Transition Therapeutics Announces Second Quarter Fiscal 2014 Financial Results
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.
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:
-- 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;
-- 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;
-- 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.
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.
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 is nil in both the three month periods ended December 31, 2013
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
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
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
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
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
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
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.