(Canadian dollars, except where noted)
MONTREAL, Feb. 12, 2016 /PRNewswire/ - Telesta Therapeutics Inc. (TSX:TST; PNK:BNHLF) today issued its second quarter consolidated financial statements and associated Management's Discussion and Analysis (MD&A) for the fiscal quarter ended December 31, 2015, which are now published in full on SEDAR (www.sedar.com) and on the Company's website at www.telestatherapeutics.com.
Telesta Therapeutics announced net income for the 6-month period ending December 31, 2015 of $8.2 million compared to a loss of $8.2 million for the comparable period last year. This profit was primarily due to the recognition of $13.1 ($US10 million) of licensing revenue in this quarter and a non-cash gain of $3.6 million resulting from a reduction of management's estimate of the value of conditionally repayable government assistance. Following the receipt of a Complete Response Letter from the U.S. FDA to Telesta's Biologics License Application (BLA) for MCNA, management has revised its assumptions for the calculation of this potential future liability. As Telesta continues to work to clarify the future regulatory pathway for MCNA, these assumptions will be further reviewed.
Total R&D expenditures for the 6-month period were $6.3 million, compared to $3.2 million. This increase is primarily related to non-recurring consulting fees related to the BLA ($2.2 million for the 6 months ending December 31, 2015 compared to $0.6 million for the same period the previous year), increased compensation expenses related to new production and quality control staff, decreased government assistance and increased external service contracts expense. General and Administrative expenses for the 6-month period ending December 31, 2015 was $3.6 million compared to $2.8 million for the same period last year.
Total debt and repayable government assistance as at December 31, 2015 was $3.2 million ($4.3 million as at June 30, 2015) while total debt and repayable government assistance related to discontinued operations was $8.6 million compared to $9.7 million as at June 30, 2015. Conditionally repayable government assistance (amounts only repayable in the form of a capped royalty to be paid in the event of the successful commercialisation of MCNA) stood at $6.5 million on December 31, 2015 compared to $9.7 million as of June 30, 2015. This reduction is principally related to a change in management's estimates of the forecasted timing of future sales of MCNA.
The Company's cash and marketable securities position was $49.8 million at December 31, 2015 compared to $4.2 million at June 30, 2015.
Dr. Michael Berendt, Telesta's Chief Executive Officer and Chief Scientist noted: "Under other circumstances, I would be very pleased to release our second quarter financial statements demonstrating both a profitable quarter and a very healthy balance sheet. However this quarter's results are completely over-shadowed by the receipt of a Complete Response Letter from the FDA that we reported last week.
While I understand the frustration of our shareholders who want to know exactly what our path forward is for MCNA, I must ask them to be patient as we methodically review the situation. We have begun meeting with our advisors, consultants and partners and are preparing a written submission requesting a Type A meeting with the FDA, where we will be able to ask specific questions concerning the future regulatory pathway for MCNA. It is critical that we clearly understand what will now be required by the FDA to consider approval for MCNA in the United States. In parallel, we are working with our development partners to seek regulatory clarity in key jurisdictions outside the U.S. particularly as it relates to the path to approval in Europe. At the end of this exercise, which I caution will take several months, we will be in a position to evaluate with our board the different strategic options available to us which will ensure that we can deliver on our primary mission of creating value for our shareholders. As communicated last week, we will organize a shareholders update teleconference as soon as we have substantial news to report."
About Telesta Therapeutics Inc.
Telesta Therapeutics Inc. is a public biotechnology company focused on developing and commercializing human therapeutics for the U.S. market that advance human health and increase shareholder value. For more information, please visit www.telestatherapeutics.com.
Except for historical information, this news release may contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws that reflect the Company's current expectation regarding future events. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while, considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements and information. These forward-looking statements and information involve risk and uncertainties, which may cause, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process, and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.
SOURCE Telesta Therapeutics Inc.