Third quarter report:
sedar.com
Message to Shareholders, November, 2002
Our forward momentum established in the preceding reporting periods continued to build in the
third quarter. Progress was made on several important fronts ranging from our strong current
financial position to the successes achieved in the clinical development of our lead drug
compound, ISA247. The most significant contributing factor to our continuing strong
performance has been our strategic partnership with Roche. Our global collaboration
agreement has had a positive and pronounced effect on virtually every operational area of the
Company. The benefits of our alliance will become apparent as you read this letter.
Our Company continues to build a strong financial position. Cash and short term investments at
the end of the third quarter were $71.18 million up from $67.27 million from the end of the
previous quarter and $53.28 million as at December 31, 2001.
For the second consecutive reporting period the Company has recorded positive earnings.
Isotechnika earned $3.95 million or $0.06 per share for the three months ended September 30,
2002. Year to date, we have recorded gross revenues of $18.44 million with a net profit of $3.82
million or $0.06 per share.
One of the quarterly highlights was the achievement of our first scientific milestone under the
terms of our agreement with Roche for the successful completion of a non-human toxicity study.
In recognition of this milestone, the Company received a cash payment of $6.28 million. Our
financial results were also positively impacted by the contribution of $2.45 million from Roche
representing its share of the research and development costs for ISA247 for the three months
ended September 30, 2002.
In the past three months, we have made significant advances in the clinical development of
ISA247. Full patient recruitment has now been achieved in both the Phase 2 psoriasis trial and
the Phase 2A kidney transplant trials. As soon as these trials have been completed, the data
from both trials will be compiled and analyzed and final reports will be released.
Our new laboratory facility is now close to completion. In December, we will be moving our
equipment and personnel from our current west end laboratory over to the new location in south
Edmonton. This new facility will greatly enhance our research and development capabilities to
satisfy the increasing requirements of our ramped up clinical development program for ISA247.
This modern laboratory will also enable us to more adequately support the discovery of new
drugs and the further development of existing compounds in our pipeline. This facility will
enable the Company to leverage more fully the proven expertise of its internationally recognized
scientific team in the area of immunosuppressive drug technologies.
Our scientific team and its work in the field of immunosuppression continues to be recognized by
the global scientific, medical, and scholarly communities. Isotechnika receives many invitations
to present at premier international conferences. In this reporting period, Dr. Randall Yatscoff
presented interim clinical results on our Phase 2A kidney transplant trial at the International
Congress of the Transplantation Society in Miami, Florida in late August. Dr. Yatscoff also
recently presented a talk entitled “Future Low Toxicity Immunosuppressive Agents in the Roche
Portfolio”, at an International Transplantation meeting in Monte Carlo on November 14-16,
2002. This meeting was attended by hundreds of leading transplant physicians and scientists
along with Roche representatives. On December 4, 2002, Drs. Yatscoff and Foster will be
attending the Recent Advances in the Treatment of Dermatological Disorders conference in
London, UK, to make a presentation entitled, “ISA247: A Novel Calcineurin Inhibitor”. We
will be issuing a press release on our participation in this conference and the powerpoint
presentation of the talk will be made available to our investors on our website.
The Company also initiated a Normal Course Issuer Bid through the facilities of the TSX, in
September. Under the terms of this bid, the Company proposed to purchase, for cancellation, up
to 2,000,000 Common Shares for a period commencing September 30 to October 1, 2003. In
view of the intrinsic value of our landmark agreement with Roche, our strong financial position,
the consistent and positive performance of ISA247 in clinical trials and the untapped potential of
our existing and potential new and complimentary technologies in our drug pipeline, the
Company felt it was necessary and prudent to intervene in the market to support shareholder
value. To date, we have purchased 109,200 shares of our company stock for cancellation.
In summary, we continue to be pleased with the company’s progress. We are delighted with our
strategic partnership with Roche and the cooperative and positive working relationship which is
being forged between our organizations. The clinical development of our novel drug ISA247
continues to advance. We will continue to work hard to maintain this momentum.
With Sincere Regards,
(Signed) Robert Foster (Signed) Randall Yatscoff
Robert T. Foster, Ph.D. Randall W. Yatscoff, Ph.D.
Chairman and CEO President and COO |
