Dimethaid announces fourth quarter and fiscal 2004 year-end financial results
TORONTO, Aug. 17 /CNW/ - Pharmaceutical developer, Dimethaid Research
Inc. (TSX: DMX) today reported consolidated financial results for fiscal 2004.
Unless specified otherwise, all amounts are in US dollars.
For the year ended May 31, 2004, revenue reached $5.1 million, compared
to $950,000 for the previous fiscal year. For the three months ended May 31,
2004, revenue was $1.5 million, up from $658,000 for the fourth quarter, 2003.
The substantial annual growth was due primarily to sales of Pennsaid(R), the
company's first commercial product based on its proprietary transcellular
technology.
"Pennsaid represents a novel treatment idea for many Canadian doctors,
yet last year, despite the educational challenges, it was among the country's
top ten, best-selling new drugs," said Rebecca E. Keeler, president and CEO.
"To have done so well, so early, suggests excellent revenue potential, not
only domestically but through new, overseas licensing agreements, as well -
one course we plan to pursue aggressively in the coming year."
Year 2004 and subsequent highlights:
- Marketing & distribution partner Italchimici SpA launched Pennsaid in
Italy and Malta.
- Dr. Peter Tugwell, Faculty of Medicine, U. of Ottawa, presented
results from an efficacy & safety equivalence trial at the European
Congress of Rheumatology, successfully comparing Pennsaid to the
maximum daily dose of oral diclofenac.
- Regulatory agencies in Greece, Iceland and Portugal approved Pennsaid.
- European examiners notified Dimethaid of an intent to grant wholly
owned subsidiary Oxo Chemie AG, (now Dimethaid AG), extended WF10
patents in 19 countries. Patent claims cover potential treatment for
autoimmune disease, organ transplant or graft rejection, lymphoma, and
inflammation manifested as hepatitis or chronic obstructive pulmonary
disease.
- Dimethaid completed an agreement for a private placement of special
warrants, raising $9.9 million in net proceeds.
- In2Focus Sales Development Services Ltd. signed an agreement to
distribute Pennsaid throughout the United Kingdom.
- Dimethaid submitted a series of applications seeking regulatory
approval for Pennsaid in five Caribbean jurisdictions. (Under the U.K.
approval granted in fiscal 2001, applications filed this year in the
Bahamas, Bermuda and Guyana are sufficient to allow marketing Pennsaid
in those countries without additional authorization.)
- Jaba Farmacêutica S.A. signed an agreement to distribute Pennsaid in
Portugal, Madeira and the Azores.
- Vianex S.A. signed an agreement to distribute Pennsaid in Greece.
- Dimethaid and Solvay Pharma Inc. signed a Pennsaid co-promotion
agreement for Canada. The terms include a revenue sharing formula and
require each company to contribute equally to sales and marketing
initiatives.
- On Dimethaid's behalf, In2Focus brokered a co-funding arrangement with
a major pharmaceutical company, effectively doubling the U.K. sales
force.
- Jamaican regulatory authorities granted a license for over-the-counter
Pennsaid distribution.
- Dimethaid launched two postmarketing clinical trials designed to
establish the safety of Pennsaid as add-on or longer-term therapy.
- In response to an application filed by Oxo Chemie prior to its
acquisition, the U.S. Patent and Trademark Office granted additional
protection covering the use of real-time polymerase chain reaction
technology to evaluate WF10 efficacy when treating patients with
HIV/AIDS, cancer, autoimmune diseases, hepatitis, and several other
diseases.
- Health Canada approved the protocol for a Phase I/II clinical trial
with Penecure(TM), the company's first topical antifungal treatment.
Shortly after year-end, the U.S. Food and Drug Administration approved
the same trial.
- Following year-end, Dimethaid completed another agreement for a
private placement of special warrants, raising $2.7 million in net
proceeds.
- Also following year-end, the company was notified that regulatory
authorities in Trinidad & Tobago intend to approve Pennsaid
distribution.
Financial Results
-----------------
Net loss for the fourth quarter of fiscal 2004 was $8.6 million or $0.14
per share. Net loss for the year was $19.7 million or $0.39 per share,
compared to $11.4 million or $0.33 per share for the previous year. The
increase in net loss per share is primarily attributable to an arbitration
award due to the cancellation of the contract with the Company's former U.K.
distributor and a write-down of intangible assets.
Revenue for the fourth quarter ended May 31, 2004 was $1.5 million.
Revenue for the year ended May 31, 2004 totaled $5.1 million compared to
$950,000 for the year ended May 31, 2003. Pennsaid revenue for the fourth
quarter totaled $1.3 million. Total Pennsaid revenue grew to $4.5 million for
the year ended May 31, 2004, up from $433,000 for the year ended May 31, 2003.
This significant annual increase was primarily due to growth in Pennsaid sales
in Canada. In February 2004, Dimethaid entered into a co-promotion agreement
with Solvay Pharma, effectively doubling the Canadian sales force and
marketing resources for Pennsaid. The first full year of Pennsaid sales in
Italy and the relaunch of Pennsaid in the U.K. also contributed to revenue
growth during the year.
Gross profit for the fourth quarter was $932,000. Gross profit for the
year ended May 31, 2004 increased to $3.9 million, up from $503,000 in 2003.
The improvement stems from the significant growth of higher margin Pennsaid
sales during the year.
During the year, Dimethaid recognized $1.2 million in other revenue for
Pennsaid representing fees received for promotional and distribution rights in
Canada, Greece and Portugal.
Research and development expenses for the fourth quarter were
$1.2 million. Research and development expenses for the year ended May 31,
2004 were $2.2 million, down from $3.0 million for the comparable period last
year reflecting reduced spending on clinical development.
Administrative expenses for the fourth quarter were $545,000.
Administrative expenses for fiscal 2004 were $2.5 million versus $2.3 million
for fiscal 2003. Manufacturing overhead for the fourth quarter was $195,000.
Manufacturing overhead decreased to $895,000 in fiscal 2004, down from
$1.3 million for the previous year, reflecting increased absorption of fixed
manufacturing overhead costs into cost of sales.
Selling and marketing expenses for the fourth quarter were $2.8 million.
Selling and marketing expenses for fiscal 2004 totaled $9.4 million versus
$3.1 million for fiscal 2003. This increase is due to the Company's first full
year of Pennsaid marketing activities in Canada, the relaunch of Pennsaid in
the U.K. and the commencement of two postmarketing clinical trials for
Pennsaid.
In July 2004, the Company reported negative results from the initial
analysis of data from Oxo Chemie's Phase III HIV/AIDS study. A subsequent
review of the carrying value of intangible assets resulted in a $4.0 million
write-down of acquired technology, and a $209,000 write-down of goodwill.
Funds used in operating activities for the fourth quarter were
$3.0 million. Funds used in operating activities for the year ended May 31,
2004 were $11.5 million compared to $8.3 million for the same period last
year.
Net cash provided by financing activities in fiscal 2004 totaled
$11.1 million, including $9.9 million through a special warrant private
placement financing.
Subsequent to year-end Dimethaid completed a special warrant private
placement resulting in net proceeds of $2.7 million. |
