Quantcast

Transition Therapeutics Announces Second Quarter Fiscal 2014 Financial Results

February 12, 2014

TORONTO, Feb. 12, 2014 /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 six month periods ended December 31, 2013.

Selected Highlights

Highlights for the Company during the six month period ended December
31, 2013 and up to the date of this MD&A include the following:

ELND005:

        --  December 18, 2013 - Perrigo Company plc "(Perrigo") completed
            its acquisition of Elan Pharmaceuticals and all its
            subsidiaries.With this acquisition, Perrigo acquired all the
            rights and obligations of Elan under the collaboration
            agreement with Waratah for the development and
            commercialization of ELND005;

        --  September 4, 2013 - Transition announced that their licensing
            partner Elan had dosed the first patient in a Phase 2a clinical
            study of ELND005 in Down Syndrome;

        --  July 17, 2013 - Transition announced that the US Food and Drug
            Administration (FDA) has granted Fast Track Designation to the
            development program for ELND005 which was submitted for the
            treatment of Neuropsychiatric Symptoms (NPS) in Alzheimer's
            disease (AD).The FDA concluded that the development program for
            ELND005 for the treatment of NPS in AD meets their criteria for
            Fast Track Designation. Transition's licensing partner, Elan is
            responsible for all development and commercialization
            activities and costs of ELND005;

TT601:

        --  July 23, 2013 - Transition announced the exclusive licensing of
            worldwide rights to a novel small molecule transcriptional
            regulator ("TT601") from Lilly for the treatment of
            osteoarthritis ("OA") pain.TT601 is a potent and selective
            ligand for a novel nuclear receptor target. Modulating the
            activity of this novel target in patients with osteoarthritis
            may provide pain relief to a large segment of OA patients who
            do not have adequate response to therapy with NSAIDs
            (non-steroidal anti-inflammatory drugs). TT601 has completed
            preclinical development to date and Transition anticipates can
            enter the clinic in the first half of calendar 2014;

Corporate Developments:

        --  August 15, 2013 - Transition announced the closing of the
            private placement involving Jack W. Schuler, Larry N. Feinberg,
            Oracle Investment Management, certain Transition Board members,
            management and other existing shareholders of US$11 million by
            purchasing 2,625,300 units of the Company at a price of US$4.19
            per unit.

Financial Liquidity

The Company’s cash, cash equivalents and short term investments were
$36,387,207 at December 31, 2013.

In light of the recent private placement, the Company’s cash projections
indicate 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 December 31, 2013, the Company recorded
a net loss of $1,253,772 ($0.04 loss per common share) compared to net
loss of $2,754,534 ($0.10 loss per common share) for the three month
period ended December 31, 2012.

For the six month period ended December 31, 2013, the Company recorded a
net loss of $3,584,958 ($0.12 loss per common share) compared to a net
income of $4,981,512 ($0.19 income per common share) for the six month
period ended December 31, 2012.

Net loss decreased $1,500,762 during the three month period ended
December 31, 2013 compared to the three month period ended December 31,
2012. The decrease in net loss during this three month period is mainly
due to decreases in research and development expenses and increased
foreign exchange gains. The decrease in net loss has been partially
offset by increased general and administrative expenses.

Net loss increased $8,566,470 during the six month period ended December
31, 2013 compared to the six month period ended December 31, 2012. The
increase in net loss for the six month period ended December 31, 2013
is largely attributed to the revenue recognized during the first
quarter of fiscal 2013 resulting from the $10,815,200 (US$11 million)
milestone payment received from Elan upon the commencement of the next
ELND005 clinical trial. The increase in net loss is also attributed to
increases in general and administrative expenses, which has been offset
by decreases in research and development expenses and an increase in
the foreign exchange gain recognized in the quarter.

Revenue

Revenue is nil in both the three month periods ended December 31, 2013
and 2012.

Revenue is nil in the six month period ended December 31, 2013 compared
to $10,815,200 (US$11,000,000) for the six month period ended December
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 recognized $10,815,200 (US$11,000,000) as
revenue during the three month period ended September 30, 2012 which
represents the milestone payment received from Elan upon their
commencement of the next ELND005 clinical trial.

Research and Development

Research and development expenses decreased by $981,490 from $2,141,257
for the three month period ended December 31, 2012 to $1,160,767 for
the three month period ended December 31, 2013. For the six month
period ended December 31, 2013, Research and development expenses
decreased $2,027,190 to $2,168,613 from $4,195,803 for the same period
in fiscal 2013.

The decreases in research and development expenses for both the three
and six month periods ended December 31, 2013 are primarily due to
decreases in clinical development costs related to diabetes drug
candidate TT401/TT402 as well as decreased amortization resulting from
the write off of the TT301/302 technology which have been partially
offset by an increase in clinical development costs related to TT601.

General and Administrative

General and administrative expenses increased by $124,279 from $849,440
for the three month period ended December 31, 2012 to $973,719 for the
three month period ended December 31, 2013. For the six month period
ended December 31, 2013, general and administrative expenses increased
$254,737 to $1,921,079 from $1,666,342 for the same period in fiscal
2013.

The increases in general and administrative expenses for both the three
and six month periods ended December 31, 2013 are primarily due to
increases in legal consulting fees and increased business and corporate
development activities.

About Transition

Transition is a product-focused 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, Bipolar Disorder and Down syndrome. Transition’s
lead metabolic drug candidate is TT401 for the treatment of type 2
diabetes and accompanying obesity. Transition has also in-licensed a
lead drug candidate from Lilly in the area of osteoarthritis pain
(TT601).

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)


    In Canadian Dollars                 December 31, 2013   June 30, 2013  

    Assets                                                                 

    Current assets                                                         

    Cash and cash equivalents                  32,341,634      23,067,937  

    Short term investments                      4,045,573       5,057,702  

    Other receivables                              82,797          35,792  

    Investment tax credits receivable             291,049         180,652  

    Prepaid expenses and deposits                 430,563         359,164  

                                               37,191,616      28,701,247  

    Non-current assets                                                     

    Property and equipment                        156,211         168,034  

    Intangible assets                           8,418,534       8,938,674  

    Total assets                               45,766,361      37,807,955  

    Liabilities                                                            

    Current liabilities                                                    

    Trade and other payables                      523,168         874,149  

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

                                                2,844,541       3,195,522  

    Non-current liabilities                                                

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

    Leasehold inducement                           17,147          22,863  

                                                4,296,646       4,653,343  

    Equity attributable to owners of
    the Company

    Share capital                             174,889,554     165,367,524  

    Warrants                                    2,025,839               -  

    Contributed surplus                        14,768,221      14,768,002  

    Share-based payment reserve                 2,703,975       2,352,002  

    Deficit                                 (152,917,874)   (149,332,916)  

                                               41,469,715      33,154,612  

    Total liabilities and equity               45,766,361      37,807,955  

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

For the six and three month periods ended December 31, 2013 and 2012

(Unaudited)


                      Six month    Six month    Three month
                       period        period       period
                        ended        ended         ended      Three month
                      December      December     December     period ended
    In Canadian          31,          31,           31,       December 31,
    Dollars             2013          2012         2013           2012

    Revenues                                                              

    Licensing fees             -   10,815,200             -              -

    Expenses                                                              

    Research and
    development        2,168,613    4,195,803     1,160,767      2,141,257

    Selling,
    general and
    administrative
    expenses           1,921,079    1,666,342       973,719        849,440

    Operating
    income (loss)    (4,089,692)    4,953,055   (2,134,486)    (2,990,697)

    Interest
    income               102,868       68,489        56,731         34,872

    Foreign
    exchange gain
    (loss)               401,866     (40,032)       823,983        201,291

    Net income
    (loss) and
    comprehensive
    income (loss)
    for the period   (3,584,958)    4,981,512   (1,253,772)    (2,754,534)

    Basic and
    diluted net
    income
    (loss) per
    common share          (0.12)         0.19        (0.04)         (0.10)

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



comments powered by Disqus