Sophiris Bio Reports Third Quarter Financial Results and Recent Key Operational Highlights
SAN DIEGO, CA and VANCOUVER, BC, Nov. 12, 2012 /PRNewswire/ - Sophiris Bio Inc. (TSX:SHS) ("Sophiris"), a urology company developing a late-stage, highly targeted treatment for benign prostatic hyperplasia (BPH or enlarged prostate), today announced financial results and recent key operational highlights for the third quarter ended September 30, 2012.
Recent Key Operational Highlights
- The 12 month data from the Phase 2b study (TRIUMPH) of PRX302 has been accepted for publication by the Journal of Urology and is currently available online at: www.jurology.com/article/S0022-5347(12)05468-7/abstract.
- In the 12 month Phase 2b (TRIUMPH) study, patients receiving PRX302 for the treatment of BPH experienced a clinically significant improvement in the subjective symptom score (International Prostate Symptom Score, or IPSS) and the objective measure of mean peak urinary flow rate (Qmax) sustained over 12 months.
- The Company released data from its transrectal safety study demonstrating that PRX302 was well tolerated through three months following a transrectal injection. The results support the use of a transrectal ultrasound (TRUS) guided injection for the delivery of PRX302 directly into the prostate. This route of administration will be used in future clinical trials of PRX302 in patients with BPH.
- The Company announced the appointment of Randall E. Woods as Chief Executive Officer effective August 16, 2012. Mr. Woods brings almost 40 years of relevant industry experience to Sophiris, including past roles as CEO at NovaCardia Inc. (acquired by Merck & Co in 2007) and Corvas International (acquired by Dendreon in 2003).
Financial Results for the Quarter Ended September 30, 2012
The Company reported a net loss of $5.6 million ($0.03 per share) for the three months ended September 30, 2012, compared to a net loss of $3.0 million ($0.02 per share) for the three months ended September 30, 2011, representing an increase of $2.6 million. The increase in net loss was driven primarily from an increase in total operating expenses over the same period in 2011 as a result of our increased research and development activities of PRX302, principally our on-going transrectal study and clinical material manufacturing expenses.
Research and Development Costs
Research and development costs were $3.4 million for the three months ended September 30, 2012, versus $1.5 million for the three months ended September 30, 2011, an increase of $1.9 million. The increase in research and development expenses is primarily attributable to the PRX302 clinical program, specifically the ongoing transrectal study and clinical material manufacturing expenses.
General and Administrative Costs
General and administrative costs for the three months ended September 30, 2012, were $2.0 million, an increase of $0.9 million from the $1.1 million incurred during the three months ended September 30, 2011. The increase in general and administrative expenses is primarily related to an increase in market research costs and to a lesser extent an increase in personnel related costs associated with the build-out of our San Diego headquarters.
Interest Income
Interest income increased approximately $25,000 in the three months ended September 30, 2012, compared to the three months ended September 30, 2011. The increase in interest income was due to an increase in the average cash balance invested in interest bearing accounts during the three months ended September 30, 2012 compared to the prior period.
Interest Expense
Interest expense for the three months ended September 30, 2012, was $0.5 million, an increase of $0.1 million from the $0.4 million incurred during the three months ended September 30, 2011. The interest expense recorded by the Company is related to the Company's secured promissory note with Oxford Financial LLC. The secured promissory note was originated during July 2011 and therefore the increase in the interest expense from the three months ended September 30, 2011 to September 30, 2012 is the result of the promissory note being outstanding for the entire three months during 2012.
Financial Results for the Nine Months Ended September 30, 2012
The Company reported a net loss of $15.8 million ($0.10 per share) for the nine months ended September 30, 2012, compared to a net loss of $8.5 million ($0.07 per share) for the nine months ended September 30, 2011, representing an increase of $7.3 million. The increase in net loss was driven primarily from an increase in total operating expenses of $6.4 million over the same period in 2011, as a result of our increased research and development activities of PRX302, principally our on-going transrectal study and clinical material manufacturing expenses.
Research and Development Costs
Research and development costs were $10.2 million for the nine months ended September 30, 2012, versus $4.5 million for the nine months ended September 30, 2011, an increase of $5.7 million. The increase in research and development expenses is primarily attributable to the PRX302 clinical program, specifically the on-going transrectal study and clinical material manufacturing expenses.
General and Administrative Costs
General and administrative costs for the nine months ended September 30, 2012, were $4.3 million, an increase of $0.7 million from the $3.6 million incurred during the nine months ended September 30, 2011. For the nine months ended September 30, 2011, included as a component of our general and administrative expenses is $0.7 million of severance related costs associated with the shut-down of our Vancouver operations. When the severance related costs are excluded from our operating results for the nine months ended September 30, 2011, our general and administrative expenses increased $1.4 million for the nine months ended September 30, 2012 compared to the same period in 2011. This increase primarily relates to an increase in personnel related costs associated with the build-out of our San Diego headquarters, market research costs and costs associated with our recent name change.
Interest Income
Interest income increased approximately $43,000 in the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011. The increase in interest income was due to an increase in the average cash balance invested in interest bearing accounts during the nine months ended September 30, 2012 compared to the prior period.
Interest Expense
Interest expense for the nine months ended September 30, 2012, was $1.5 million, an increase of $1.1 million from the $0.4 million incurred during the nine months ended September 30, 2011. The interest expense recorded by the Company relates to the Company's secured promissory note with Oxford Financial LLC. The secured promissory note was originated during July 2011 and therefore the increase in the interest expense from the nine months ended September 30, 2011 to September 30, 2012 is the result of the promissory note being outstanding for the entire nine months during 2012.
For complete financial results, please see our filings at www.sedar.com.
About Sophiris
Sophiris Bio Inc. is a urology company developing a late-stage, highly targeted treatment for benign prostatic hyperplasia (BPH or enlarged prostate), an unsatisfied market with significant demand. PRX302, the company's lead candidate for BPH, is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments. Sophiris is planning to begin a pivotal trial in the first half of 2013. Sophiris is advised by world-leading urologists, backed by experienced investors, and led by a team that has achieved more than twenty drug approvals. For more information, please visit www.sophirisbio.com.
Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Sophiris' current beliefs as well as assumptions made by and information currently available to Sophiris and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Sophiris in its public securities filings; actual events may differ materially from current expectations. Sophiris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Sophiris Bio Inc.
Condensed Consolidated Statement of Operations, Comprehensive Loss and Deficit
(Stated in United States Dollars - Unaudited)
| For the three months ended | For the nine months ended | |||||||
| September 30, | September 30, | |||||||
| 2012 | 2011 | 2012 | 2011 | |||||
| $ | $ | $ | $ | |||||
| Expenses | ||||||||
| Research and development | 3,411,012 | 1,543,618 | 10,193,869 | 4,540,579 | ||||
| General and administrative | 1,980,287 | 1,100,777 | 4,341,993 | 3,591,313 | ||||
| 5,391,299 | 2,644,395 | 14,535,862 | 8,131,892 | |||||
| Other income (expense) | ||||||||
| Interest income | 44,615 | 20,238 | 93,277 | 50,031 | ||||
| Interest expense | (482,218) | (421,857) | (1,519,996) | (421,857) | ||||
| Loss on disposal of assets | - | (11,648) | - | (11,648) | ||||
| Foreign exchange gain (loss) | 206,131 | 83,386 | 122,322 | (6,868) | ||||
| (231,472) | (329,881) | (1,304,397) | (390,342) | |||||
| Net loss for the period | (5,622,771) | (2,974,276) | (15,840,259) | (8,522,234) | ||||
| Other comprehensive income | ||||||||
| Currency translation differences | 211,203 | (507,591) | 107,849 | (203,195) | ||||
| Total comprehensive loss for the period | (5,411,568) | (3,481,867) | (15,732,410) | (8,725,429) | ||||
| Deficit - Beginning of the period | (62,730,841) | (43,850,654) | (52,513,353) | (38,302,696) | ||||
| Deficit - End of the period | (68,353,612) | (46,824,930) | (68,353,612) | (46,824,930) | ||||
| Basic and diluted loss per share | (0.03) | (0.02) | (0.10) | (0.07) | ||||
| Weighted average number of outstanding shares- | ||||||||
| Basic and diluted | 163,793,203 | 122,126,537 | 157,102,206 | 121,660,360 | ||||
Sophiris Bio Inc.
Condensed Consolidated Statement of Financial Position
(Stated in United States Dollars - Unaudited)
| Restated | ||||
| September 30, | December 31, | |||
| 2012 | 2011 | |||
| $ | $ | |||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | 15,226,029 | 23,410,478 | ||
| Other receivables | 113,667 | 238,906 | ||
| Prepaid expenses | 194,484 | 284,770 | ||
| 15,534,180 | 23,934,154 | |||
| Non-current assets | ||||
| Property and equipment | 184,583 | 219,740 | ||
| Intangible assets | - | 316,099 | ||
| Other long term assets | 44,459 | 29,495 | ||
| Total assets | 15,763,222 | 24,499,488 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | 2,638,673 | 3,101,548 | ||
| Current portion of secured promissory notes | 5,756,757 | 14,456,768 | ||
| 8,395,430 | 17,558,316 | |||
| Long-term secured promissory notes | 7,385,751 | - | ||
| Shareholders' equity | ||||
| Common shares | 54,490,667 | 48,073,120 | ||
| Common share purchase warrants | 7,794,477 | 5,926,762 | ||
| Contributed Surplus | 6,120,004 | 5,631,987 | ||
| Currency translation differences | (69,495) | (177,344) | ||
| Deficit | (68,353,612) | (52,513,353) | ||
| Total shareholders' (deficit) equity | (17,959) | 6,941,172 | ||
| Total liabilities and shareholders' equity | 15,763,222 | 24,499,488 | ||
Sophiris Bio Inc.
Condensed Consolidated Statement of Cash Flows
(Stated in United States Dollars - Unaudited)
| For the nine months ended September 30, | ||||
| 2012 | 2011 | |||
| $ | $ | |||
| Cash flows used in operating activities | ||||
| Net loss for the period | (15,840,259) | (8,522,234) | ||
| Items not affecting cash: | ||||
| Stock-based compensation | 488,017 | 719,993 | ||
| Accretion expense | 486,747 | 132,986 | ||
| Depreciation of property and equipment | 60,735 | 25,551 | ||
| Amortization of intangible assets | 149,222 | 152,897 | ||
| Impairment loss | 175,766 | - | ||
| Loss on disposal of assets | - | 11,648 | ||
| Unrealized foreign exchange (gain) | (109,071) | (38,955) | ||
| Interest expense | 1,033,250 | 186,042 | ||
| Interest income | (93,277) | (46,780) | ||
| Change in non-cash working capital: | ||||
| Other receivables | 142,221 | 95,784 | ||
| Prepaid expenses | 90,451 | (277,738) | ||
| Other long term assets | (14,643) | (573,381) | ||
| Accounts payable and accrued liabilities | (608,144) | 366,746 | ||
| Accrued interest | (14,258) | 118,750 | ||
| Net cash flows used in operating activities | (14,053,243) | (7,648,691) | ||
| Cash flows from (used in) investing activities | ||||
| Interest received | 82,440 | 46,780 | ||
| Purchase of property and equipment | (25,671) | (231,186) | ||
| Net cash flows from (used in) investing activities | 56,769 | (184,406) | ||
| Cash flows from financing activities | ||||
| Cash received on issuance of promissory notes (Note 8) | - | 14,645,048 | ||
| Issuance of common shares from private placement | ||||
| - net of issurance costs paid (Note 9(a)) | 8,285,262 | - | ||
| Issuance of common shares on exercise of warrants | - | 77,895 | ||
| Issuance of common shares on exercise of stock options | - | 302,481 | ||
| Principal payments on notes payable | (1,801,008) | - | ||
| Interest paid | (1,047,507) | (186,042) | ||
| Net cash flows from financing activities | 5,436,747 | 14,839,382 | ||
| Effect of exchange rate changes on cash | ||||
| and cash equivalents | 375,278 | (115,340) | ||
| Net increase (decrease) in cash and cash equivalents | (8,184,449) | 6,890,945 | ||
| Cash and cash equivalents - Beginning of the period | 23,410,478 | 12,381,237 | ||
| Cash and cash equivalents - End of the period | 15,226,029 | 19,272,182 | ||
SOURCE Sophiris Bio, Inc.
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