Trading Symbol: AAF:TSX Venture Exchange
EDMONTON, June 1 /CNW/ - Altachem Pharma Ltd. (the "Company") announces a
summary of its financial results and highlights for the fiscal year ended
January 31, 2005.
Highlights of fiscal 2005 and subsequent events
- Announced a major change in strategic direction for the Company,
involving a concentration of resources on developing the Company's
anticancer photodynamic therapies.
- Appointed Dr. David Cox, a biotechnology industry veteran as
President & CEO.
- Raised approximately $3.5 million from a combination of equity,
debenture, debt financing and government support programs.
- Sold the medical diagnostic breath kit business and assets to
Isodiagnostika Inc.
- Completed animal toxicology evaluation of the lead photodynamic
therapy compound.
- Received approval for the sale of Bionex Hard Surface Disinfectant in
China.
- Settled several on-going disputes with various insiders,
collaborators and shareholder groups.
"I am very satisfied with the Company's progress as it enters fiscal
2006" remarked Dr. David Cox, President & CEO. "We have been able to
re-position the Company as a focussed development company in the cancer space
and also have managed to stabilize Altachem financially and corporately. Based
on current operating budgets and assuming that we are able to repatriate and
liquidate assets from Altachem's Chinese subsidiaries, we believe that the
capital resources of the Company should be sufficient to fund operations for
the next 12 months."
Financial Results
Net consolidated loss for the year ended January 31, 2005 was $4,381,953
or $0.12 per share as compared to a consolidated loss of $4,965,689 or
$0.15 per share for the year ended January 31, 2004.
Research and development expenditures totalled $1,891,532 for the year
compared to $1,194,714 for the prior year. The increase relates to the
Company's increased focus on drug development. General and administrative
expenses were $1,902,391 for the year compared to $1,991,296 for the prior
year. General and administrative expenses for 2005 included legal costs of
$372,536 (2004: $51,672). Legal costs were high for the year owing to
extraordinary expenses associated with the settlement of various disputes and
the Special Meeting of Shareholders. The Company does not anticipate that
costs of this nature will be recurring.
The Company generated revenue from three sources: contract manufacturing
of diagnostic test kits, sales of Accu-MAb(TM) a whooping cough diagnostic
test kit, and sales of pharmaceutical pellet core. On July 30, 2004 the
Company sold its assets relating to the contract manufacturing operations in
Edmonton, Alberta for proceeds of $460,000. Contract manufacturing revenue was
$221,556 for the year compared to $374,306 for the prior year. Pelletcore
sales were $71,737 compared to $60,298 for 2004. Sales of Accu-MAb(TM) were
$141,092 for the year compared to $127,045 for the prior year. The Company is
looking to further expand sales of Accu-MAb(TM) in Canada, the United States
and to other countries.
At January 31, 2005, cash and cash equivalents was $1,931,293 as compared
to $3,520,069 at January 31, 2004. Although the majority of Company's cash
balance at year end is held by its Chinese subsidiary Shanghai Altachem Pharma
Biotechnology Ltd. ("SACP"), the Company is taking steps to collapse SACP and
repatriate SACP's assets back to Canada. This process is expected to be
completed during the 3rd quarter of calendar 2005.
During the year, the Company obtained bridge financing totaling $934,000.
These were in the form of interest and non-interest bearing loans from
directors, former directors and companies controlled by former directors. At
year end, $932,683 was outstanding. Subsequent to year end, the Company repaid
$307,452 of the bridge financing. The Company intends to repay the remainder
of these obligations by June 30, 2005.
Subsequent to the year end (March 23, 2005) the Company raised $1,000,000
through a private placement issue of 8% secured convertible debentures with a
one year maturity to two arm's length parties. The Debentures may be converted
into common shares of the Company. Also, on May 17, 2005, the Company
completed a private placement of units for gross proceeds of $1,493,000 (net
proceeds of approximately $1,432,000, subsequently approved by the TSX Venture
Exchange). Each unit is comprised of one common share and one-half share
purchase warrant. The proceeds from these private placements will be for
general corporate purposes and for working capital.
The Company may seek additional capital through sale of non-core assets,
further equity financings, licensing arrangements, strategic partnerships
and/or financings from directors.
Risks and Uncertainties
Certain of the statements contained in this press release are forward-
looking statements which involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of Altachem Pharma Ltd or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements.
To the extent possible, management implements strategies to reduce or
mitigate the risks and uncertainties associated with the Company's operations.
Operating risks include (i) the continued availability of capital to finance
the Company's activities; (ii) the Company's limited cash position, (iii) the
ability to successfully obtain proof of the effectiveness of the Company's
technology; (iv) the ability to complete and maintain corporate alliances
relating to the development and commercialization of the Company's technology;
(v) the ability to obtain and enforce patent and other intellectual property
protection for the Company's technology; (vi) market acceptance of the
Company's technology; (vii) the competitive environment and impact of
technological change and (viii) the Company's ability to attract and retain
employees to carry out its business plans. Further details on Altachem's
operating risks can be found in the Company's Quarterly and Annual Management,
Discussion & Analysis reports, available on SEDAR.
About Altachem Pharma Ltd
The Corporation is a publicly traded (TSX Venture Exchange: AAF),
Alberta-based pharmaceutical company committed to the development and
commercialization of new pharmaceutical products. It is developing a series of
products for the treatment of cancer and other proliferative diseases based on
its SonoLight and CDK platforms. It also has a profitable product in
Accu-MAb(TM), a monoclonal-based diagnostic kit for whooping cough.
TSX Venture Exchange has neither approved nor disapproved
of the information contained herein.
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