EDMONTON, Alberta, Aug. 14, 2012 (GLOBE NEWSWIRE) -- Isotechnika Pharma Inc. (TSX:ISA) today announced financial results for the second quarter ended June 30, 2012.
The Company's financial and administration resources in the second quarter ended June 30, 2012, were focused primarily on financing and licensing activities. The Company's research and development efforts for the three and six months ended June 30, 2012 have been primarily focused on the required planning and pre-dosing activities, including securing drug supply, for the voclosporin Phase 3 clinical trial for kidney transplant and conducting research activities for the NICAM program. This level of research and development activity has been reduced to the extent possible to conserve the Company's financial resources until additional sources of funding can be obtained to advance these programs.
Financial Results
The Company reported a consolidated net loss of $2.3 million or $0.01 per common share for the three months ended June 30, 2012, as compared to consolidated net income of $4.7 million or $0.03 per common share for the same period in 2011. For the six months ended June 30, 2012, the consolidated net loss was $2.8 million or $0.02 per common share compared to a consolidated net income of $1.8 million or $0.01 per common share for the comparable period in 2011.
The net income for three months ended June 30, 2011 included an unrealized non-cash gain of $6.7 million on a derivative financial instrument resulting from the Development, Distribution and License Agreement ("DDLA") with ILJIN Life Science Co., Ltd. ("ILJIN"). There was no similar item for the same period in 2012. The Company terminated the DDLA with ILJIN on January 30, 2012. As a result of ILJIN submitting a request for arbitration to the International Chamber of Commerce ("ICC") Court of Arbitration, the Company is currently engaged in arbitration proceedings under the ICC Rules of Arbitration.
Revenue decreased to $90,000 for the second quarter of 2012, compared to $148,000 for the same period in 2011. The Company recorded revenue of $5.9 million for the six months ended June 30, 2012, as compared to $282,000 for the same period in 2011. The increase in revenue was primarily the result of recording license revenue of $4.4 million upon termination of the DDLA with ILJIN.
Research and development expenditures were decreased to $817,000 in the second quarter of 2012, compared to $1.1 million in the second quarter of 2011. The Company incurred net research and development expenditures of $1.6 million for the six months ended June 30, 2012, as compared to $1.9 million for the same period in 2011. The decrease reflects reduced activity due to the Company's current limited financial resources.
Corporate and administration increased to $991,000 for the second quarter of 2012, compared to $656,000 for the second quarter of 2011. The Company incurred corporate and administration expenditures of $2.0 million for the six months ended June 30, 2012, as compared with $1.4 million for the same period in fiscal 2011. Corporate and administration expenses increased primarily due to higher professional and consulting fees. The Company has incurred higher fees due to consulting services related to strategic alternatives and legal fees related to the termination of the DDLA with ILJIN and the resulting arbitral process.
Other expense (income) reflected a loss of $400,000 for the second quarter ended June 30, 2012 compared with income of $6.6 million for the same period in 2011. The 2011 comparative figure included the unrealized non-cash gain of $6.7 million on the ILJIN derivative financial instrument.
Other expense (income) reflected a loss of $4.6 million for the six months ended June 30, 2012 compared to income of $5.3 million for the same period in 2011. Other expense for the six months ended June 30, 2012 included a non-cash loss of $4.6 million on the ILJIN derivative financial instrument compared to a gain of $5.8 million on this instrument for the six months ended June 30, 2011.
The Company, as at June 30, 2012, had $1.4 million in cash and cash equivalents. The Company needs to raise additional cash and/or enter into a licensing/partnership arrangement in the immediate future.
For further discussion of the Company's financial results for the three and six month periods ended June 30, 2012, the unaudited interim condensed consolidated financial statements and the Management's Discussion and Analysis for the second quarter ended June 30, 2012 are accessible on the Company's website at www.isotechnika.com or at www.sedar.com.
We seek Safe Harbour.
| Isotechnika Pharma Inc. | ||||
| Interim Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) | ||||
| (in thousands of Canadian dollars, except per share amounts) | ||||
| Three months ended | Six months ended | |||
| June 30, | June 30, | June 30, | June 30, | |
| 2012 | 2011 | 2012 | 2011 | |
| $ | $ | $ | $ | |
| Revenue | ||||
| Licensing revenue | 48 | 101 | 4,498 | 171 |
| Research and development revenue | 27 | 28 | 55 | 76 |
| Contract services | 15 | 19 | 37 | 35 |
| Other | -- | -- | 1,300 | -- |
| 90 | 148 | 5,890 | 282 | |
| Expenses | ||||
| Research and development | 817 | 1,080 | 1,619 | 1,861 |
| Corporate and administration | 991 | 656 | 1,977 | 1,365 |
| Amortization of property and equipment | 147 | 180 | 295 | 362 |
| Amortization of intangible assets | 67 | 63 | 132 | 117 |
| Contract services | 11 | 15 | 30 | 28 |
| Other expense (income) | 400 | (6,569) | 4,634 | (5,281) |
| 2,433 | (4,575) | 8,687 | (1,548) | |
| Net income (loss) for the period | (2,343) | 4,723 | (2,797) | 1,830 |
| Comprehensive income (loss) for the period | (2,343) | 4,723 | (2,797) | 1,830 |
| Earnings (loss) per share | ||||
| Basic and diluted net income (loss) per common share | (0.01) | 0.03 | (0.02) | 0.01 |