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Last updated on April 17, 2014 at 9:48 EDT

Transition Therapeutics Announces Third Quarter Fiscal 2013 Financial Results

May 7, 2013

TORONTO, May 7, 2013 /PRNewswire/ – Transition Therapeutics Inc. (“Transition” or the “Company”) (TSX: TTH; NASDAQ: TTHI), a
product-focused biopharmaceutical company developing therapeutics for
disease indications with large markets, today announced its financial
results for the three and nine month periods ended March 31, 2013.

Selected Highlights

During fiscal 2013 and up to the date of this press release, the Company
announced the following:

        --  On April 30, 2013, Transition announced the results of a
            five-week proof of concept clinical study of TT-401 in type 2
            diabetic and obese non-diabetic subjects. In the study, TT-401,
            a once-weekly administered peptide, demonstrated significant
            improvements in glycemic control and reductions in body weight;
        --  On November 28, 2012, Transition announced that their licensing
            partner Elan had enrolled the first patient in a Phase II study
            of ELND005 for the treatment of agitation/aggression in
            patients with moderate to severe Alzheimer's disease;
        --  On August 30, 2012, Transition announced that their licensing
            partner Elan had dosed the first patient in a Phase II clinical
            study of ELND005 in Bipolar Disorder.The study is a
            placebo-controlled, safety and efficacy study of oral ELND005
            as an adjunctive maintenance treatment in patients with Bipolar
            1 Disorder to delay the time to occurrence of mood episodes. As
            the first patient has been dosed in the study, Transition
            received a milestone payment of US$11 million from Elan.

Financial Liquidity

The Company’s cash and cash equivalents and short term investments were
$22,942,039 at March 31, 2013.

The Company’s current cash projection indicates that the current cash
resources should enable the Company to execute its core business plan
and meet its projected cash requirements well beyond the next 12
months.

Financial Review

For the three month period ended March 31, 2013, the Company recorded a
net loss of $2,903,331 ($0.11 loss per common share) compared to net
loss of $3,072,112 ($0.11 loss per common share) for the three month
period ended March 31, 2012.

For the nine month period ended March 31, 2013, the Company recorded net
income of $2,078,181 ($0.08 income per common share) compared to a net
loss of $9,733,290 ($0.39 loss per common share) for the nine month
period ended March 31, 2012.

Revenue is nil and $10,815,200 in the three and nine month periods ended
March 31, 2013 respectively, compared to nil in both three and nine
month periods ended March 31, 2012.

In August 2012, Elan dosed the first patient in a Phase 2 clinical study
of ELND005 in Bipolar Disorder.  In light of the amendments to the Elan
agreement, the Company has recognized $10,815,200 (US$11,000,000) as
revenue during the first quarter of fiscal 2013 which represents the
milestone payment received from Elan upon their commencement of the
next ELND005 clinical trial. The payment from Elan was received on
October 1, 2012.

Research and development expenses increased $483,948 or 26% from
$1,896,585 for the three month period ended March 31, 2012 to
$2,380,533 for the three month period ended March 31, 2013. For the
nine month period ended March 31, 2013, research and development
expenses increased $365,405 or 6% to $6,576,336 from $6,210,931 for the
same period in fiscal 2012.

The increases in research and development expenses are primarily due to
an increase in clinical development costs related to TT-401/402, which
has been partially offset by a decrease in clinical development costs
related to TT-301/302 as well as reduced salaries and related costs
resulting from headcount reductions which occurred during the nine
month period ended March 31, 2012.

General and administrative expenses decreased by $151,183 or 15% from
$1,022,040 for the three month period ended March 31, 2012 to $870,857
for the same period in fiscal 2013. For the nine month period ended
March 31, 2013, general and administrative expenses decreased
$1,107,798 or 30% to $2,537,199 from $3,644,997 for the same period in
fiscal 2012.

The decreases in general and administrative expenses for both the three
and nine month periods ended March 31, 2013 are due to decreases in
legal consulting fees and business development expenses. The decrease
in general and administrative expenses for the nine month period ended
March 31, 2013 is also attributed to decreased facility lease costs as
well as decreased salaries and related costs resulting from headcount
reductions as the comparative periods included severances relating to
terminations. In both the three and nine month periods ended March 31,
2013, the decrease in general and administrative expenses have been
partially offset by increased investor relation expenses.

About Transition

Transition is a biopharmaceutical company, developing novel therapeutics
for disease indications with large markets. The Company’s lead CNS drug
candidate is ELND005 for the treatment of Alzheimer’s disease and
bipolar disorder.  Transition lead metabolic drug candidate is TT-401
for the treatment of type 2 diabetes and accompanying obesity. The
Company’s shares are listed on the NASDAQ under the symbol “TTHI” and
the Toronto Stock Exchange under the symbol “TTH”. For additional
information about the Company, please visit www.transitiontherapeutics.com.  Extracts of the Financial Statements to Follow:

CONSOLIDATED BALANCE SHEETS
(Unaudited)
As at


    In Canadian Dollars                      March 31, 2013   June 30, 2012

    Assets                                                                 

    Current assets                                                         

    Cash and cash equivalents                    17,913,332      12,955,081

    Short term investments                        5,028,707       6,057,264

    Trade and other receivables                      53,875          43,658

    Investment tax credits                          165,065         241,951
    receivable

    Prepaid expenses and                            472,338         316,286
    deposits

                                                 23,633,317      19,614,240

    Non-current assets                                                     

    Property and equipment                          184,396         215,000

    Intangible assets                            15,929,319      17,263,790

    Total assets                                 39,747,032      37,093,030

    Liabilities                                                            

    Current liabilities                                                    

    Trade and other payables                        942,192       1,178,915

    Current portion of                            2,321,373       2,321,373
    contingent consideration
    payable

                                                  3,263,565       3,500,288

    Non-current liabilities                                                

    Contingent consideration                      1,434,958       1,434,958
    payable

    Leasehold inducement                             25,721          34,295

                                                  4,724,244       4,969,541

    Equity attributable to
    owners of the Company

    Share capital                               165,334,259     165,334,259

    Contributed surplus                          14,245,402      13,168,411

    Share-based payment reserve                   2,721,159       2,977,032

    Deficit                                   (147,278,032)   (149,356,213)

                                                 35,022,788      32,123,489

    Total liabilities and equity                 39,747,032      37,093,030

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
For the nine and three month periods ended March 31, 2013 and 2012
(Unaudited)


                    Nine month   Nine month   Three month    Three month
                   period ended period ended  period ended   period ended
    In Canadian     March 31,    March 31,   March 31, 2013 March 31, 2012
    Dollars            2013         2012

    Revenues                                                              

    Licensing fees   10,815,200            -              -              -

    Expenses                                                              

    Research and      6,576,336    6,210,931      2,380,533      1,896,584
    development

    Selling,
    general and
    administrative
    expenses          2,537,199    3,644,997        870,857      1,022,040

    Loss on
    disposal of
    property and
    equipment                 -      125,748              -          7,125

    Operating         1,701,665  (9,981,676)    (3,251,390)    (2,925,749)
    income (loss)

    Interest            107,448      124,352         38,959         44,013
    income

    Interest                  -        (851)              -              -
    expense

    Foreign             269,068      124,885        309,100      (190,376)
    exchange gain
    (loss)

    Net income
    (loss) and
    comprehensive
    income (loss)
    for the period    2,078,181  (9,733,290)    (2,903,331)    (3,072,112)

    Basic and
    diluted net
    income
    (loss) per
    common share           0.08       (0.39)         (0.11)         (0.11)

Notice to Readers: Information contained in our press releases should be
considered accurate only as of the date of the release and may be
superseded by more recent information we have disclosed in later press
releases, filings with the OSC, SEC or otherwise. Except for historical
information, this press release may contain forward-looking statements,
relating to expectations, plans or prospects for Transition, including
conducting clinical trials. These statements are based upon the current
expectations and beliefs of Transition’s management and are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking
statements. These risks and uncertainties include factors beyond
Transition’s control and the risk factors and other cautionary
statements discussed in Transition’s quarterly and annual filings with
the Canadian commissions.

 

 

 

SOURCE Transition Therapeutics Inc.


Source: PR Newswire