Mark: Q 3 results just out. I'll post and then comment later. Other comments?
Dimethaid Research announces third quarter results
Toronto, Apr. 26, 1999 — Dimethaid Research Inc. (TSE: DMX) today released its third quarter results for fiscal year 1999, for the period ending February 28, 1999. The corporate focus for the first nine months of the fiscal year continues to be preparing for the commercial launch of the Company's first product, PENNSAID® Lotion.
Through the first nine months of the fiscal year, the Company has recorded revenues of $0.9 million, and a net loss of $11.6 million or $0.31 per share. This compares with revenue of $0.9 million and a net loss of $6.2 million or $0.17 per share last year. Revenues have been generated primarily by the Company's line of Dioptic products.
The Company's R&D expenses increased by approximately $4.9 million for the nine months ended February 28, 1999 compared to the same period in 1998. This increase of about $500,000 is attributable to costs associated with the ongoing interaction between the Company and the respective regulatory approval agencies for PENNSAID® Lotion (in Canada, the United Kingdom and the United States) as well as the additional studies contemplated to expand the Company's proprietary transdermal delivery technology.
The increase in Oxo Chemie R&D of $4.4 million is a result of that company's ongoing Phase III clinical trial of WF10 for people with late-stage HIV disease. This trial is underway at numerous sites in the United States and has recently been expanded to include two Canadian sites. The follicular lymphoma study of WF10 also continues and has been expanded to include a second U.S. site. R&D spending by Oxo Chemie is reflected in Dimethaid's reported results but does not affect its cash balance as the investment was made in previous fiscal years*. Dimethaid owns 20% of the otherwise privately held Oxo Chemie, as well as all Canadian rights to products emanating from their proprietary molecule.
Other expenditure increases were reported in marketing ($345,000 in 1999 versus $227,000 in 1998) as the Company continues to prepare for the launch of PENNSAID® Lotion in Canada. Dimethaid International Inc., the holder of all non-Canadian rights to PENNSAID® Lotion, is negotiating marketing alliances for distribution in the rest of the world. Administrative expenses also increased ($1.9 million as of Feb. 28, 1999 compared to $1.7 million in 1998) due in part to increased activity in the investor relations department.
Based upon the cash resources of $4.3 million (compared to $6.9 million at Feb. 28, 1998), the Company believes there are sufficient funds to last into early 2000, a sufficient time frame within which to realize the commercialization of its lead product, PENNSAID® Lotion. The conversion of the remaining 650,586 compensation options, issued in conjunction with our 1997 public offering, into common shares (on a 1:1 basis), resulted in a capital infusion of approximately $1.8 million. WARNING: The Company relies on litigation protection for "forward-looking" statements.
Consolidated Balance Sheet, as at February 28 (unaudited)
Consolidated Balance Sheet, as at February 28
(unaudited) 1999 1998*
Assets $ $
Current Assets
Cash and cash equivalents 4,346,150 6,937,156
Accounts receivable 149,002 137,173
Inventory 703,068 549,147
Prepaid Expenses & Deposits 290,755 217,273
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Total current assets 5,488,975 7,840,749
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Capital assets 2,293,976 2,137,498
Research funding provided
to Oxo Chemie AG 11,241,266 21,267,053
Distribution rights 4,479,141 4,479,141
Other intangibles 184,479 209,260
Goodwill 115,134 148,043
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Total Assets 23,802,971 36,081,744
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Liabilities and Shareholders' Equity Current
Accounts payable and accrued
liabilities 428,310 491,627
Current portion of long-term debt 72,000 -
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Total current liabilities 500,310 491,627
Long-term debt 924,000 1,068,000
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Total liabilities 1,424,310 1,559,627
Shareholders' Equity
Capital stock 63,445,679 60,955,899
Deficit (41,067,019) (26,433,782)
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Total shareholders' equity 22,378,661 34,522,117
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Total Liabilities and
Shareholders' Equity 23,802,971 36,081,744
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----------------------------------------------------------------------
Consolidated Statement of Operations and Deficit,
For the Nine Month Period Ended February 28
(unaudited) 1999 1998*
$ $
Revenue 921,023 937,286
Cost of sales 572,493 554,231
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Gross profit 348,530 383,055
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Interest and other income 191,893 254,044
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540,423 637,099
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Expenses Research and development by
Oxo Chemie AG 7,785,956 3,409,169
Research and development 1,280,348 785,372
Administrative 1,904,704 1,668,656
Selling 612,629 568,369
Amortization 171,336 163,780
Marketing 345,023 227,792
Interest 64,806 17,184
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12,164,802 6,840,322
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Net loss for the period (11,624,379) (6,203,223)
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Deficit, beginning of period (29,442,639) (20,230,559)
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Deficit, end of period (41,067,019) (26,433,782)
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Loss per common share (0.31) (0.17)
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Consolidated Statement of Changes in Financial Position,
For the Nine Month Period Ended February 28
(unaudited) 1999 1998*
Operating Activities $ $
Net loss for the period (11,624,379) (6,203,223)
Add items not affecting cash- Research & development by
Oxo Chemie AG 7,785,956 3,409,169
Amortization 171,336 163,780
Net change in non-cash operating
working capital items (53,122) (713,950)
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Cash used in operating activities before funding
Oxo Chemie AG (3,720,209) (3,344,224)
Research and development funds
advanced to Oxo Chemie AG - (13,863,970)
----------------------------------------------------------------------
Cash used in operating activities (3,720,209) (17,208,194)
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Investing Activities
Acquisition of capital assets (130,614) (1,983,841)
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Cash used in investing activities (130,614) (1,983,841)
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Financing Activities Issuance of common stock
(net of expenses) 2,005,791 1,521,360
Repayment of long-term debt (54,000) -
Increase in long-term debt 1,068,000
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Cash provided by financing
activities 1,951,791 2,589,360
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Net (decrease) in cash during
the period (1,899,032) (16,602,675)
Cash and cash equivalents
- beginning of period 6,245,182 23,539,831
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Cash and cash equivalents
- end of period 4,346,150 6,937,156
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* Restated to reflect a change in accounting policy for Oxo Chemie AG.
Please refer to note 5(b) in the Notes to the Consolidated Financial
Statements of the 1998 Annual Report.
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For further information, contact: Dimethaid Research Inc.
Peter Block, Investor Relations Manager
Tel: (905) 415-1446
e-mail: pblock@dimethaid.com
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1405 Denison St., Markham, Ontario L3R 5V2
Tel. 905-415-1446 Tollfree 1-888-398-3463 Fax 905-415-1440
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