YM Biosciences Reports Second Quarter 2007 Operational and Financial Results
MISSISSAUGA, ON, Feb. 9 /CNW/ - YM BioSciences Inc. (AMEX:YMI, TSX:YM,
AIM:YMBA), an oncology company that identifies, develops and commercializes
differentiated products for patients worldwide, today reported operational and
financial results for the second quarter of fiscal 2007, ended December 31,
2006.
"We closed the last quarter anticipating results from the third interim
analysis of the pivotal Phase III trial of tesmilifene in rapidly progressing
metastatic breast cancer. With the surprising and disappointing news we
received in January that tesmilifene would not meet its primary endpoint in
this trial, we are now undertaking a thorough analysis of the study data and
evaluating the future of this compound," said David Allan, Chairman and CEO of
YM BioSciences. "However, this setback also highlights the importance of our
other late stage assets, nimotuzumab and AeroLEF(TM), and the resilience of
our business model that spreads risk across a portfolio of development
programs and partners. YM BioSciences is exiting our fiscal second quarter in
a solid financial position and will continue clinical advancement of
nimotuzumab and AeroLEF(TM), two highly differentiated products with
significant market potential, while determining the prospects for tesmilifene
and seeking additional assets that fit our development profile."
Operational Highlights:
Tesmilifene:
- In late January 2007, the Data Safety Monitoring Board (DSMB)
overseeing the 'DEC' Phase III pivotal trial of tesmilifene in
combination with epirubicin and cyclophosphamide for the treatment of
rapidly progressing metastatic breast cancer completed the third
planned interim analysis. Evaluating data that included 351 patient
events, the DSMB advised the company that although there were no
safety concerns and that the trial was well conducted, it was highly
unlikely to meet its primary efficacy endpoint, a statistically
significant improvement in overall survival for the tesmilifene arm,
and recommended the trial be stopped. A thorough analysis of the data
obtained in the trial is underway and must be completed before the
impact of this outcome on any ongoing or future development of
tesmilifene can be determined.
Nimotuzumab:
- During the quarter, global development of nimotuzumab in multiple
tumor types, including pediatric and adult glioma, pancreatic cancer,
prostate cancer, non-small cell cancer, esophageal cancer, cervical
cancer, and breast cancer, continued through a consortium of
international development partners. Enrollment should be completed
during the first half of 2007 in a pivotal Phase III trial of
nimutuzumab as first-line therapy in pediatric pontine glioma being
conducted by Oncoscience AG in Germany. YM BioSciences is in the
planning stages of a Phase II study in the same indication in the
United States and Canada.
AeroLEF(TM):
- Final results from a two-part Phase IIb trial (DLKLEF-AP4) in post-
surgical pain are expected in the first half of 2007. The second part
of this study, still underway, is a randomized, double-blind, placebo
controlled trial of 99 patients designed to evaluate the safety and
efficacy of AeroLEF(TM) for the management of pain following elective
orthopedic surgery. Results from Part I of the study, an open-label
segment, were presented at the American Society of Anesthesiologists
(ASA) Annual Meeting in October, 2006. These data suggested that
inhaled AeroLEF(TM) was well tolerated and produced clinically
meaningful, highly individualized analgesia for acute post-surgical
pain.
Financial results (CDN dollars) for the second quarter
(Sept. 30, 2006 - Dec. 31, 2006):
Total revenue for the quarter ended December 31, 2006 was $2.0 million
compared to $0.6 million for the same period last fiscal year. Total revenue
for the first six months of the 2007 fiscal year was $3.8 million compared to
$0.8 million for the first six months of the corresponding period last fiscal
year. Revenue was generated from out-licensing agreements and interest income.
Licensing revenue increased mainly due to the licenses for nimotuzumab to
Innogene Kalbiotech Private Limited (January 2006) for countries in Southeast
Asia and Africa and Daiichi Pharmaceutical Co., Ltd. (July 2006) for Japan.
Total operating expenditures for the quarter ended December 31, 2006 were
$10.4 million compared to $6.1 million for the same period last year. Total
expenditures for the first six months of the 2006 fiscal year were
$20.2 million compared to $12.3 million for the first six months of the
corresponding period last year. General and administrative expenses for the
second quarter were $2.0 million and for the first six months were
$3.8 million compared with $1.3 million and $2.7 million respectively for the
same periods in the prior year. Licensing and Product Development expenses for
the second quarter were $8.5 million and for the first six months were
$16.3 million compared to $4.8 million and $9.6 million respectively for the
same periods in the prior year. The increases were due mainly to the addition
of a senior management team with the acquisition of Eximias in May 2006 and
increased expenditures on nimotuzumab.
Costs related to tesmilifene for the three month period ended
December 31, 2006 decreased by $0.9 million to $2.3 million compared to
$3.2 million for the comparable period last year. Year-to-date, costs have
decreased by $2.1 million to $3.9 million compared to $6.0 million for the
same period in the prior year. Costs associated directly to AeroLEF(TM)
increased by $0.4 million for the quarter ended and by $0.3 million for the
six months ended December 31, 2006 due to additional costs associated with the
Phase IIb Clinical Trial. Costs associated directly to nimotuzumab increased
by $0.9 million to $2.4 million for the quarter ended and by $3.2 million to
$4.9 million for the six months ended December 31, 2006 as a result of costs
associated with an increase in manufacturing capacity.
Net loss for the second quarter was $8.4 million and for the year to date
was $18.1 million compared to $5.5 million and $11.5 million respectively for
the same periods last year.
As at December 31, 2006 the Company had cash, cash equivalents and
short-term deposits totaling $86.0 million and accounts payable and accrued
liabilities of $2.1 million compared to $88.3 million and $3.7 million
respectively at June 30, 2006.
As at December 31, 2006 the Company had 55,782,023 common shares
outstanding, 2,380,953 common shares held in escrow for contingent additional
payment related to the acquisition of DELEX Therapeutics Inc., 9,022,277
warrants and 4,801,622 options outstanding.
Restatement of financial results for fiscal first quarter 2007
YM BioSciences also announced it is issuing restated consolidated
financial results for the fiscal first quarter ended September 30, 2006. The
restatement will reflect changes to the accounting treatment of a licensing
payment and has no effect on the Company's current cash position or operating
expenses.
During the first quarter, YM BioSciences received a non-refundable
payment from Daiichi of $16.2 million (US$14.5 million) less withholding tax
of $1.6 million (US$1.45 million) for a net amount received of $14.6 million
(US$13.05 million). Since the contract obligates the Company to participate
with the licensee for a period of time, the payment is accounted for as
'deferred revenue' and amortized over the estimated period of collaboration
required. As disclosed in the original Q1 financial statements and MD&A, the
net amount received was credited to deferred revenue and amortized.
It was subsequently determined that, according to GAAP, the revenue
should be recognized on a gross basis and the withholding tax should be
treated as income tax and expensed immediately. Accordingly, the restated Q1
statements defer and amortize the gross payment $16.2 million
(US 14.5 million) and expense immediately the total amount of withholding tax
$1.6 million (US$1.45 million). As a result, the restated Q1 financial
statements show an income tax expense of $1,622,695 and additional revenue of
$67,613 resulting in an additional loss of $1,555,082 and a loss per share of
$0.17 vs. $0.15 reported.
About YM BioSciences
YM BioSciences, Inc. is an oncology company that identifies, develops and
commercializes differentiated products for patients worldwide. The Company has
two late-stage products: nimotuzumab, a humanized monoclonal antibody that
targets the epidermal growth factor receptor (EGFR) and is approved in several
countries for treatment of various types of head and neck cancer; and
AeroLEF(TM), a unique, inhaled-delivery composition of free and
liposome-encapsulated fentanyl in development for the treatment of moderate to
severe pain, including cancer pain.
This press release may contain forward-looking statements, which reflect
the Company's current expectation regarding future events. These
forward-looking statements involve risks and uncertainties that may cause
actual results, events or developments to be materially different from any
future results, events or developments expressed or implied by such
forward-looking statements. Such factors include, 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. Certain of the assumptions
made in preparing forward-looking statements include but are not limited to
the following: that nimotuzumab will continue to demonstrate a competitive
safety profile in ongoing and future clinical trials; and that YM and its
various partners will complete their respective clinical trials within the
timelines communicated in this release. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Summary financial statements attached:
YM BIOSCIENCES INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
-------------------------------------------------------------------------
December 31, June 30,
2006 2006
-------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 20,464,351 $ 2,735,317
Short-term deposits 65,534,646 85,606,117
Accounts receivable 1,633,214 2,214,775
Prepaid expenses 224,935 318,338
-----------------------------------------------------------------------
87,857,146 90,874,547
Capital assets 322,563 304,985
Intangible assets 7,602,427 8,868,528
-------------------------------------------------------------------------
$ 95,782,136 $ 100,048,060
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,127,256 $ 2,367,042
Accrued liabilities 981,127 1,350,923
Deferred revenue 4,822,904 738,297
-----------------------------------------------------------------------
6,931,287 4,456,262
Deferred revenue 11,160,195 844,275
Shareholders' equity:
Share capital 172,773,599 172,771,544
Share purchase warrants 4,597,808 4,597,988
Contributed surplus 4,937,076 3,944,492
Deficit accumulated during the
development stage (104,617,829) (86,566,501)
-----------------------------------------------------------------------
77,690,654 94,747,523
Basis of presentation
Commitments
Subsequent event
-------------------------------------------------------------------------
$ 95,782,136 $ 100,048,060
-------------------------------------------------------------------------
-------------------------------------------------------------------------
YM BIOSCIENCES INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations
(Expressed in Canadian dollars)
---------------------------------------------------------
Three months ended
December 31,
2006 2005
---------------------------------------------------------
(Unaudited)
Revenue $ 1,196,126 $ 379,242
Interest income 801,673 169,988
---------------------------------------------------------
1,997,799 549,230
Expenses:
General and
administrative 1,950,975 1,253,873
Licensing and product
development 8,466,106 4,810,644
-------------------------------------------------------
10,417,081 6,064,517
---------------------------------------------------------
Loss before the
undernoted (8,419,282) (5,515,287)
Gain (loss) on foreign
exchange 112,891 (21,005)
Loss on sale of
marketable securities - -
---------------------------------------------------------
Loss before income taxes (8,306,391) (5,536,292)
Income taxes 46,080 -
---------------------------------------------------------
Loss for the period $ (8,352,471) $ (5,536,292)
---------------------------------------------------------
---------------------------------------------------------
Basic and diluted
loss per common
share $ (0.15) $ (0.14)
---------------------------------------------------------
---------------------------------------------------------
Weighted average
number of common
shares outstanding,
excluding 2,380,953
common shares held
in escrow for
contingent
additional payment
related to the
Delex acquisition 55,782,023 39,139,493
---------------------------------------------------------
---------------------------------------------------------
-------------------------------------------------------------------------
Period from
inception on
August 17,
Six months ended 1994 to
December 31, December 31,
2006 2005 2006
-------------------------------------------------------------------------
(Unaudited) (Unaudited)
Revenue $ 2,056,824 $ 467,750 $ 3,955,979
Interest income 1,696,385 324,487 6,586,234
-------------------------------------------------------------------------
3,753,209 792,237 10,542,213
Expenses:
General and
administrative 3,831,865 2,681,772 32,940,064
Licensing and
product development 16,330,971 9,586,653 78,368,885
-----------------------------------------------------------------------
20,162,836 12,268,425 111,308,949
-------------------------------------------------------------------------
Loss before the undernoted (16,409,627) (11,476,188) (100,766,736)
Gain (loss) on foreign
exchange 27,074 16,050 (193,556)
Loss on sale of
marketable securities - - (1,191,329)
-------------------------------------------------------------------------
Loss before income taxes (16,382,553) (11,460,138) (102,151,621)
Income taxes 1,668,775 - 1,676,075
-------------------------------------------------------------------------
Loss for the period $ (18,051,328) $ (11,460,138) $(103,827,696)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted loss
per common share $ (0.32) $ (0.29)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number
of common shares
outstanding excluding
2,380,953 common shares
held in escrow for
contingent additional
payment related to the
Delex acquisition 55,782,009 38,964,104
-------------------------------------------------------------------------
-------------------------------------------------------------------------
YM BIOSCIENCES INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Deficit Accumulated During the
Development Stage
(Expressed in Canadian dollars)
---------------------------------------------------------
Three months ended
December 31,
2006 2005
---------------------------------------------------------
(Unaudited)
Deficit, beginning of
period $ (96,265,358) $ (66,675,740)
Cost of purchasing shares
for cancellation in excess
of book value - -
Loss for the period (8,352,471) (5,536,292)
---------------------------------------------------------
Deficit, end of period $(104,617,829) $ (72,212,032)
---------------------------------------------------------
---------------------------------------------------------
-------------------------------------------------------------------------
Period from
inception on
August 17,
Six months ended 1994 to
December 31, December 31,
2006 2005 2006
-------------------------------------------------------------------------
(Unaudited) (Unaudited)
Deficit, beginning of
period $ (86,566,501) $ (60,751,894) $ -
Cost of purchasing shares
for cancellation in excess
of book value - - (790,133)
Loss for the period (18,051,328) (11,460,138) (103,827,696)
-------------------------------------------------------------------------
Deficit, end of period $(104,617,829) $ (72,212,032) $(104,617,829)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
YM BIOSCIENCES INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
---------------------------------------------------------
Three months ended
December 31,
2006 2005
---------------------------------------------------------
(Unaudited)
Cash provided by (used in):
Operating activities:
Loss for the period $ (8,352,471) $ (5,536,292)
Items not involving cash:
Amortization of
capital assets 25,352 12,605
Amortization of
intangible assets 633,050 267,843
Loss on sale of
marketable securities - -
Stock-based employee
compensation 473,369 263,822
Stock-based consideration - -
Warrants-based
consideration - -
Change in non-cash
operating working capital:
Accounts receivable
and prepaid expenses (193,290) 195,279
Accounts payable,
accrued liabilities
and deferred revenue (452,558) (58,640)
-------------------------------------------------------
(7,866,548) (4,855,383)
Financing activities:
Issuance of common shares
on exercise of warrants - 185,916
Repayment of debentures - -
Net proceeds from
issuance of shares
and warrants - -
Issuance of common shares
on exercise of options - 59,750
Redemption of preferred
shares - -
Purchase of shares for
cancellation - -
-------------------------------------------------------
- 245,666
Investing activities:
Short-term deposits, net (13,888,114) -
Proceeds on sale of
marketable securities - -
Additions to capital and
intangible assets (66,647) (4,089)
-------------------------------------------------------
(13,954,761) (4,089)
---------------------------------------------------------
Increase (decrease) in
cash and cash equivalents (21,821,309) (4,613,806)
Cash assumed on
acquisitions - -
Cash and cash equivalents,
beginning of period 42,285,660 24,914,798
---------------------------------------------------------
Cash and cash equivalents,
end of period $ 20,464,351 $ 20,300,992
---------------------------------------------------------
---------------------------------------------------------
Supplemental cash flow
information:
Non-cash items:
Issuance of shares
from escrow on Delex
acquisition $ - $ -
Issuance of common
shares on Eximias
acquisition - -
Issuance of common
shares in exchange
for licensed patents - -
---------------------------------------------------------
---------------------------------------------------------
-------------------------------------------------------------------------
Period from
inception on
August 17,
Six months ended 1994 to
December 31, December 31,
2006 2005 2006
-------------------------------------------------------------------------
(Unaudited) (Unaudited)
Cash provided by (used in):
Operating activities:
Loss for the period $ (18,051,328) $ (11,460,138) $(103,827,696)
Items not involving cash:
Amortization of
capital assets 50,699 25,169 382,381
Amortization of
intangible assets 1,266,101 496,371 2,673,019
Loss on sale of
marketable securities - - 1,191,329
Stock-based employee
compensation 992,584 550,741 5,429,147
Stock-based consideration - 100,000 292,750
Warrants-based
consideration - - 54,775
Change in non-cash
operating working capital:
Accounts receivable
and prepaid expenses 674,964 (53,770) (829,427)
Accounts payable,
accrued liabilities
and deferred revenue 12,790,945 (323,672) 14,849,839
-----------------------------------------------------------------------
(2,276,035) (10,665,299) (79,783,883)
Financing activities:
Issuance of common shares
on exercise of warrants 1,875 185,916 4,284,055
Repayment of debentures - - (1,469,425)
Net proceeds from
issuance of shares
and warrants - - 123,276,729
Issuance of common shares
on exercise of options - 222,250 2,505,014
Redemption of preferred
shares - - (2,630,372)
Purchase of shares for
cancellation - - (1,029,679)
-----------------------------------------------------------------------
1,875 408,166 124,936,322
Investing activities:
Short-term deposits, net 20,071,471 29,882,472 (65,340,721)
Proceeds on sale of
marketable securities - - 1,404,450
Additions to capital and
intangible assets (68,277) (10,720) (518,430)
-----------------------------------------------------------------------
20,003,194 29,871,752 (64,454,701)
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents 17,729,034 19,614,619 (19,302,262)
Cash assumed on
acquisitions - - 39,766,613
Cash and cash equivalents,
beginning of period 2,735,317 686,373 -
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 20,464,351 $ 20,300,992 $ 20,464,351
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental cash flow
information:
Non-cash items:
Issuance of shares
from escrow on Delex
acquisition $ - $ 1,464,284 $ 11,326,981
Issuance of common
shares on Eximias
acquisition - - 35,063,171
Issuance of common
shares in exchange
for licensed patents - 100,000 100,000
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For further information: Enquiries: Thomas Fechtner, The Trout Group LLC,
Tel. (212) 477-9007 x31, Fax (212) 460-9028, Email:
tfechtner(at)troutgroup.com; James Smith, the Equicom Group Inc., Tel. (416)
815-0700 x 229, Fax (416) 815-0080, Email: jsmith(at)equicomgroup.com; Media
Enquiries: Mike Beyer, Sam Brown Inc., (773) 463-4211, beyer(at)sambrown.com
(YMBA)
END
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