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Press release from Marketwire

ProMetic Reports Its First Quarter 2011 Financial Results

Tuesday, June 14, 2011

ProMetic Reports Its First Quarter 2011 Financial Results16:30 EDT Tuesday, June 14, 2011MONTREAL, QUEBEC, CANADA--(Marketwire - June 14, 2011) -ProMetic Life Sciences Inc. (TSX:PLI) ("ProMetic"or the "Company") today reported its financial results for the first quarter of 2011. All amounts are in Canadian Dollars unless otherwise indicated. The financial information in regards to the three month period ended March 31, 2011 should be read in conjunction with the Company's financial statements as well as the Management's Discussion and Analysis dated June 14, 2011.HighlightsThe Company closed a global commercial transaction with Celgene Corporation ("Celgene") resulting in the forgiveness of the $10 million US loan entered into with Abraxis BioScience, Inc., a wholly-owned subsidiary of Celgene in February 2010, the whole subject to meeting certain administrative milestones; The Company announced the renegotiation of its secured debt, resulting in the postponement of $4 million of related debt repayments due in 2011 to Q3 2012; The Company achieved a pivotal milestone for the in-house manufacturing of plasma-derived proteins at commercial scale thereby expanding its reach into the lucrative plasma-derived therapeutics industry by establishing a new subsidiary ("NewCo"). NewCo, entered into a long-term lease on very favorable conditions with Quebec's Institut National de la RechercheScientifique ("INRS") for an existing state-of-the-art manufacturing facility. This facility, located in Laval's biotech cluster, will have a targeted plasma processing capacity of 150,000 liters per annum; The Company raised CAD $1.5 million for equity in NewCo. The investors in NewCo have authorized the temporary use of these funds for working capital purposes by the Company. The Company also relocated its headquarters to the new facility in Laval, reducing the overhead burden on the business; Subsequent to the quarter's end, the Company expanded and strengthened its partnership with Wuhan Institute of Biologic Products ("WIBP") and its parent company, China National Biotech Group ("CNBG"). This announcement followed a series of successful milestone achievements, a close cooperation between the parties in recent years and ProMetic's decision to establish NewCo, its new facility to manufacture plasma-derived therapeutics in Laval, Quebec, which was instrumental in the expansion of this relationship; Subsequent to quarter end, the Company secured an interest-free, repayable working capital grant in the amount of CAD $0.5 million from the Isle of Man Government's Department of Economic Development. The grant is repayable in 6 equal monthly installments commencing 6 months from the draw-down date; and, The Company concluded a series of equity investments by way of private placements amounting to total cash injections in ProMetic of $2.75 million since January 2011. "During the first quarter of 2011, management continued its work to build the underlying value of the Company's technologies and related intellectual property," stated Mr. Pierre Laurin, ProMetic's President and Chief Executive Officer. Mr. Laurin continued, "Work to improve the balance sheet was successfully undertaken as demonstrated by the debt reduction and successful financing activities.""The results for the first quarter of 2011, when compared to the results for the first quarter 2010, show a reduction year-on-year loss of around $0.5 million" commented Mr. Bruce Pritchard, the Company's Chief Financial Officer "The Protein technologies division recognized the first U.S. $2 million tranche of revenue associated with the recently announced Celgene transaction. I anticipate the remaining tranches of revenue totaling U.S. $8 million to be recognized during the course of 2011" added Mr. Pritchard. First Quarter Financial HighlightsFor the three month period ended March 31 (In thousands of Canadian dollars, except for per share amounts - unaudited)1st quarter ended March 3120112010Revenues2,8183,002Net profit (loss)(2,678)(3,128)Net loss per share – (basic and diluted)($0.1)($0.1)Weighted average number of outstanding shares356,000 341,000Total revenues for the first quarter of 2011, which were derived from the Protein Technologies unit, were $2.8 million compared with $3.0 million in 2010. The first quarter revenue came from sales of affinity adsorbents to major pharmaceutical companies as well as the initial tranche of revenue recognized from the Celgene transaction. It is worth reminding readers again that the revenues of the business do not accrue in a straight line during the year and that anticipated revenues are geared towards the latter quarters of the year.The combined costs of goods sold and rechargeable research and development expenses for the quarter ended March 31, 2011, totalled $0.8 million compared to $1.2 million for the quarter ended March 31, 2010. This difference is explained by the mix of product sales from period to period and by the volumes of individual products sold within that mix. There were no costs of goods sold associated with the licensing revenues disclosed in note 5 of the quarterly financial statements. Non rechargeable research and development expenses were $2.6 million for the quarter ended March 31, 2011, compared to $2.9 million for the quarter ended March 31, 2010. The variance is mainly attributable to the ongoing strategic cost reduction program implemented by Management. The Company generated a net loss of $2.7 million or $0.01 per share (basic and diluted), for the first quarter ended March 31, 2011, as compared to a net loss of $3.1 million or $0.01 per share (basic and diluted) for the quarter ended March 31, 2010. The reduction in net loss is primarily attributable to favorable foreign exchange impacts.Operating costs for the quarter decreased to $4.7 million from $5.7 million in the previous year. This decrease was attributable partly due to positive exchange movements, and partly due to lower cost of goods sold associated with the revenue mix. The Company also granted a total of 3,200,000 restricted share units ("RSUs") to certain executive officers of the Company subsequent to quarter end, as part of an incentive program designed to align the interests of the Company's executives with those of its shareholders, and in accordance with its Long Term Incentive Plan. The RSUs only vest upon achievement of various important corporate and commercial objectives that would in turn create significant shareholder value.Appointments to the Board of Directors at the May 18, 2011, Annual Meeting of Shareholders The following members were nominated to ProMetic's Board of Directors:Mr. G.F. Kym Anthony, Chair of DFG Investment Advisers; Mr. Robert Lacroix, Senior Vice-President of CTI Capital Securities Inc.; Mr. Pierre Laurin, President and CEO of ProMetic Life Sciences; Mrs. Louise Ménard, President of Groupe Méfor inc.; Mr. Paul Mesburis, Senior Portfolio Manager and Chief Compliance Officer, Excel Investment Counsel Inc.; Mrs. Nancy Orr, Consultant; Mrs. Louise Paradis, Senior Vice-President, Legal Affairs and Corporate Secretary of Banque de Développement du Canada; Dr. Roger Perrault, Independent Director; Mr. Bruce Wendel, Independent Director; and Mr. Benjamin Wygodny, President of Angus Partnership. Outlook Management's outlook for 2011 remains positive. Despite the fact that revenues from our development contracts have been lower than expected, resulting from amendments to the programs requested by our clients, Management has been able to control and modulate the cost base of the business.In the Proteins Technologies (Prion) division, the Company will continue to lobby alongside Macopharma for the adoption of the P-Capt® filter in the UK. The Company is hopeful that P-Capt® sales will commence following the reporting of the PRISM clinical study results, which is expected in late 2011.In addition to seeking other industrial scale users for the prion reduction technology, ProMetic will continue to support Octapharma AG in the adoption of its product, OctaplasLG®. Octapharma remains positive regarding the ultimate regulatory approval of its OctaplasLG® product. Therefore, the Company expects orders for resin to recommence late in 2011. Also in the Proteins Technologies (Plasma) division, the Company will continue the setting up of its cGMP pilot manufacturing plant with a view to commencing operations as soon as possible. This plant, together with the results arising from activities at the Wuhan Institute of Biologic Products will be used by the Company to leverage its other commercial-scale opportunities for the technology in other territories.In the small molecule Therapeutics division, the Company continues to focus on business development activities. Partnering discussions continue with respect to PBI-1402, its NCE analogues and other therapeutics. It is Management's goal that the Company close a strategic deal with a major pharmaceutical company and secure funding to further advance its various development programs.Finally, and in line with earlier commitments, Management continues to tightly control costs throughout the business, with a view to driving the Company towards self-sustainment and profitability.Additional Information in Regards to the Three month Period ended March 31, 2011 ProMetic's MD&A and 2011 First Quarter Financial Statements have been filed on Sedar (www.sedar.com) and are available on the Company's web site at www.prometic.com. About ProMetic Life Sciences Inc. ProMetic Life Sciences Inc. ("ProMetic") (www.prometic.com) is a biopharmaceutical company specialized in the research, development, manufacture and marketing of a variety of commercial applications derived from its proprietary Mimetic Ligand™ technology. This technology is used in large-scale purification of biologics and the elimination of pathogens. ProMetic is also active in therapeutic drug development with the mission to bring to market effective, innovative, lower cost, less toxic products for the treatment of hematology and cancer. Its drug discovery platform is focused on replacing complex, expensive proteins with synthetic "drug-like" protein mimetics. Headquartered in Montréal (Canada), ProMetic has R&D facilities in the U.K., the U.S. and Canada, manufacturing facilities in the U.K. and business development activities in the US, Europe, Asia and in the Middle-East.Forward Looking StatementsThis press release contains forward-looking statements about ProMetic's objectives, strategies and businesses that involve risks and uncertainties. These statements are "forward-looking" because they are based on our current expectations about the markets we operate in and on various estimates and assumptions. Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. Such risks and assumptions include, but are not limited to, ProMetic's ability to develop, manufacture, and successfully commercialize value-added pharmaceutical products, the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of ProMetic to take advantage of business opportunities in the pharmaceutical industry, uncertainties related to the regulatory process and general changes in economic conditions. You will find a more detailed assessment of the risks that could cause actual events or results to materially differ from our current expectations on page 24 of ProMetic's Annual Information Form for the year ended December 31, 2009, under the heading "Risk and Uncertainties related to ProMetic's business". As a result, we cannot guarantee that any forward-looking statement will materialize. We assume no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason, unless required by applicable securities laws and regulations. All amounts are in Canadian dollars unless indicated otherwise.FOR FURTHER INFORMATION PLEASE CONTACT: President and CEOPierre LaurinProMetic Life Sciences Inc.p.laurin@prometic.com+1-450-781-0115ORDirector, Communications & Investor RelationsFrederic DumaisProMetic Life Sciences Inc.f.dumais@prometic.com+1.450.781.0115