5/20/02
ISOTECHNIKA INC ("ISA-T") - First Quarter 2002 Financial Results - Highlighted by Agreement with Roche
Isotechnika Inc. reported its results for the first quarter ended March 31, 2002
The Company, during the period ended March 31, 2002 received a $3.2 million review fee, recorded as licensing and review fee revenue, and a $4.7 million equity investment as consideration for Roche to exercise its option to engage in partnership discussions and enter an exclusive 45 day period to negotiate a definite joint drug development agreement with Isotechnika Inc. On April 9, 2002, the Company signed a Development Collaboration and Licensing Agreement with Roche for the global co-development and commercialization of Isotechnika's innovative immunosuppressive drug ISA(TX)247. This agreement represents the largest drug development deal in Canadian history for a company at this stage of development. The deal closed on April 26, 2002 after clearance was received from the United States Federal Trade Commission pursuant to its review of the transaction under the
Hart-Scott-Rodino regulations. In May, 2002, the Company received additional payments totalling $21.2 million, made up of $7.9 million as a licensing fee and $13.3 million as an equity investment. The Company to date has received total upfront proceeds of $29.1 million from Roche.
As a result of the $3.2 million review fee, revenue for the first quarter ended March 31, 2002 increased to $3.9 million as compared to $0.9 million for the first quarter of 2001 while licensing and review fee revenue was $3.2 million as compared to nil for the first quarter ended March 31, 2001.
Total consolidated expenses for the first quarter ending March 31, 2002 were $7.3 million as compared to $4.2 million for the first quarter of 2001. The increase in expenses was primarily attributable to higher research and development expenses related to the continued development of the Company's immunosuppressive drug, ISA(TX)247 Research and development increased to $5.3 million for the three months ended March 31, 2002 from $2.6 million for the three months ended March 31, 2001. This increase reflected the costs associated with ISA(TX)247 Phase 2 human clinical trials for renal transplantation and psoriasis, additional non-human studies required for progression to Phase 3 and the cost of manufacturing ISA(TX)247 for the various trials.
Marketing, corporate and administration expenses increased to $1.6 million for the three months ended March 2002 from $1.1 million for the three months ended March 31, 2001. The increase in these expenses reflected additional corporate administrative expenses incurred in negotiating and securing the agreement with Roche, increased activity in investor relations and corporate communications and increased overall activity levels.
As a result of the above noted items, the consolidated net loss for the first quarter ended March 31, 2002 was $3.3 million or $.05 per share as compared to a net loss of $3.3 million or $.07 per share for the first quarter ended March 31, 2001.
At March 31, 2002, the Company had cash and short-term investments of $52.7 million. Combined with the additional $21.2 million in payments received by the Company subsequent to March 31, 2002, the Company, as of the current date, is in a strong cash position with cash and short term investments totalling approximately $70 million.
About Isotechnika Inc.
Isotechnika Inc. and Roche recently signed an agreement for the global co-development and commercialization of Isotechnika's innovative immunosuppressive drug ISA(TX)247. Isotechnika is an international Life Sciences company headquartered in Edmonton, Alberta, Canada with additional operations in Arizona. The company is focused on the development of immunosuppressive therapeutic drugs for use in organ transplant patients and in the treatment of autoimmune diseases. Its founders and scientific team have developed a novel, multi-platform drug, ISA(TX)247, which has progressed through discovery, pre-clinical and Phase 1 human clinical trials in less than five years. ISA(TX)247 is currently undergoing Phase 2 human clinical trials in renal transplantation and psoriasis and has the potential to become the market leader in immunosuppressive therapy; an established market for drugs of this class is in excess of 2.2 billion USD per year globally. Isotechnika is a S&P/TSX Composite Index company publicly traded under the symbol ISA, listed on Canada's senior board, the Toronto Stock Exchange. More information on Isotechnika can be found at www.isotechnika.com.
Isotechnika Inc.
Consolidated Balance Sheets
(expressed in thousands of Canadian dollars)
March 31, December 31,
2002 2001
$ $
(Unaudited) (Audited)
Assets
Current assets
Cash and cash equivalents 48,451 49,037
Short-term investments (quoted market
value-$4,334 December 31,2001-$4,392) 4,239 4,239
Accounts receivable 639 616
Inventories 812 870
Prepaid expenses and other 831 938
54,972 55,700
Capital assets 4,432 1,935
Patent costs 1,398 1,368
60,802 59,003
Liabilities
Current liabilities
Accounts payable and accrued liabilities 2,542 2,629
Current portion of long-term debt and
obligations under capital leases 217 113
2,759 2,742
Long-term debt and obligations under capital
leases 358 91
3,117 2,833
Shareholders' Equity
Share capital 92,583 87,761
Deficit (34,898) (31,591)
57,685 56,170
60,802 59,003
Isotechnika Inc.
Consolidated Statement of Operations
(expressed in thousands of Canadian dollars, except per share amounts)
March 31, December 31,
2002 2001
$ $
(Unaudited) (Audited)
Revenue
Licensing and review fee revenue 3,180 -
Contract analysis and product sales 333 688
Interest 431 234
3,944 922
Expenses
Research and development 5,324 2,602
Corporate administration and marketing 1,593 1,078
Contract analysis and product sales 215 444
Amortization 148 61
Interest on long-term debt and
obligations under capital leases 4 4
7,284 4,189
(3,340)
(3,267)
Other income
Gain on sale of capital assets 20 2
Gain on foreign exchange 13 -
33 2
Net loss for the period (3,307) (3,265)
Basic loss per common share (0.05) (0.07)
Weighted average number of common shares
outstanding (in thousands) 60,381 47,077
Isotechnika Inc.
Consolidated Statement of Deficit
(expressed in thousands of Canadian dollars)
March 31, December 31,
2002 2001
$ $
Deficit - Beginning of period (31,591) (19,803)
Net loss for the period (3,307) (3,265)
Deficit - End of period (34,898) (23,068)
Isotechnika Inc.
Consolidated Statement of Cash Flows
March 31, December 31,
2002 2001
$ $
Cash provided by (used in)
Operating activities
Net loss for the period (3,307) (3,265)
Items not affecting cash
Amortization 148 63
Gain on sale of capital assets (20) (2)
(3,179) (3,204)
Net change in other operating
assets and liabilities 55 (1,164)
(3,124) (4,368)
Investing activities
Purchase of capital assets (2,691) (125)
Proceeds on sale of capital assets 83 16
Patent costs (47) (84)
(2,655) (193)
Financing activities
Issuance of share capital 4,822 1,091
Proceeds from long-term debt and
capital leases 441 -
Repayment of long-term debt and
capital leases (70) (19)
5,193 1,072
Decrease in cash and cash equivalents (586) (3,489)
Cash and cash equivalents - Beginning of
period 49,037 18,103
Cash and cash equivalents - End of period 48,451 14,614
TEL: (780) 487-1600 Gordon Agopsowicz, Director of Investor FAX: (780) 480-4105 Relations Email: gagopsowicz@isotechnika.com
Mr. Dennis Bourgeault C.A., CFO
Isotechnika Inc. Email: dbourgeault@isotechnika.com |
