Exhibit 99.1
News release via Canada NewsWire, Toronto 416-863-9350
Attention Business/Financial Editors:
Lorus Therapeutics Reports Year End Results for Fiscal Year 2007
TORONTO, Aug. 13 /CNW/ - Lorus Therapeutics Inc. (Lorus), a
biopharmaceutical company specializing in the research and development of
pharmaceutical products and technologies for the management of cancer, today
reported financial results for the year ended May 31, 2007. Unless specified
otherwise, all amounts are in Canadian dollars.
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YEAR 2007 AND CURRENT HIGHLIGHTS
- Initiated a plan for a new clinical investigation of GTI-2040 as a
single-agent in patients with high-grade myelodysplastic syndrome
(MDS). The clinical study is sponsored by the US National Cancer
Institute.
- Announced that Dr. Jim A. Wright would step down as the President and
Chief Executive Officer of the Company on September 21, 2006 and that
Dr. Aiping H. Young would succeed him in that position.
- Completed a transaction with HighTech Beteiligungen GmbH & Co. KG
issuing 28.8 million common shares at $0.36 per share for gross
proceeds of $10.4 million. HighTech is a leading European venture
capital fund focused exclusively on providing financial support for
the development of innovative products based upon applied
technologies and life sciences.
- Completed a transaction with Technifund Inc. to issue on a private
placement basis, 5 million common shares at $0.36 per share for gross
proceeds of $1.8 million.
- The Company was allowed a patent from the United States Patent and
Trademark Office for antisense oligonucleotides directed towards the
novel cancer target neuropilin.
- Announced publication of scientific data obtained from a preclinical
study demonstrating the antitumor activity of its lead small
interfering RNA (siRNA) candidate, siRNA 1284, indicating that, among
other things, siRNA 1284 significantly decreases the expression of
the R2 subunit of ribonucleotide reductase in a range of human tumor
cell lines in vitro. This article marked Lorus' first major
publication of detailed scientific findings for research in the area
of RNA interference and siRNA technology.
- Announced that the company had successfully completed a
reorganization agreement resulting in non-dilutive funding of
approximately $8.5 million on closing of the transaction less an
escrowed amount of $600,000, subject to certain post-closing
adjustments and before transaction costs.
- The Company announced the appointment of Herb Abramson to the Board
of Directors bringing to the company a wealth of capital markets
experience.
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FINANCIAL RESULTS
Note re: the financial statement information below:
On July 10, 2007 (the "Arrangement Date"), the Company completed a plan
of arrangement and corporate reorganization with among others 4325231 Canada
Inc. (formerly Lorus Therapeutics Inc.) ("Old Lorus"), 6707157 Canada Inc. and
Pinnacle International Lands Inc. As a result of the plan of arrangement and
reorganization, among other things, each common share of Old Lorus was
exchanged for one common share of the Company and the assets (excluding
certain future tax assets and related valuation allowance) and liabilities of
Old Lorus were transferred to the Company and/or its subsidiaries. The Company
continued the business of Old Lorus after the Arrangement Date with the same
officers and employees and continued to be governed by the same Board of
Directors as Old Lorus prior to the Arrangement Date. Therefore, the Company's
operations have been accounted for on a continuity of interest basis and
accordingly, the consolidated financial statement information below reflect
that of the Company as if it had always carried on the business formerly
carried on by Old Lorus.
Net loss for the three months ended May 31, 2007 decreased 43% to
$1.7 million ($0.01 per share) compared with $3.0 million ($0.02 per share)
for the three months ended May 31, 2006. Net loss for the year ended May 31,
2007 decreased 46% to $9.6 million ($0.05 per share) compared to a loss of
$17.9 million ($0.10 per share) in the prior year. The significant decrease
for the three-month period ended May 31, 2007 is primarily due to lower
research and development costs of $1.1 million, lower depreciation and
amortization expense resulting primarily from a write down in asset value of
$250 thousand in the three month period ending May 31, 2006 and increased
interest revenue of $61 thousand, offset by higher general and administrative
expenses of $89 thousand. The decrease in net loss for the year is due
primarily to lower research and development costs resulting from the close of
the Virulizin Phase III clinical trial, and staff reductions in November 2005.
As a result of the changes made in 2006, the company continues to experience
lower general and administrative costs, lower legal, consulting and investor
relations charges, lower stock based compensation, and lower depreciation and
amortization. Higher interest revenue was correspondingly offset by higher
interest expense.
Cash used in operating activities before net change in non-cash working
capital decreased 43% to $900 thousand for the three-month period ended May
31, 2007, compared with $1.6 million in the prior year period. The decrease
for the three-month period is due to continued lower research and development
expenditures over the previous year. For the year ended May 31, 2007, cash
used in operating activities before net change in non-cash working capital
decreased 53% to $5.9 million compared to $12.6 million in the prior year. The
decrease in our cash burn rate for the twelve month period is due primarily to
lower research and development expenditures due to the close of our Phase III
clinical trial of Virulizin(R) as well as lower general and administrative
expenditures as described above.
Research and development expenses for the three months ended May 31, 2007
decreased 81% to $258 thousand compared with $1.4 million for the three months
ended May 31, 2006. For the year ended May 31, 2007, research and development
expenses decreased to $3.4 million compared to $10.2 million in 2006,
representing a 67% decrease over the prior year. The decrease in spending
compared with the prior periods is due to the close of Lorus' Virulizin(R)
Phase III clinical trials during 2006 and the corresponding reduction in
headcount during the second quarter of 2006. During the current year, most of
its Phase II clinical trial costs, primarily GTI-2040 projects, are being
leveraged through the NCI which covers the cost of the trials.
General and administrative costs for the three months ended May 31, 2007
increased 12% to $819 thousand in the quarter compared with $730 thousand for
the same period in 2006; overall however, general and administrative costs
decreased for the year ended May 31, 2007 by approximately $500 thousand to
$3.8 million from $4.3 million. This decrease is primarily due to the
reduction in headcount described above as well as lower patent, consulting and
investor relation costs resulting from changes made to reduce Lorus' ongoing
costs offset by severance costs paid to Jim Wright as part of the mutual
separation agreement entered into in September, 2006.
Interest income for the three months ended May 31, 2007 increased to $140
thousand compared with $79 thousand for the three months ended May 31, 2006.
For the year ended May 31, 2007, interest income was $503 thousand, compared
with $374 thousand in the prior year. The increase from 2006 to 2007 is a
function of both higher average cash and marketable securities balances in
2007 and higher interest rates during the year.
At May 31, 2007, Lorus had cash and cash equivalents and marketable
securities totaling $12.4 million compared to $8.3 million at May 31, 2006. As
a result of the corporate reorganization described above, the company expects
that, subject to the post closing adjustments, net proceeds of the transaction
will be approximately $7 million inclusive of the amount held in escrow to be
received in July 2008.
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Lorus Therapeutics Inc.
Consolidated Statements of Loss
(unaudited)
Three Three
months months
(amounts in 000's except for ended ended Years Ended May 31
per common share data) May 31, May 31, --------------------
(Canadian Dollars) 2007 2006 2007 2006
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REVENUE $ 40 $ 14 $ 107 $ 26
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EXPENSES
Cost of sales 4 1 16 3
Research and development 258 1,353 3,384 10,237
General and administrative 819 730 3,848 4,334
Stock-based compensation 134 100 503 1,205
Depreciation and amortization 105 380 402 771
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Operating expenses 1,320 2,564 8,153 16,550
Interest expense 265 251 1,050 882
Accretion in carrying value of
secured convertible debentures 253 221 935 790
Amortization of deferred
financing charges 30 25 110 87
Interest income (140) (79) (503) (374)
-------------------------------------------------------------------------
Loss for the period 1,688 2,968 9,638 17,909
-------------------------------------------------------------------------
Basic and diluted loss per
common share $ 0.01 $ 0.02 $ 0.05 $ 0.10
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
common shares outstanding used
in the calculation of basic
and diluted loss per share 211,933 174,460 204,860 172,112
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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As Lorus is holding its Annual General Meeting of the shareholders on
September 19, 2007, we will not hold a conference call to discuss the
operating results of the year-end. Lorus always welcomes the shareholders, the
financial community and the general public to contact us at any time.
About Lorus
Lorus is a biopharmaceutical company focused on the research and
development of novel therapeutics in cancer. Lorus' goal is to capitalize on
its research, preclinical, clinical and regulatory expertise by developing new
drug candidates that can be used, either alone, or in combination with other
drugs, to successfully manage cancer. Through its own discovery efforts and an
acquisition and in-licensing program, Lorus is building a portfolio of
promising anticancer drugs. Lorus has completed one Phase II and one Phase III
clinical trial. Lorus Therapeutics Inc. is listed on the Toronto Stock
Exchange under the symbol LOR, and on the American Stock Exchange under the
symbol LRP.
Forward Looking Statements
This press release contains forward-looking statements within the meaning
of Canadian and U.S. securities laws. Such statements include, but are not
limited to, statements relating to: financings and corporate reorganizations,
the establishment of corporate alliances, the Company's plans, objectives,
expectations and intentions and other statements including words such as
"continue", "expect", "intend", "will", "should", "would", "may", and other
similar expressions. Such statements reflect our current views with respect to
future events and are subject to risks and uncertainties and are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by us are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Many
factors could cause our actual results, performance, achievements or the
transactions described in this press release to be materially different from
any future results, performance, achievements transactions described in this
press release, if at all, that may be expressed or implied by such
forward-looking statements, including, among others: the progress of
negotiations; our ability to obtain regulatory, securityholder and other
approvals; our ability to obtain the capital required for research and
operations; the inherent risks in early stage drug development including
demonstrating efficacy; development time/cost and the regulatory approval
process; the progress of our clinical trials; our ability to find and enter
into agreements with potential partners; our ability to attract and retain key
personnel; changing market conditions; and other risks detailed from
time-to-time in our ongoing quarterly filings, annual information forms,
annual reports and annual filings with Canadian securities regulators and the
United States Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize, or should
the assumptions set out in the section entitled "Risk Factors" in our filings
with Canadian securities regulators and the United States Securities and
Exchange Commission underlying those forward-looking statements prove
incorrect, actual results may vary materially from those described herein.
These forward-looking statements are made as of the date of this press release
and we do not intend, and do not assume any obligation, to update these
forward-looking statements, except as required by law. We cannot assure you
that such statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such statements.
Investors are cautioned that forward-looking statements are not guarantees of
future performance and accordingly investors are cautioned not to put undue
reliance on forward-looking statements due to the inherent uncertainty
therein.
Lorus Therapeutics Inc.'s recent press releases are available through its
website at www.lorusthera.com. For Lorus' regulatory filings on SEDAR, please
go to Sedar.com. For SEDAR filings prior to July 10, 2007 you will find these
under the company profile for 4325231 Canada Inc.
%SEDAR: 00025614EF %CIK: 0000882361
/For further information: Lorus Therapeutics Inc., Dr. Saeid Babaei,
(416) 798-1200 ext. 490, ir(at)lorusthera.com/
(LOR. LRP)
CO: Lorus Therapeutics Inc.
CNW 19:39e 13-AUG-07