September 30, 1998.
SYNSORB is a Canadian-based pharmaceutical company dedicated to
drug development and manufacturing. The Company has two
late-stage products, both of which are based on SYNSORB's
proprietary carbohydrate chemistry platform technology. SYNSORB
Pk(R) is in Phase III clinical trials, and is designed to prevent
the progression to Hemolytic Uremic Syndrome (HUS) in children who
have contracted verotoxigenic E. coli (VTEC) infections, including
E. coli O157:H7. SYNSORB Cd(R) will commence Phase III trials in
the first part of next year, and is designed to treat recurrent
antibiotic-associated diarrhea (CDAD), a common hospital acquired
infection. SYNSORB has built a cGMP-compliant manufacturing
facility that has the capacity to meet or exceed the expected
global demand for the Company's products. A pipeline of future
products is accessible through subsidiary companies and SYNSORB's
carbohybrid program.
This release contains certain forward-looking statements which
involve known and unknown risks, delays, uncertainties and other
factors not under the Company's control which may cause actual
results, performance or achievements of the Company to be
materially different from the results, performance or expectations
implied by these forward-looking statements. These factors include
results of current or pending clinical trials, actions by the
FDA/HPB and those factors detailed in the Company's registration
statement on Form 20 F filed with the Securities and Exchange
Commission.
[QUARTERLY REPORT & CONTACT INFORMATION FOLLOW]
/T/
SYNSORB Biotech Inc.
Consolidated Interim Balance Sheets
As at September 30
(000's)
1999 1998
------------------
ASSETS
Current assets
Cash and term deposits $ 13,241 $ 11,574
Accounts receivable 202 482
Prepaid expenses 66 122
Advance to a director - 50
----------------------
13,509 12,228
Capital assets (note 1) 22,234 14,158
----------------------
35,743 26,386
----------------------
----------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accruals 1,436 1,770
Current portion of long-term debt 2,713 332
----------------------
4,149 2,102
Non-current liabilities
Alberta Heritage Foundation 537 387
Long-term debt (less current portion) 8,876 5,905
----------------------
9,413 6,292
Minority Interest (note 2) 1,270 -
Shareholders' equity
Issued - 31,399,912 common shares 58,597 39,438
(1998 - 20,121,686)
Deficit (37,686) (21,446)
----------------------
20,911 17,992
----------------------
$ 35,743 $ 26,386
----------------------
----------------------
NOTES
1. Acquisition of Oncolytics Biotech Inc. (OBI)
Effective April 21, 1999, the Company acquired 100% of the
issued and outstanding common shares of Oncolytics Biotech Inc.
for total consideration of $2,500,000 comprised of $2,413,459 of
SYNSORB common shares and cash of $86,541. Additional
consideration, to a maximum of $4,000,000, is contingent upon
completion of four specific pre-determined milestones. In
addition, certain royalty payments are due based on various
future revenues and arrangements. The amount by which
SYNSORB's purchase price exceeded the underlying net book value of
the assets and liabilities was $2,500,000.
2. Gain on dilution of investment in subsidiary
During the third quarter OBI closed two private placements for
net proceeds of $1,904,998. These two private placements reduced
the Company's interest in OBI from 100% to 70.0% resulting in a
gain of $603,000.
3. Subsequent event
Subsequent to September 30, 1999, OBI filed a prospectus for the
issuance of 4,000,000 common shares, converted the Special
Warrants and Warrants to 2,899,997 common shares, and began
trading on the Alberta Stock Exchange on November 8, 1999. The
result of this Initial Public Offering was to reduce the
Company's interest in OBI to 49.5%.
SYNSORB Biotech Inc.
Consolidated Interim Statements of Loss and Deficit
For the nine months ending September 30
(000's)
1999 1998
---------------------
REVENUE
Revenue $ 85 $ -
OTHER INCOME
Interest and other 391 520
EXPENSES
Research and development 8,679 6,585
Operating 3,082 3,107
Amortization 500 327
Interest on long-term debt 1,101 -
------------------------
13,362 10,019
------------------------
Loss before the following 12,886 9,499
Gain on dilution of investment in
subsidiary (note 2) (603) -
------------------------
12,283 9,499
Minority interest (32) -
------------------------
Net loss for the period 12,251 9,499
Deficit, beginning of period 25,435 11,947
------------------------
Deficit, end of period 37,686 21,446
------------------------
------------------------
Loss per common share $ 0.55 $ 0.48
------------------------
------------------------
SYNSORB Biotech Inc.
Consolidated Interim Statements of Cash Flows
For the nine months ending September 30
(000's)
1999 1998
---------------------
OPERATING ACTIVITIES
Net loss for the period $ (12,251) $ (9,499)
Add non-cash items
Amortization 500 327
Gain on dilution of investment in
subsidiary (note 2) (603) -
Minority interest (32) -
Change in non-cash working capital balances
relating to operating activities 652 (232)
------------------------
(11,734) (9,404)
------------------------
INVESTING ACTIVITIES
Purchase of capital assets (4,028) (10,444)
Investment in subsidiary (note 1) (87) -
Change in non-cash working capital balances
relating to investing activities (559) 851
------------------------
(4,674) (9,593)
------------------------
FINANCING ACTIVITIES
Common shares issued on exercise of
options and warrants 298 711
Common shares issued on private
placements (note 2) 1,905 8,213
Net proceeds from share offering 16,448 -
Repayment of long-term debt (1,476) -
Proceeds from long-term debt 150 -
------------------------
17,325 15,161
------------------------
Increase (decrease) in cash and term
deposits during the period 917 (3,836)
Cash and term deposits, beginning of period 12,324 15,410
------------------------
Cash and term deposits, end of period $ 13,241 $ 11,574
------------------------
------------------------
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
The Equicom Group
Jason Hogan
Investor Relations
(416) 815-0700 ex 222
(416) 815-0080 (FAX)
or
SYNSORB Biotech Inc.
Doug Ball, CA
VP Finance and CFO
(403) 283-5900
(403) 283-5907 (FAX)
or
SYNSORB Biotech Inc.
Mr. Doug Froom
VP Business Development
(403) 283-5900
(403) 283-5907 (FAX)
synsorb.com
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