Dimethaid Research announces first quarter financial results
TORONTO, Oct. 30 /CNW/ - Dimethaid Research Inc. (TSE: DMX) today
reported consolidated fiscal 2002 financial results for the three months ended
August 31, 2001. Unless specified otherwise, all amounts are in Canadian
dollars.
For the three months ended August 31, 2001, the Company continued to
invest heavily in research and development and in the Québec manufacturing
facility in preparation for the North American launch of PENNSAID(R) Topical
Solution. Hence, the Company incurred a net loss of $2.70 million ($0.06 per
share), compared with a net loss of $1.71 million ($0.04 per share) for the
three months ended August 31, 2000.
The third party contract manufacturers who supply Dioptic's ophthalmic
products are presently upgrading their manufacturing processes to meet new
international requirements, and this division has been experiencing serious
product shortages, which have affected the sales mix and product margins. The
Company expects this problem to be resolved by the fiscal year-end.
Consequently, consolidated sales for the three months ended August 31, 2001
were $96 thousand, compared to $236 thousand for the corresponding quarter in
the previous fiscal year, and consolidated gross profit declined to
$5 thousand from $100 thousand. Sales of PENNSAID(R) in the United Kingdom
could not be recognized in this fiscal quarter as the agreement with Provalis
Healthcare Ltd. provides for invoicing after the product has been received and
cleared for release following laboratory testing in the UK, a process which
can take up to six weeks. Consequently, shipments made during this quarter can
only be billed and therefore recognized in the next quarter.
Other income, which includes interest income, was $75 thousand for the
three months ended August 31, 2001, compared to $135 thousand for the previous
corresponding fiscal quarter, reflecting lower average cash balances.
Operating expenses have increased to $2.78 million for the three months
ended August 31, 2001, compared to $1.95 million for the three months ended
August 31, 2000, primarily due to significant increases in research and
development spending and expenses incurred for the Mutual Recognition
Procedure in Europe. Research and development expenditures were $1.22 million
for the three months ended August 31, 2001, compared to $0.37 million for the
three months ended August 31, 2000.
As the Company prepares for the launch of PENNSAID(R) in Canada, selling
expenses increased to $308 thousand from $273 thousand for the same period
last year. However, administration expenses for the three months ended August
31, 2001 decreased slightly to $1.14 million, from $1.20 million for the
previous corresponding fiscal quarter.
As at August 31, 2001, cash and cash equivalents were $219 thousand,
compared to $906 thousand as at May 31, 2001. During the quarter, the Company
effected a draw of $1.225 million, against the issuance of 195,746 common
shares, pursuant to its January 2001 private placement agreement with Acqua
Wellington North American Equities Fund, Ltd. As at the end of the fiscal
quarter, the Company had received approximately $4.7 million pursuant to this
agreement, which is in effect to February 2002. The notes receivable of $2.92
million represent funds advanced to Oxo Chemie, while the Company continues
the due diligence pursuant to a Letter of Intent to acquire control of Oxo
Chemie.
"During the first quarter, we continued to expand the markets for
PENNSAID(R) Topical Solution. We concluded, an agreement with A.S. Bryden &
Sons (Barbados) Ltd. for the distribution of PENNSAID(R) in twelve countries
within the Caribbean, with an estimated market of approximately US $30
million" said Rebecca Keeler, President and CEO. "Earlier this month, Austria,
Finland, Italy and Luxembourg agreed to grant approval of PENNSAID(R) under
the Mutual Recognition Procedure established in the European Union. Our
initial focus is on the completion of distribution agreements for these
countries. As we expand our markets, we are looking forward to further
approvals and distribution partners for PENNSAID(R)."
Note: As a reminder, the Annual Meeting of Shareholders will be held
today, Tuesday, October 30, 2001 at 4:30pm (local time) at the following
location:
The Design Exchange
234 Bay Street
Toronto, Ontario
T: 416-363-6121
<<
CONSOLIDATED BALANCE SHEETS
August 31 May 31
(in thousands of dollars) 2001 2001
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ASSETS
CURRENT
Cash and cash equivalents $ 219 $ 906
Accounts receivable 434 382
Notes receivable 2,917 2,385
Inventories 1,231 912
Prepaid expenses and other 218 119
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TOTAL CURRENT ASSETS 5,019 4,704
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LONG TERM ASSETS
Capital assets, net 6,503 6,256
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TOTAL ASSETS $ 11,522 $ 10,960
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 2,745 $ 1,299
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TOTAL LIABILITIES 2,745 1,299
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SHAREHOLDERS' EQUITY
Capital stock 81,501 79,685
Cumulative translation adjustment (11) (6)
Deficit (72,713) (70,018)
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TOTAL SHAREHOLDERS' EQUITY 8,777 9,661
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,522 $ 10,960
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CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
Three months ended
August 31 August 31
(in thousands of dollars, except per share data) 2001 2000
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REVENUE $ 96 $ 236
Cost of sales 91 136
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GROSS PROFIT 5 100
Other income 75 135
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80 235
EXPENSES
Research and development 1,220 368
Administration 1,137 1,204
Selling and marketing 308 273
Amortization 107 98
Interest expense 3 4
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TOTAL EXPENSES 2,775 1,947
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NET LOSS FOR THE PERIOD (2,695) (1,712)
NET LOSS PER COMMON SHARE $ (0.06) $ (0.04)
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>>
Dimethaid Research Inc. is a pharmaceutical company engaged in the
development and commercialization of innovative therapeutic products that
offer the potential to minimize the unwanted systemic effects of drug therapy
on the body. Dimethaid's proprietary drug delivery technology utilizes the
cell's tubule system to deliver drugs cell-to-cell. As a result, patients are
able to treat localized conditions, such as osteoarthritis, while limiting the
body's absorption of, and associated risks from, the medication. This
technology has been applied first to produce PENNSAID(R) Topical Solution. The
Company's business development strategy is to leverage its proprietary
transdermal delivery technology into additional commercial products. For
additional information on the Company, please visit www.dimethaid.com.
This release may contain forward-looking statements. Such statements
involve known and unknown risks, uncertainties and other factors outside
management's control that could cause actual results to differ materially from
those expressed in the forward-looking statements. A discussion of such risk
factors is included in the Company's AIF filed with the OSC and includes,
without limitation, risks regarding product development, clinical trials,
dependence on third parties for development and licensing arrangements, and
risks involving regulatory approval of products, and licenses and patents. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect subsequent events or circumstances.
%SEDAR: 00002418E
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For further information: Dimethaid Research Inc., Tel. (905) 415-1446,
info@dimethaid.com; Lippert/Heilshorn & Associates, Kim Golodetz, Tel.
(212) 838-3777; Bruce Voss, Tel. (310) 691-7100;
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