TORONTO, April 11 /CNW/ - ARIUS Research Inc., (TSX: ARI), a biotechnology company discovering and developing the next wave of antibody therapeutics, today announced its financial and operational results for the first fiscal quarter of 2008, ended February 29, 2008.
"During the quarter, we continued to focus on advancing our antibody drugs efficiently and rapidly towards human clinical trials. Most significantly, we completed our pre-IND meeting with the US FDA for our lead CD44 Cancer Stem Program," said Dr. David Young, President and CEO of ARIUS. "We also presented new findings from our lead programs, including data from our CD9 Cancer Stem Cell program in collaboration with Dr. John Dick, a pioneer in the cancer stem cell field. Maintaining this momentum, five ARIUS abstracts have been selected for presentation in the upcoming AACR Annual meeting this month, demonstrating the scientific community's ongoing interest in our programs and the high quality of our research."
Program Updates:
CD44 Cancer Stem Cell Program
- Selected to present two CD44-focused posters at AACR the American
Association for Cancer Research (AACR) Annual Meeting held from
April 12-16, 2008 in San Diego, California.
- Held meeting with FDA to discuss plans for the upcoming
IND submission.
- Prepared to file a Phase I IND application and begin human
clinical trials for the CD44 Cancer Stem Cell program in 2008.
Trop-2 Signal Transduction Program
- Completed first toxicology studies.
- Selected to present a Trop-2-focused poster at AACR Annual
Meeting.
- Engaged Laureate Pharma Inc. for cGMP manufacturing of humanized
antibody for Phase 1 clinical supply. A cell line producing the
humanized anti-Trop-2 antibody was successfully transferred to
Laureate.
- Preparing for a pre-IND meeting with the FDA planned for the third
quarter of 2008, and the filing of a Phase I IND application
anticipated in late 2008.
CD59 Complement Inhibitor Program
- Selected to present a CD59-focused poster at AACR Annual Meeting.
- Generated a cell line producing humanized CD59 antibody that
successfully retained binding characteristics and potent in vivo
activity.
- Preparing to perform preclinical toxicology studies planned for
2008 in preparation for filing a Phase I IND application.
CD9 Cancer Stem Cell Program
- Selected to present a CD9-focused poster at AACR Annual Meeting.
- Presented positive findings demonstrating the ability of the lead
anti-CD9 antibody to kill cancer stem cells in an in vivo model
using cells from human leukemia patients at the American
Association of Cancer Research Special Conference on Cancer Stem
Cells.
CD63 Antibody Program
- Licensed to Genentech, Inc. in March 2006, the CD63 program
continues to advance in preclinical studies in a variety of cancer
indications as part of a program to move the lead antibody towards
the clinic.
Takeda Collaboration
- Discovered and delivered novel antibodies to Takeda. Under the
terms of the research collaboration agreement, ARIUS has
successfully met its obligations to date and has received all
scheduled research payments from Takeda.
Additional Product Updates
- Currently, ARIUS has antibody programs targeting the MCSP antigen
and 37LRP, in addition to several other undisclosed programs.
- ARIUS currently has 23 issued or allowed patents covering its
antibody programs and discovery platform and over 228 patents
pending worldwide.
Corporate Updates:
- Appointed Mr. James Rae to the Board of Directors. Mr. Rae brings
to ARIUS more than 30 years of experience in manufacturing,
marketing, finance and research & development for pharmaceutical
and biotechnology firms and is currently the President and CEO of
Viron Therapeutics.
- Promoted Susan Hahn, PhD to the position of Vice President of
Development.
- Subsequent to quarter-end, at ARIUS' annual meeting, William
Bodenhamer, retired from ARIUS' Board of Directors.
Mr. Bodenhamer, has been a valued member of ARIUS' Board since
1999, and we would like to thank him for his commitment and the
wise counsel he has provided us with over the years. Replacing
Mr. Bodenhamer, we have appointed Graham Strachan to the Board of
Directors. Mr. Strachan will be a valuable addition to ARIUS as he
has been involved in the Canadian biotechnology sector for twenty
five years. He is the former President and CEO of Allelix
Biopharmaceuticals Inc., has been a founder of several life
science companies and also serves as a Director on several boards
of publicly-listed companies.
- Continued to discuss potential partnering opportunities with
various parties.
Financial Results:
All amounts are in Canadian dollars unless otherwise indicated.
For the three-month period ended February 29, 2008, the Company recorded a net loss of $2,584,081 ($0.06 per share) compared to a net loss of $2,306,695 ($0.05 per share) for the three-month period ended February 28, 2007. The increase in net loss was primarily the result of higher research and development, general administrative and foreign exchange expenses, partially offset by higher revenues.
For the three-month period ended February 29, 2008, the Company's revenue increased to $1,047,294 compared with $108,454 for the same period in fiscal 2007. The increase was primarily the result of the recognition of product and research contract revenue from the Takeda collaboration.
Interest income decreased to $106,792 for the three-month period ended February 29, 2008, compared with $199,923 for the same period in fiscal 2007. The decrease was primarily the result of lower average cash and investment balances.
Research and development costs increased to $2,595,906 for the three-month period ended February 29, 2008, compared to $1,957,328 for the same period in fiscal 2007. The increase was primarily the result of an increase in staffing levels related to an overall increase in activity as the Company is preparing three products for the clinic, accompanied by increased patent and licensing activity.
General and administrative expenses increased to $1,021,281 for the three-month period ended February 29, 2008, compared to $674,336 for the same period in fiscal 2007. The increase was primarily the result of an increase in staffing levels, consulting fees and legal expenses.
As at February 29, 2008, ARIUS' cash and cash equivalents, short-term investments and net working capital position were $9,760,273, $1,299,844 and $8,245,154, respectively, compared with November 30, 2007 balances of $5,635,365, $6,825,190 and $9,088,712, respectively. The Company currently believes that it has adequate financial resources to continue into the fourth quarter of fiscal 2008 based on planned research and development expenditures and operating costs.
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 500 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.ariusmabs.com
Financial Information to Follow:
ARIUS RESEARCH INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM BALANCE SHEETS
(Unaudited)
-------------------------------------------------------------------------
February 29, November 30,
2008 2007
$ $
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Assets
Current assets:
Cash and cash equivalents 9,760,273 5,635,365
Short-term investments 1,299,844 6,825,190
Receivables 197,542 230,126
Refundable tax credits 549,139 400,000
Prepaid expenses 341,826 387,674
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12,148,624 13,478,355
Facilities and equipment, net 1,807,824 1,889,921
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13,956,448 15,368,276
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-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities 1,796,442 2,034,972
Accrued loss on embedded foreign exchange
derivative 317,176 296,064
Current portion of leasehold inducements 41,484 41,484
Current portion of capital lease obligation 21,674 25,710
Current portion of deferred revenue 1,726,694 1,991,413
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3,903,470 4,389,643
Leasehold inducements 224,920 235,291
Capital lease obligation - 2,224
Deferred revenue 1,527,304 1,758,898
Shareholders' equity:
Share capital:
Common shares 30,484,195 28,644,454
Warrants 10,432,417 9,603,644
Compensation warrants - 912,377
Contributed surplus 2,501,856 2,355,378
Deficit (35,117,714) (32,533,633)
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8,300,754 8,982,220
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13,956,448 15,368,276
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ARIUS RESEARCH INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT
(Unaudited)
-------------------------------------------------------------------------
Cumulative
Three-month Three-month since
period ended period ended inception
February 29, February 28, on August 11,
2008 2007 1999
$ $ $
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Revenue:
Research contract 986,862 - 1,733,642
Product 60,432 35,094 219,374
Licensing fees - - 3,284,703
Research grant payments - 73,360 273,663
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1,047,294 108,454 5,511,382
Expenses:
Research and development,
net of tax credits 2,595,906 1,957,328 27,994,485
General and administrative 1,021,281 674,336 12,019,092
Foreign exchange loss (gain) 33,385 (84,247) 744,221
Interest expense 1,820 875 906,217
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3,652,392 2,548,292 41,664,015
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Loss before the undernoted (2,605,098) (2,439,838) (36,152,633)
Interest income 106,792 199,923 2,152,084
Loss on extinguishment of debt - - (782,143)
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Loss before income taxes (2,498,306) (2,239,915) (34,782,692)
Income taxes:
Current (85,775) (66,780) (335,022)
-------------------------------------------------------------------------
Loss and comprehensive loss for
the period (2,584,081) (2,306,695) (35,117,714)
Deficit, beginning of period (32,533,633) (21,476,594) -
-------------------------------------------------------------------------
Deficit, end of period (35,117,714) (23,783,289) (35,117,714)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Loss per share - basic and
diluted (0.06) (0.05)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average common shares
outstanding 45,408,138 44,750,964
-------------------------------------------------------------------------
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ARIUS RESEARCH INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
-------------------------------------------------------------------------
Cumulative
Three-month Three-month since
period ended period ended inception
February 29, February 28, on August 11,
2008 2007 1999
$ $ $
-------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Loss for the period (2,584,081) (2,306,695) (35,117,714)
Items not involving cash:
Amortization of:
Facilities and equipment 92,314 81,415 1,371,185
Deferred costs - - 55,055
Leasehold inducements (10,371) (10,372) (66,524)
Loss on disposal of equipment - - 23,532
Write-off of leasehold
improvements - - 86,349
Leasehold inducement - - 89,148
Non-cash stock-based
compensation 170,077 210,584 1,800,678
Accretion of convertible
debentures - - 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
Change in non-cash operating
working capital items (784,438) 671,390 4,279,109
-----------------------------------------------------------------------
(3,116,499) (1,353,678) (25,707,078)
Financing activities:
Issue of shares, warrants and
units, net of issuance costs - - 38,281,778
Issuance of convertible bridge
loan, net - - 2,196,619
Repayment of convertible bridge
loan, including costs - - (2,408,886)
Exercise of compensation
warrants 1,697,446 - 1,706,027
Exercise of stock options 35,092 - 35,092
Draw of bank line of credit - - 655,000
Repayment of bank line of credit - - (655,000)
Bridge loan - - 300,000
Repayment of bridge loan - - (300,000)
Repayment of capital lease and
equipment financing obligations (6,260) (11,492) (296,691)
-----------------------------------------------------------------------
1,726,278 (11,492) 39,513,939
Investing activities:
Purchase of short-term
investments (1,299,844) (7,662,879) (44,450,921)
Maturity of short-term
investments 6,825,190 9,998,138 43,151,077
Leasehold inducements - - 243,780
Long-term investment - - (20,000)
Acquisition of facilities and
equipment (10,217) (222,258) (2,979,510)
Disposal of equipment - - 8,986
-----------------------------------------------------------------------
5,515,129 2,113,001 (4,046,588)
-----------------------------------------------------------------------
Increase in cash and cash
equivalents 4,124,908 747,831 9,760,273
Cash and cash equivalents,
beginning of period 5,635,365 4,077,065 -
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 9,760,273 4,824,896 9,760,273
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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.
%SEDAR: 00013708E