ESSA reports net loss of $11.5 million for year ended September 30, 2015

Dec 15 2015

ESSA Pharma Inc. ("ESSA" or the "Company") (TSX: EPI, NASDAQ: EPIX) today reported financial results for the year ended September 30, 2015. Amounts, unless specified otherwise, are expressed in Canadian dollars and in accordance with International Financial Reporting Standards ("IFRS").

Fourth Quarter and 2015 Year Highlights and Corporate Update

FDA Approval to Commence Clinical Development

On September 23, 2015, the U.S. Food and Drug Administration approved ESSA's Investigational New Drug ("IND") application to initiate a Phase 1/2 clinical study on its novel agent, EPI-506, for the treatment of metastatic castration-resistant prostate cancer ("CRPC") in patients who have failed current therapies.

Health Canada Approval to Commence Clinical Development

On November 5, 2015, the Health Protection Branch ("HPB") of Health Canada has issued a 'no objection letter' for the Clinical Trial Authorization ("CTA") application that ESSA has submitted. The HPB letter will allow ESSA to include Canadian sites in its Phase 1/2 clinical study.

Enrolment of First Patient in Phase 1/2 Trial

On November 24, 2015, the Company enrolled its first patient in the Phase 1/2 clinical study.

Receipt of US$3.7m from the Cancer Prevention and Research Institute of Texas

The approval of the IND application triggered the receipt of an additional US$3.7 million of funding from the Cancer Prevention and Research Institute of Texas ("CPRIT"). Under ESSA's agreement with CPRIT, a total of US$12 million of grant funding (repayable out of potential product revenues) will be made available to the Company, of which US$2.8 million had previously been received.

Looking Forward

In its Phase 1/2 clinical trial, ESSA intends to demonstrate the safety, tolerability, maximum tolerated-dose, pharmacokinetics, and efficacy of EPI-506 in treating prostate cancer patients who have failed abiraterone or enzalutamide or both, the current standard-of-care drugs in metastatic CRPC. The trial is expected to enrol approximately 150 subjects.

Summary Results

ESSA recorded a net loss of $11.5 million ($0.63 per common share) for the year ended September 30, 2015, compared to a net loss of $2.0 million ($0.13 per common share) for the year ended September 30, 2014. The net income for the fourth quarter of 2015 was $0.1 million compared to a net loss of $1.6 million for the fourth quarter of 2014. Recoveries from the CPRIT grant resulted in a net income for the fourth quarter of 2015 in addition to foreign exchange adjustments on the Company's U.S. dollars.

Research and Development ("R&D") expenditures for the year were $5.9 million compared to $0.7 million for 2014. The increase was primarily due to increased R&D activity related to preclinical work on the clinical candidate EPI-506 in support of the IND to the U.S. FDA and CTA application in Canada for the HPB. The Company recognized a recovery on R&D expenditures in the fourth quarter of 2015 of $1.0 million compared to expenditures of $0.5 million in the fourth quarter of 2014. The recovery in the fourth quarter of 2015 resulted from the timing of recoveries under the CPRIT grant.

General and administration expenditures for the year 2015 were $6.5 million compared to $1.2 million for the year 2014. General and administration expenditures for the fourth quarter of 2015 were $2.8 million compared to $1.0 million for the fourth quarter of 2014. The increase was primarily due to increased activity as a corporate entity as the Company successfully completed a listing on the TSX Venture Exchange in January 2015, a listing on the Nasdaq Capital Market (the "Nasdaq") in July 2015, and graduation to the TSX in July 2015.

Liquidity and Outstanding Share Capital

Working capital as at September 30, 2015 was $6.7 million, which included the subsequent receipt of US$3.7 million from CPRIT following clearance of the IND with the FDA in September 2015, a significant milestone. Management has forecasted that the Company's working capital will not be sufficient to execute its planned expenditures for the coming year (see "Note 1" of the Company's consolidated financial statements). Accordingly the Company recognizes that additional funding will be required to continue operations. Management continues to seek sources of additional financing which would assure continuation of the Company's operations and research programs, however, there is no certainty that such financing will be provided or provided on favourable terms. The Company believes that it will complete one or more of these arrangements in sufficient time to continue to execute its planned expenditures without interruption.

As of September 30, 2015, the Company had 22,629,271 common shares issued and outstanding, 3,473,519 common shares issuable upon the exercise of outstanding stock options at a weighted-average exercise price of $1.91 per share, and 282,489 common shares issuable upon the exercise of outstanding warrants at a weighted-average exercise price of $3.52 per share.