Transition Therapeutics Announces Second Quarter Fiscal 2013 Financial Results

TORONTO, Feb. 7, 2013 /PRNewswire/ - Transition Therapeutics Inc. ("Transition" or the "Company") (TSX: TTH; NASDAQ: TTHI), a product-focused biopharmaceutical company developing therapeutics for disease indications with large markets, today announced its financial results for the three and six month periods ended December 31, 2012.

Selected Highlights

During fiscal 2013 and up to the date of this press release, the Company announced the following:

  • On November 28, 2012, Transition announced that their licensing partner Elan had enrolled the first patient in a Phase II study of ELND005 for the treatment of agitation/aggression in patients with moderate to severe Alzheimer's disease;

  • On August 30, 2012, Transition announced that their licensing partner Elan had dosed the first patient in a Phase II clinical study of ELND005 in Bipolar Disorder. The study is a placebo-controlled, safety and efficacy study of oral ELND005 as an adjunctive maintenance treatment in patients with Bipolar 1 Disorder to delay the time to occurrence of mood episodes. As the first patient has been dosed in the study, Transition received a milestone payment of US$11 million from Elan.

Financial Liquidity

The Company's cash and cash equivalents and short term investments were $24,958,522 at December 31, 2012.

The Company's current cash projection indicates that the current cash resources should enable the Company to execute its core business plan and meet its projected cash requirements well beyond the next 12 months.

Financial Review

For the three month period ended December 31, 2012, the Company recorded a net loss of $2,754,534 ($0.10 loss per common share) compared to net loss of $3,790,421 ($0.15 loss per common share) for the three month period ended December 31, 2011.

For the six month period ended December 31, 2012, the Company recorded a net income of $4,981,512 ($0.19 income per common share) compared to a net loss of $6,661,178 ($0.28 loss per common share) for the six-month period ended December 31, 2011.

Revenue is nil and $10,815,200 in the three and six month periods ended December 31, 2012 respectively, compared to nil in both three and six month period ended December 31, 2011.

In August 2012, Elan dosed the first patient in a Phase 2 clinical study of ELND005 in Bipolar Disorder.  In light of the amendments to the Elan agreement, the Company has recognized $10,815,200 (US$11,000,000) as revenue during the first quarter of fiscal 2013 which represents the milestone payment received from Elan upon their commencement of the next ELND005 clinical trial. The payment from Elan was received on October 1, 2012.

Research and development expenses increased $80,635 or 4% from $2,060,622 for the three month period ended December 31, 2011 to $2,141,257 for the three month period ended December 31, 2012. The increase is largely due to an increase in clinical development costs related to TT-401/402, which has been offset by decreases in clinical development costs related to TT-301/302 and salaries and related costs associated with headcount reductions.

For the six month period ended December 31, 2012, research and development expenses decreased $118,543 or 3% to $4,195,803 from $4,314,346 for the same period in fiscal 2012. The decrease is primarily due to decreases in clinical development costs related to TT-301/302 and salaries and related costs associated with headcount reductions. The decrease is largely offset by increased clinical development costs related to TT-401/402.

General and administrative expenses decreased by $683,472 or 45% from $1,532,912 for the three month period ended December 31, 2011 to $849,440 for the three month period ended December 31, 2012.  For the six month period ended December 31, 2012, general and administrative expenses decreased $956,616 or 36% to $1,666,342 from $2,622,958 for the same period in fiscal 2012.

The decreases in general and administrative expenses for both the three and six month periods ended December 31, 2012 are due to decreases in legal consulting fees, facility lease costs, and investor relation and business development expenses, as well as decreased salaries and related costs resulting from headcount reductions as the comparative periods included severances relating to terminations.

About Transition

Transition is a biopharmaceutical company, developing novel therapeutics for disease indications with large markets. Transition's lead product is ELND005 for the treatment of Alzheimer's disease and bipolar disorder.  Transition also has an emerging pipeline of innovative preclinical and clinical drug candidates. The other drugs in the pipeline that the Company is developing are for anti-inflammatory and metabolic indications. Transition's shares are listed on the NASDAQ under the symbol "TTHI" and the Toronto Stock Exchange under the symbol "TTH". For additional information about the Company, please visit www.transitiontherapeutics.com.

Extracts of the Financial Statements to Follow:

CONSOLIDATED BALANCE SHEETS
(Unaudited)
As at

In Canadian Dollars December 31, 2012   June 30, 2012  
         
Assets        
Current assets        
Cash and cash equivalents 18,955,854   12,955,081  
Short term investments 6,002,668   6,057,264  
Trade and other receivables 48,408   43,658  
Investment tax credits receivable 370,289   241,951  
Prepaid expenses and deposits 458,037   316,286  
         
  25,835,256   19,614,240  
Non-current assets        
Property and equipment 194,181   215,000  
Intangible assets 16,374,143   17,263,790  
Total assets 42,403,580   37,093,030  
         
Liabilities        
Current liabilities        
Trade and other payables  896,145   1,178,915  
Current portion of contingent consideration payable 2,321,373   2,321,373  
  3,217,518   3,500,288  
         
Non-current liabilities        
Contingent consideration payable 1,434,958   1,434,958  
Leasehold inducement 28,579   34,295  
  4,681,055   4,969,541  
         
Equity attributable to owners of the Company        
Share capital 165,334,259   165,334,259  
Contributed surplus 13,431,445   13,168,411  
Share-based payment reserve 3,331,522   2,977,032  
Deficit (144,374,701)   (149,356,213)  
  37,722,525   32,123,489  
         
Total liabilities and equity 42,403,580   37,093,030  

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
For the six and three month periods ended December 31, 2012 and 2011
(Unaudited)

In Canadian Dollars   Six month
period ended
December 31,
2012
  Six month
period ended
December 31,
2011
  Three month
period ended
December 31,
2012
  Three month
period ended
December 31,
2011
                 
Revenues                
Licensing fees   10,815,200   -   -   -
Expenses                
Research and development   4,195,803   4,314,346   2,141,257   2,060,622
Selling, general and administrative expenses   1,666,342   2,622,958   849,440   1,532,912
Loss on disposal of property and equipment   -   118,623   -   38,709
                 
Operating income (loss)   4,953,055   (7,055,927)   (2,990,697)   (3,632,243)
                 
Interest income   68,489   80,339   34,872   40,412
Interest expense   -   (851)   -   (241)
Foreign exchange gain (loss)   (40,032)   315,261   201,291   (198,349)
Net income (loss) and
comprehensive income (loss) for the
period
  4,981,512   (6,661,178)   (2,754,534)   (3,790,421)
Basic and diluted net income (loss)
per common share
  0.19   (0.28)   (0.10)   (0.15)

Notice to Readers: Information contained in our press releases should be considered accurate only as of the date of the release and may be superseded by more recent information we have disclosed in later press releases, filings with the OSC, SEC or otherwise. Except for historical information, this press release may contain forward-looking statements, relating to expectations, plans or prospects for Transition, including conducting clinical trials. These statements are based upon the current expectations and beliefs of Transition's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include factors beyond Transition's control and the risk factors and other cautionary statements discussed in Transition's quarterly and annual filings with the Canadian commissions. 

SOURCE Transition Therapeutics Inc.




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