PROMETIC REPORTS ITS SECOND QUARTER 2011 HIGHLIGHTS, FINANCIAL RESULTS AND SUBSEQUENT EVENTS
- $1.0 million cash injection from long-term shareholders post June 30, 2011
- $1.3 million in repayable working capital grants from the Isle of Man Government of which $0.8 million is expected to be received in August, 2011
- Recognition of US $2.0 million revenue from Celgene Corporation deal following administrative milestone achievement
- $4.0 million order confirming stronger than anticipated H2-2011
LAVAL, QUEBEC, CANADA – August 15, 2011 – ProMetic Life Sciences Inc. (TSX: PLI) (“ProMetic”or the “Company“) today reported its financial results for the second quarter of 2011 and subsequent events. All amounts are in Canadian Dollars unless otherwise indicated. The financial information in regards to the three month period ended June 30, 2011 should be read in conjunction with the Company’s financial statements as well as the Management’s Discussion and Analysis dated August 10, 2011.
“Although amendments and delays to our clients’ programs clearly impacted our revenues for the first half of 2011, we expect a stronger second half for 2011 as well as additional agreement announcements with leading global pharmaceutical companies further validating our business model” said Mr. Pierre Laurin, ProMetic’s President and Chief Executive Officer. “We have continued making progress in establishing our bioseparation products and technologies as industry leading solutions in the second quarter of 2011, as demonstrated by the latest agreement and product order announcements,” added Mr. Laurin.
Q2 Corporate Highlights and Subsequent Events
- The Company obtained a total of $1.0 million in non-dilutive loans and private placement from long-term supportive shareholders. Of the $1.0 million, the Company secured subsequent to quarter-end, a $0.5 million loan from Les Castels de Vaudreuil Inc., a company managed by its President and current ProMetic Board member, Mr. Benjamin Wygodny and a $0.15 million private placement;
- The Company secured a $0.5 million repayable working capital grant from the Isle of Man Government’s Department of Economic Development and is in the process, subsequent to quarter end, of securing from it an additional $0.8 million for a total of $1.3 million;
- US$2 million deferred revenue from the transaction with Celgene Corporation has now been recognized as revenue in the second quarter of 2011 following the achievement of one of the administrative milestones;
- Subsequent to quarter-end, the Company announced the receipt of a $4 million follow-on purchase order pursuant to a long-term supply agreement entered into with a major global pharmaceutical company in 2009. This $4 million purchase order relates to the purchase of a proprietary Mimetic LigandTM affinity adsorbent developed and manufactured by ProMetic’s UK subsidiary, ProMetic Biosciences Ltd and is to be supplied and related revenues received during the third and fourth quarters of 2011;
- The Company announced the signing of an agreement by ProMetic’s UK subsidiary, ProMetic Biosciences Ltd (“PBL”), with a multinational corporation to improve an existing biopharmaceutical product manufactured in multi-ton quantities. The agreement provides ProMetic with initial service revenues of up to $0.8 million during 2011 and is anticipated to lead to a significant long-term agreement for the manufacture and supply of affinity resin when related target product profiles are achieved;
- The Company expanded and strengthened its partnership with the Wuhan Institute of Biologic Products (“WIBP”) and its parent company, China National Biotech Group (“CNBG”), following a series of successful milestone achievements, a close cooperation between the parties in recent years and ProMetic’s decision to establish its new facility to manufacture plasma-derived therapeutics.
“We are pleased to have been able to obtain timely additional cash injections through mostly non-dilutive means. These clearly indicate, once again, the support of some of our long standing shareholders as well as our firm commitment to avoiding as much as possible any unnecessary dilution to all our shareholders” commented Mr. Bruce Pritchard, the Company’s Chief Financial Officer. “We will continue to tightly control our costs and remain unequivocally committed to realize the expected sequential improvement of our financial performance” added Mr. Pritchard.
Second Quarter Financial Highlights
Total revenues for the second quarter of 2011, which were derived from the Protein Technologies unit, were $3.0 million compared with $5.3 million in 2010. The second quarter revenues came from sales of affinity adsorbents to major pharmaceutical companies as well as a second tranche of revenue recognized from the Celgene Corporation transaction. The difference in year over year comparison is explained by the fact that the Company was completing delivery, in the second quarter of 2010, of a substantial order announced in 2009 whereas delivery of substantial orders in 2011 are planned for the second half of the year, therefore making strictly quarter to quarter comparison less relevant.
The combined costs of goods sold and rechargeable research and development expenses for the quarter ended June 30, 2011, totalled $1.0 million compared to $1.4 million for the quarter ended June 30, 2010. This difference is explained by the mix of product sales from period to period and by the volumes of individual products sold within that mix.
Non rechargeable research and development expenses were $2.2 million for the quarter ended June 30, 2011, compared to $2.7 million for the quarter ended June 30, 2010.
The Company generated a net loss of $1.8 million or $0.00 per share (basic and diluted), for the second quarter ended June 30, 2011, as compared to a net loss of $0.9 million or $0.00 per share (basic and diluted) for the quarter ended June 30, 2010.
Operating costs for the quarter decreased to $4.5 million from $5.7 million in the previous year. This decrease was attributable partly due to positive foreign exchange movements and partly due to lower cost of goods sold associated with the revenue mix.
While lower than expected first-half year 2011 sales led to a difficult but manageable liquidity situation, Management’s outlook for the second half of 2011 remains positive as stronger revenues from the sale of goods and rendering of services are expected to materialize, as evidenced by the subsequent to quarter-end announcement by the Company of the receipt of a $4 million follow-on purchase order. Product relating to this $4 million purchase order is to be supplied during the third and fourth quarters of 2011. Additional agreements with prominent pharmaceutical companies are also expected to materialize in the second half of the year.
In the Proteins Technologies (Prion) division, the Company will continue to lobby alongside Macopharma for the adoption of the P-Capt® filter in the UK. The Company is hopeful that P-Capt® sales will commence following the reporting of the PRISM clinical study results, which is expected in late 2011.
In addition to seeking other industrial scale users for the prion reduction technology, ProMetic will continue to support Octapharma AG in the adoption of its product, OctaplasLG®. Octapharma remains positive regarding the ultimate regulatory approval of its OctaplasLG® product. Accordingly, the Company expects orders for its proprietary resin to recommence in late 2011.
In the Proteins Technologies (Plasma) division, the Company will pursue activities to set up its cGMP pilot manufacturing plant with a view to commencing operations as soon as possible. This plant, together with the results arising from activities at the Wuhan Institute of Biologic Products will be used by the Company to leverage its other commercial-scale opportunities for its proprietary plasma fractionation technology in other territories.
In the small molecule Therapeutics division, the Company continues to focus on business development activities. Partnering discussions continue with respect to PBI-1402, its NCE analogues and other therapeutics. It is Management’s goal that the Company close a strategic deal with a major pharmaceutical company and secure funding to further advance its various development programs within the second half of 2011.
In line with earlier commitments, Management continues to tightly control costs throughout the business, with a view to driving the Company towards self-sustainment and profitability.
Additional Information in Regards to the Three month Period ended June 30, 2011
About ProMetic Life Sciences Inc.
ProMetic Life Sciences Inc. (“ProMetic”) (prometic.com) is a biopharmaceutical company specialized in the research, development, manufacture and marketing of a variety of commercial applications derived from its proprietary Mimetic LigandTM technology. This technology is used in large-scale purification of biologics and the elimination of pathogens. ProMetic is also active in therapeutic drug development with the mission to bring to market effective, innovative, lower cost, less toxic products for the treatment of hematology and cancer. Its drug discovery platform is focused on replacing complex, expensive proteins with synthetic “drug-like” protein mimetics. Headquartered in Montréal (Canada), ProMetic has R&D facilities in the U.K., the U.S. and Canada, manufacturing facilities in the U.K. and business development activities in the US, Europe, Asia and in the Middle-East.
Forward Looking Statements
This press release contains forward-looking statements about ProMetic’s objectives, strategies and businesses that involve risks and uncertainties. These statements are “forward-looking” because they are based on our current expectations about the markets we operate in and on various estimates and assumptions. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. Such risks and assumptions include, but are not limited to, ProMetic’s ability to develop, manufacture, and successfully commercialize value-added pharmaceutical products, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of ProMetic to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. You will find a more detailed assessment of the risks that could cause actual events or results to materially differ from our current expectations on page 24 of ProMetic’s Annual Information Form for the year ended December 31, 2009, under the heading “Risk and Uncertainties related to ProMetic’s business”. As a result, we cannot guarantee that any forward-looking statement will materialize. We assume no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason, unless required by applicable securities laws and regulations. All amounts are in Canadian dollars unless indicated otherwise.
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ProMetic Life Sciences Inc.
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ProMetic Life Sciences Inc