SYNSORB Biotech Inc.(TSE:SYB.)(Nasdaq:SYBB) today reported its results for the third quarter and nine month period ended September 30, 2000.
As well as demonstrating improved financial performance compared to the same period in 1999, SYNSORB also made significant progress on other fronts in the quarter. Final data from the SYNSORB Cd(R) Phase II trial became available and confirmed the trend towards efficacy reported earlier from preliminary analyses. The Phase III trials, initiated in March of this year, gained momentum as patient enrollment accelerated. SYNSORB Pk(R) Phase III interim analysis revealed a positive trend in data from a sub-group. The Company's financial position was significantly strengthened as a result of the market performance of Oncolytics Biotech Inc. (TSE:ONC) in which it holds a 39% equity interest.
"SYNSORB remains in a strong financial position and continues to make progress in the development of our products," said David Cox, Ph.D., President and Chief Executive Officer of SYNSORB. "The SYNSORB Cd(R) trials continue to gain momentum, and new information about SYNSORB Pk(R) will help us plan for completion of the development program. Finally, we are of course delighted with the performance of our investment in Oncolytics."
With respect to its clinical operations, SYNSORB made significant progress during the third quarter of 2000:
* SYNSORB Cd(R) Phase II final results demonstrated that patients receiving the high dose of SYNSORB Cd(R) experienced a 61% relative risk reduction in the recurrence of C. difficile associated diarrhea compared to placebo.
* SYNSORB Cd(R) Phase III trials gained further momentum through the quarter as enrollment continued to increase. The Company is taking steps to yet further enhance recruitment and is well on the way to establishing the 160 clinical sites targeted for this study.
* SYNSORB Pk(R) Phase III interim analysis showed encouraging results in a sub-group of children who were treated within two days of E. coli symptoms. To verify these results, a double-blind, placebo-controlled pivotal study will be necessary and planning for this is underway.
* Compassionate release: Once again, the Company was asked to ship SYNSORB Pk(R) in response to an E. coli O157:H7 outbreak. The US Food and Drug Administration (FDA) authorized the shipment of SYNSORB Pk(R) to Milwaukee, Wisconsin.
As at September 30, 2000 SYNSORB's cash and investment balance was $21,968,000 compared to $11,550,000 as at December 31, 1999. In the first quarter of the year SYNSORB concluded a successful offering that raised net proceeds of $22,315,000.
SYNSORB owns 39% of Oncolytics amounting to 6,750,000 common shares. Of these shares, 675,000 are now tradable with the balance being released from escrow in tranches over the next 45 months.
The Company reported $200,000 in revenue in the nine months ended September 30, 2000, consisting of a first quarter up-front payment received from a partnering agreement, and a second quarter milestone payment received upon the issuance of a patent relating to INH. This is compared to revenue of $85,000 reported in the same period in 1999.
Research and development expenses for the nine months ended September 30, 2000 were $6,104,000, compared to $8,679,000 during the same period in 1999. The 1999 amount included $537,000 relating to the activities of Oncolytics and INH which are no longer consolidated in SYNSORB's results. For the third quarter, development expenses were $1,588,000 compared to $3,103,000 during the same period in 1999. Decreased development expenses for 2000 can also be attributed to reduced clinical trial costs in the SYNSORB Pk(R) program, and planned cost savings in R&D activities. The North American sites in the SYNSORB Pk(R) Phase III trials were put into recess over the winter period and remained closed through the interim analysis. The Company continues to plan a pivotal study for SYNSORB Pk(R), and will not reinstate sites until final determinations have been made for this study.
Operating expenses for the nine months ended September 30, 2000 were slightly lower at $2,848,000 compared to $3,082,000 for the same period in 1999. For the third quarter 2000, operating expenses remained relatively constant at $1,056,000 compared to $1,062,000 for the third quarter 1999. The Company's total expenses for the nine months ended September 30, 2000 were $10,484,000 compared to $13,362,000 during the same period in 1999, primarily due to reduced R&D expenditures and reductions in the clinical program for SYNSORB Pk(R). Total expenses for the third quarter 2000 were $3,146,000 compared to $4,691,000 in the same period in 1999.
SYNSORB reported a net loss for the nine months ended September 30 2000 of $5,853,000 or $0.153 per share, compared to a loss of $12,251,000 or $0.550 per share, for same period the previous year. This is primarily due to the year to date gain on dilution of the Company's investment in Oncolytics, reduction in research and development costs, as well as the sale of SYNSORB's subsidiary company, INH Technologies Incorporated (INH) during the first quarter. The consolidated financial statements as at December 31, 1999 include the accounts of Oncolytics and INH. Due to the Company's reduction in ownership of Oncolytics the equity method of accounting was adopted to account for this investment. Total loss for the third quarter was $2,495,000 or $0.064 per share, compared to $3,796,000 or $ 0.181 per share, for the same quarter the previous year.
In accordance with the recommendation of the Canadian Institute of Chartered Accountants, on January 1, 2000 the Corporation retroactively adopted, without restatement of periods prior to January 1, 2000, the liability method of accounting for income taxes.
About SYNSORB
SYNSORB is a Canadian-based pharmaceutical company dedicated to drug development and manufacturing. The Company's two Phase III products have been granted "Fast Track" designation by the FDA for their respective indications and are both based on SYNSORB's proprietary carbohydrate chemistry platform technology. SYNSORB Pk(R) 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) is a potential treatment for recurrent C. difficile antibiotic associated diarrhea (CDAD), a common hospital acquired infection. SYNSORB maintains approximately 39% of the shares of Oncolytics, a company focused on the development of REOLYSIN (reovirus) as a potential cancer therapeutic. 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 SYNSORB's carbohybrid program.
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