Protox Therapeutics Inc. ("Protox") (TSX: PRX), a developer of innovative products for the treatment of urological diseases, today announced financial results and achievements for the quarter ended June 30, 2011.
"During the second quarter of 2011, Protox continued to make progress," said Dr. Lars Ekman, Executive Chairman and President of Protox. "Development operations have been successfully transferred to the newly established office in San Diego, a U.S. IND has been activated, and the team's current focus is the operational preparation for the upcoming transrectal study."
Second Quarter 2011 Operational and Financial Highlights
- Entered into a US $15 million loan agreement with Oxford Finance LLC. Proceeds are being used to finance Protox's late stage drug development program for the treatment of Benign Prostate Hyperplasia (BPH).
- Completed the operational transition to the new office in San Diego, California. San Diego is a leading biotech cluster with access to a deep pool of management talent and experience in biologic drug development.
- Transitioned Chairman Lars Ekman, M.D. Ph.D., to the role of Executive Chairman and President of Protox and appointed Allison J. Hulme, Ph.D., to the role of Chief Operating Officer and Head of Research & Development.
Selected Financial Information
The Company reported net and comprehensive loss of $3.2 million ($0.03 per share) in the three months ended June 30, 2011 ("2011-Q2") compared to net income of $1.1 million ($0.01 per share) for the three months ended June 30, 2010 ("2010-Q2"). On a year-to-date basis, the company recorded a loss of $5.4 million ($0.04 per share) for the six months ended June 30, 2011 compared to a loss of $544,000 ($0.00 per share) for the six months ended June 30, 2010. The increase in net loss was caused by the receipt in June 2010 of $2.9 million of license revenue - the only such revenue earned to date - as well as an increase in total expenses of $1.6 million for the three month comparative periods ($2.1 million for the six month comparative periods) as a result of increased research and development activities associated with regulatory and drug manufacturing, and the costs of transitioning our operations to California.
Research and development ("R&D") costs were $1.6 million for the three months ended June 30, 2011 - an increase of $681,000 from $925,000 for 2010-Q2. R&D expenditures for the six months ended June 30, 2011 were $2.9 million compared to $2.0 million for the comparative period in 2010 - an increase of $900,000. These increases were driven largely by the increased activities within the first half of 2011 relating to the preparation of the BPH IND application to the FDA as well as to the CMC (Chemistry, Manufacturing and Controls) program for the manufacture and testing of new clinical batches of PRX302 drug supply. Although offset by a decrease in spending relating to active clinical trials, the IND and CMC projects drove the increased R&D costs incurred in 2011. In addition, costs of $128,000 were incurred in 2011-Q2 relating to the transition of operations to California, including severance and wind-down of office and laboratory operations in Vancouver. With the Warburg Pincus and Oxford financing secured, the Company will initiate additional BPH clinical activities and as such, development costs associated with clinical trials, drug manufacturing and regulatory activities are expected to increase through 2011 and 2012.
General and administrative costs for the three months ended June 30 2011 were $1.6 million - an increase of $725,000 over the previous quarter and an increase of $900,000 compared to the same period in 2010. On a year-to-date basis, G&A expenditures were $2.5 million for the six months ended June 30, 2011 and $1.3 for the comparative period in 2010. General and administrative costs for the three months ended June 30, 2011 included $900,000 in costs associated with transitioning operations from Vancouver to La Jolla, including severance and wind-down of operations in Vancouver and the initiation of operations in La Jolla. In addition, general and administrative costs vary from period to period depending on the specific business development, market research and shareholder relations initiatives undertaken and related travel required at such time to support the Company's corporate objectives. The relocation of operations to La Jolla, California and infrastructure costs associated with our increasing development activities are expected to result in increased levels of general and administrative expenses for the remainder of 2011 and 2012.
At June 30, 2011, the Company had cash and cash equivalents of $6.8 million, representing a net decrease of $5.5 million from December 31, 2010. The Company had working capital of $6.1 million at June 30, 2011, a decrease of $4.6 million from December 31, 2010.
As of August 10, 2011, the Company has 122,126,537 common shares issued and outstanding and 22,781,505 common share purchase warrants outstanding which expire between March 2015 and July 2018 and entitle warrant holders to purchase common shares at a prices ranging between $0.50 and $0.65. The weighted average warrant price is $0.54 and the weighted average remaining term is 4.4 years.
The Company has 9,090,167 options outstanding to purchase common shares of the Company. Of the options currently outstanding, approximately 5.8 million are exercisable into an equivalent number of common shares of the Company at exercise prices ranging from $0.56 to $0.90 and with an average exercise price of $0.64.
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