Trading Symbol: QPT: TSX Venture Exchange
- the Company plans to raise up to $1,000,000 in a private placement -
EDMONTON, May 25 /CNW/ - Quest PharmaTech Inc. ("Quest" or the "Company") announces the highlights of financial and operational results of the fiscal year ended January 31, 2007 (and subsequent thereto).
Financial Highlights
Net consolidated loss for the year ended January 31, 2007 was $1,454,077 or $0.03 per share as compared to a consolidated loss of $3,503,813 or $0.08 per share for the year ended January 31, 2006.
Research and development expenditures totaled $861,954 for the year ended January 31, 2007 compared to $1,257,649 for the year ended January 31, 2006. General and administrative expenses were $640,718 for the year ended January 31, 2007 compared to $1,069,241 for the year ended 2006. The decrease in R&D and G&A expenses in 2007 compared to 2006 relates to the Company's streamlining of drug development and administrative activities.
At January 31, 2007, cash and cash equivalents were $123,022 as compared to $115,505 at January 31, 2006. The company also has debt of $1,230,000 in the form of a $1,000,000 (face value) convertible debenture (exercisable at $0.25 and due on September 22, 2007) and $230,000 in demand loans from two insiders.
Subsequent to year end, in March, 2007, the Company raised $960,000 in a non-brokered private placement. In addition, in May, 2007, the Company received $300,000 in an equity investment from KMH Co. Ltd., as part of the distribution agreement signed between the parties. The Company expects to receive in late May, 2007, the first installment of an up-front fee from Paramount BioSciences under the license agreement signed between the parties. During the year, the Company recognized funding of $53,760 from the National Research Council-Industrial Research Assistance Program to develop SL017 for dermatology applications and continuing grants of $55,000 from Alberta Ingenuity Fund related to oncology applications. The Company expects to receive further NRC-IRAP funding amounts of $13,340 and $26,500 for dermatology related applications.
Currently, the Company has 4,800,000 outstanding share purchase warrants exercisable at $0.20 and expiring in March 2008. If exercised, these warrants would generate up to $960,000 of additional funding for the Company. The Company is expected to receive an additional $1,000,000 equity investment from KMH Co. upon reaching specific milestones related to SL017 for hair removal applications in the second half of 2007. Also during this fiscal year, Quest will receive the second installment of the up-front fee from its license agreement with Paramount BioSciences.
On May 22, 2007, the Company's Board of Directors provided approval for the Company to raise up to $1,000,000 by way of a private placement of up to 6,666,667 common shares at $0.15 per common share, subject to TSX Venture Exchange approval. It is anticipated that insiders of the Company will be subscribing for common shares under this proposed private placement.
Operational Highlights
Clinical Development
Encouraged by a Canadian Phase I clinical study with SL017 for hair removal and acne applications, the Company initiated a 50 patient Phase I/II clinical trial in January, 2007 to investigate the appropriate light dose to be used with SL017 topical gel for cosmetic hair removal applications.
A pivotal clinical trial was initiated in Korea in May, 2007 by the Company's partner, KMH Co., to study the efficacy of hair removal applications with SL017 Topical gel using Intense Pulsed Light (IPL).
The Company is approaching full enrollment in the Canadian Phase I clinical trial of SL017 Topical Gel for PDT Treatment of Actinic Keratosis.
Preclinical Development
The Company demonstrated the utility of SL052 in PDT treatment of prostate cancer in pre-clinical animal studies. Eradication of tumor tissues and shut-down of metabolic activity at tumor site were shown using a prostate cancer model in small rodents. PDT treatment of the prostate gland in a canine prostate model caused complete glandular tissue ablation within the intact capsule.
The Company initiated a pre-clinical study in August, 2006 to evaluate the utility of SL017 for acne in a pig skin model.
The Company investigated the feasibility of development of an alternative, portable light delivery system for hair removal application with SL017. Alberta Microelectronic Centre Corp. has been contracted to manufacture a prototype portable light system that is amenable as an over-the-counter (OTC) light delivery system for home use.
The Company has signed an agreement with the Alberta Research Council ("ARC") whereby the ARC will undertake research to develop a semi-synthetic method for the manufacture of Hypocrellin B ("HB"), an active ingredient for the production of SL017 and SL052. If the project were to be successful, Quest will receive an exclusive license, on pre-determined terms, to the developed technology from the ARC to manufacture and commercialize HB based products.
Intellectual Property
The following patents were received during fiscal 2007:
- Aliphatic amino-substituted demethoxylated Hypocrellins and their
synthesis for U.S.A. and Australia
- Perylenequinones for use with immunotherapy agent for Europe and
Australia
- Amino-substituted Hypocrellins for use as sonosensitizers for Europe
- Perylenequinones for use as photosensitizers and sonosenitizers for
Australia
- European and Chinese patent to protect the Company's Bionex products.
Business Development
In October, 2006, the Company signed a distribution agreement with KMH Co. Ltd., for the Asian rights to SL017. Under the terms of the agreement, Quest will receive $1,500,000 in equity investment. $500,000 has already been received.
Subsequent to January 31, Quest signed a multinational license agreement with Paramount BioSciences LLC to develop and commercialize SL017 for dermatology applications, in return Quest will receive an upfront fee and potential future milestone payments in excess of $35 million USD, plus royalties on product sales.
Sale of non-core assets
- sale of Accu-MAb to a third party for gross proceeds of $200,000.
- sale of SHGP to a third party for gross proceeds of 1,250,000 RMB
(Cdn $177,315).
- sale of Anticort to a third party for proceeds of $50,000 U.S and
50,000 common stock of Samaritan Pharmaceuticals, Inc.
Personnel update
Appointment of Madi R. Madiyalakan as its CEO effective August 1, 2006.
Election of Dr. Donald Rix, Dr. Madiyalakan, Mr. Ian McConnan and Dr. Bin Huang as Board of Directors at the Company's December 7, 2006 Annual and General Meeting of Shareholders.
Departure, effective March 31, 2007, of Dr. Selvaraj Naicker, an officer and former Director of the Company, upon expiry of his five year employment contract.
About Quest PharmaTech Inc.
The Corporation is a publicly traded (TSX Venture Exchange: QPT), 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 dermatological conditions based on its unique photodynamic and sonodynamic therapy platform.
Additional information related to the Company, including the Company's financial statements, and management discussion and analysis, is on SEDAR at www.sedar.com.
Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements 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.
"TSX Venture Exchange has neither approved nor disapproved of the
information contained herein"
%SEDAR: 00008400E