TORONTO, April 12 /CNW/ - ARIUS Research Inc., ("ARIUS" or the "Company") (TSX: ARI), a biotechnology company discovering and developing the next wave of antibody therapeutics, today announced its financial and operational results for the first quarter, ended February 28, 2007.
"Our primary focus for 2007 will be to advance ARIUS-originated antibodies towards clinical development," said Dr. David Young, President and CEO. "During the quarter, we focused on moving our three lead antibody programs into pre-IND enabling studies in preparation for toxicology studies later in 2007 and human clinical trials planned for 2008. We also continued to support our numerous research partnerships, delivering novel antibody candidates to Takeda during the quarter and receiving a positive progress report from Genentech."
During the first quarter ended February 28, 2007, ARIUS achieved the following:
- Genentech, Inc. reported positive progress on the CD63 antibody program ARIUS licensed to Genentech in March 2006, including conducting preclinical studies in a variety of cancer indications in order to move the lead antibody towards the clinic; - Demonstrated significant positive results in animal models for the CD44 antibody in liver cancer, a new indication for this anti-cancer stem cell targeted antibody program; - Successfully developed and delivered novel antibodies to Takeda Pharmaceutical Company Limited for evaluation under the research agreement with Takeda; and - Received notice from the United States Patent and Trademark Office of two patent grants for antibodies within the CD63 program.
CD44 Program:
The Company engaged a manufacturer to begin process development and manufacturing for its lead anti-CD44 monoclonal antibody under Current Good Manufacturing Practices (cGMP). The Company expects to perform pre-clinical toxicology studies in the second half of calendar 2007 in preparation for filing a Phase I Investigational New Drug (IND) application in the first half of 2008.
CD59 Program:
The Company selected an antibody to this target for preclinical development based on potent tumor growth inhibition in several cancer types. The Company has engaged Antitope Inc. to humanize the molecule and develop expression cell lines, and expects to initiate process development and manufacturing under cGMP in 2007. The Company expects to perform pre-clinical toxicology studies in 2008 in preparation for filing a Phase I IND application.
Trop-2 Program:
The Company selected an antibody to this target for preclinical development based on efficacy in a human pancreatic cancer model. The Company has engaged Antitope Inc. to humanize the molecule and develop expression cell lines, and expects to initiate process development and manufacturing under cGMP in 2007. The Company expects to perform pre-clinical toxicology studies in 2008 in preparation for filing a Phase I IND application in the second half of 2008.
Additional Programs:
Currently, ARIUS has antibody programs targeting the MCSP antigen, CD63, and 37LRP in addition to several other undisclosed programs.
Financial Results:
All amounts are in Canadian dollars unless otherwise indicated.
For the three-month period ended February 28, 2007, ARIUS recorded a net loss of $2.3 million or $0.05 per share, compared to a net loss of $921,904 or $0.09 per share for the three-month period ended February 28, 2006. The increase in net loss is primarily attributable to higher research and development and general administrative costs as the Company pursues development of its lead compounds.
Interest income amounted to $199,923 for the three-month period ended February 28, 2007, compared with $328 for the same period in fiscal 2006. The increase primarily resulted from higher average cash balances.
Research and development expenditures amounted to $2.0 million for the three-month period ended February 28, 2007, compared with $601,811 in the same period in fiscal 2006. The increase was primarily the result of increased product development activity and an increase in staffing levels.
General and administrative expenses amounted to $590,089 for the three-month period ended February 28, 2007, compared with $176,365 for the same period in fiscal 2006. The increase was primarily the result of increased consulting, legal and stock option remuneration costs as well as an expansion of facilities and head count.
As at February 28, 2007, the Company's cash and cash equivalents were $4,824,896, short-term investments were $13,800,231, and the net working capital position was $18,270,310 compared to $4,077,065, $16,135,490 and $20,263,807, respectively as at November 30, 2006. The Company believes that it has adequate financial resources for anticipated expenditures through the end of the 2008 fiscal year and beyond.
As at April 9, 2007, the Company had 44,750,964 Common Shares outstanding, 37,075,334 Warrants and 3,610,705 Stock Options.
Notice of Annual General Meeting:
ARIUS will hold its Annual General Meeting of shareholders at the TSX Conference Centre Gallery, 130 King Street West, Toronto, Ontario, on April 17, 2007 at 10:00 a.m. EST.
About ARIUS
ARIUS is a biotechnology company discovering and developing the next wave of antibody therapeutics. Established in 1999, ARIUS has built a proprietary technology platform, FunctionFIRST(TM), that rapidly identifies and selects antibodies based on their functional ability to affect disease. This antibody generation engine has enabled ARIUS to assemble a portfolio of more than 400 antibody candidates. In addition to the antibodies it is developing in-house, ARIUS has ongoing partnerships with key biotechnology and drug development companies. ARIUS is listed on the TSX under the symbol "ARI". For further information, visit www.ariusresearch.com.
Forward-Looking Statements
Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Forward-looking statements in this release include, but are not limited to, ARIUS successfully advancing its new product programs as well as licensing opportunities. These statements are only predictions and actual events or results may differ materially. Factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements include, but are not limited to: early stage of development; technology and product development; dependence on and management of current and future corporate collaborations; future capital needs; uncertainty of additional funding; no assurance of market acceptance; dependence on proprietary technology and uncertainty of patent protection; intense competition; manufacturing and market uncertainties; and government regulation. These and other factors are described in detail in ARIUS' Annual Report, forthcoming news releases and other filings with Canadian securities regulatory authorities available at www.sedar.com. Forward-looking statements are based on our current expectations and ARIUS is not obligated to update such information to reflect later events or developments.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this statement.
Summary Financial Statements attached below:
ARIUS RESEARCH INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Balance Sheets
(Unaudited)
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February 28, November 30,
2007 2006
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Assets
Current assets:
Cash and cash equivalents $ 4,824,896 $ 4,077,065
Short-term investments 13,800,231 16,135,490
Receivables 635,570 716,727
Refundable tax credits 510,219 400,000
Prepaid expenses 374,511 340,695
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20,145,427 21,669,977
Property and equipment, net 1,680,379 1,539,536
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$ 21,825,806 $ 23,209,513
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 1,356,597 $ 1,211,528
Current portion of capital lease obligation 24,398 29,630
Current portion of unearned revenue and
contract advances 494,122 165,012
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1,875,117 1,406,170
Leasehold inducements 307,889 318,261
Capital lease obligation 21,674 27,934
Unearned revenue and contract advances 2,523,180 2,263,091
Shareholders' equity:
Share capital:
Common shares 28,644,454 28,644,454
Warrants 9,603,644 9,603,644
Compensation warrants 912,377 912,377
Contributed surplus 1,720,760 1,510,176
Deficit (23,783,289) (21,476,594)
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17,097,946 19,194,057
Guarantees
Commitments
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$ 21,825,806 $ 23,209,513
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Interim Statements of Operations, Comprehensive Loss and Deficit
(Unaudited)
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Cumulative
Three-month Three-month since
period ended period ended inception
February 28, February 28, on August 11,
2007 2006 1999
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Revenue:
Product $ 35,094 $ - $ 35,094
Licensing fees - - 3,119,691
Research grant payments 73,360 16,034 273,663
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108,454 16,034 3,428,448
Expenses:
Research and development,
net of tax credits 1,957,328 601,811 18,749,563
General and administrative 590,089 176,365 8,276,611
Interest expense 875 160,090 902,398
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2,548,292 938,266 27,928,572
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Loss before the undernoted (2,439,838) (922,232) (24,500,124)
Interest income 199,923 328 1,565,758
Loss on extinguishment of debt - - (782,143)
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Loss before income taxes (2,239,915) (921,904) (23,716,509)
Income taxes:
Current (66,780) - (66,780)
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Loss and comprehensive loss
for the period (2,306,695) (921,904) (23,783,289)
Deficit, beginning of period (21,476,594) (15,032,405) -
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Deficit, end of period $(23,783,289) $(15,954,309) $(23,783,289)
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Loss per share - basic and
diluted $ (0.05) $ (0.09)
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Weighted average common
shares outstanding 44,750,964 10,640,206
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Interim Statements of Cash Flows
(Unaudited)
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Cumulative
Three-month Three-month since
period ended period ended inception
February 28, February 28, on August 11,
2007 2006 1999
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Cash provided by (used in):
Operating activities:
Loss for the period $ (2,306,695) $ (921,904) $(23,783,289)
Items not involving cash:
Amortization of:
Property and equipment 81,415 34,280 970,573
Deferred costs - - 55,055
Leasehold inducements (10,372) - (25,039)
Loss on disposal of equipment - - 23,532
Write-off of leasehold
improvements - - 86,349
Leasehold inducement - - 89,148
Non-cash stock-based
compensation 210,584 39,142 995,983
Accretion of convertible
debentures - 45,944 429,905
Loss on extinguishment of
debt - - 782,143
Services received for common
shares - - 400,024
Write-off of investment - - 20,000
Interest expense paid in
common shares - - 140,032
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(2,025,068) (802,538) (19,815,584)
Change in non-cash operating
working capital items 671,390 (854,788) 2,853,599
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(1,353,678) (1,657,326) (16,961,985)
Financing activities:
Issue of shares, warrants and
units, net of issuance costs - 985,377 38,281,778
Issuance of convertible bridge
loan, net - 2,253,600 2,196,619
Repayment of convertible
bridge loan, including costs - - (2,408,886)
Exercise of compensation
warrants - - 8,581
Draw of bank line of credit - - 655,000
Repayment of bank line of
credit - (85,000) (655,000)
Bridge loan - - 300,000
Repayment of bridge loan - (300,000) (300,000)
Repayment of capital lease and
equipment financing
obligations (11,492) (21,263) (272,293)
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(11,492) 2,832,714 37,805,799
Investing activities:
Purchase of short-term
investments (7,662,879) - (23,798,369)
Maturity of short-term
investments 9,998,138 - 9,998,138
Leasehold inducements - - 243,780
Long-term investment - - (20,000)
Acquisition of property and
equipment (222,258) - (2,451,453)
Disposal of equipment - - 8,986
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2,113,001 - (16,018,918)
Increase in cash & cash
equivalents 747,831 1,175,388 4,824,896
Cash & cash equivalents,
beginning of period 4,077,065 152,967 -
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Cash & cash equivalents,
end of period $ 4,824,896 $ 1,328,355 $ 4,824,896
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%SEDAR: 00013708E