News release via Canada NewsWire, Toronto 416-863-9350
Attention Business/Financial Editors:
Lorus Therapeutics reports first quarter results for fiscal year 2008
TORONTO, Oct. 15 /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 three months ended August 31, 2007. Unless
specified otherwise, all amounts are in Canadian dollars.
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FIRST QUARTER HIGHLIGHTS:
During the first quarter, the Company announced the following:
- It had begun enrollment in a new clinical trial to determine the
pharmacodynamic and pharmacokinetic effects, dose-response
relationships and tolerability of GTI-2040 in patients with acute
leukemia and myelodysplastic syndrome.
- It had completed a proof of concept trial in Acute Myeloid
Leukemia ("AML")and the expansion of its GTI-2040 development
program in this indication with the initiation of a more advanced
Phase II clinical trial with GTI-2040 and high dose Ara-C in
patients with refractory and relapsed AML
- It added four new members to its board of directors (replacing
three previous directors that did not stand for re-election at the
Company's annual general meeting) and that Denis Burger, co-
founder and former Chairman of Trinity Biotech plc, and past
Chairman, CEO and director of AVI Biopharma Inc. would be the new
Chairman of the Board of Directors for the Company;
- It completed a plan of arrangement and corporate reorganization
that resulted in gross proceeds of $8.5 million subject to a post
closing adjustment and an escrow amount of $600 thousand. The
company estimates net proceeds from this non-dilutive financing
will be approximately $7.0 million
>>
"I am very encouraged by the achievements we made in this quarter, we
focused our product profile and strengthened our board and financial
position," said Dr. Aiping Young, president and CEO of Lorus. "I am pleased to
be working with a Lorus team that is very focused on making scientific and
corporate advancements all with the aim of enhancing shareholder value."
FINANCIAL RESULTS
Operating net loss for the period, before the gain on sale of shares
associated with the completion of the Arrangement decreased to 25% to
$2.1 million or $0.01 per share in the first three month ended August 31, 2007
compared to $2.8 million or $0.01 per share in the same period last year. The
decrease in net loss in 2007 compared with 2006 is primarily due to lower
research and development costs as discussed below.
As a result of the Arrangement, the Company recognized a gain on the sale
of the shares of Old Lorus to the Investor of approximately $6.1 million.
Under the Arrangement, numerous steps were undertaken as part of a taxable
reorganization. However, these steps did not result in any taxes payable as
the tax benefit of income tax attributes was applied to eliminate any taxes
otherwise payable. As a condition of the transaction, the Company provided Old
Lorus with certain indemnifications. In reference to those indemnifications,
$600 thousand of the proceeds on the transaction have been held in escrow
until the first anniversary of the transaction (July 2008). The Company has
deferred any gain on this escrow amount until they are released at which time
the fair value of the indemnity will be reassessed.
We utilized cash of $2.3 million in our operating activities in
three-month period ended August 31, 2007 compared with $1.8 million during the
same period in 2006;reflecting a reduction in of accounts payable and increase
in prepaid and other assets. At August 31, 2007, Lorus had cash and cash
equivalents and marketable securities/short term investments totaling
$17.1 million compared to $12.4 million at May 31, 2007. The increase in cash
is a result of the corporate reorganization described below.
Research and development expenses for the three months ended August 31,
2007 decreased 41% to $782 thousand compared with $1.3 million for the three
months ended August 31, 2006. The decrease in spending compared with 2006 is
due to reduced external research and testing costs in 2007 as compared to the
same period in 2006. In addition, the company incurred drug manufacturing
costs and amortization of acquired R&D costs in 2006 that were not incurred in
2007. The company continues to leverage its research and development
activities through the use of NCI sponsored trials.
General and administrative costs for the three months ended August 31,
2007 decreased 6% to $736 thousand in the quarter compared with $788 thousand
for the same period in 2006 The decrease in general and administrative costs
is the result of staff reductions, and a continued focus on lowering costs in
all areas of the business.
Interest income totaled $140 thousand in the three-month period ended
August 31, 2007 compared to $67 thousand in the same period last year. The
amount of Interest income in the current period has been offset by the a
$20 thousand loss in fair value on investments held-for-trading as a result of
the implementation on the new financial instruments accounting policy, see
Recently Adopted Accounting Policies, below. The overall increase interest
income in the current period is due to higher average cash and marketable
securities balances in the current three month period compared to the same
period in 2006 as well as higher interest rates. Higher average cash and
marketable securities balances were primarily a function of the funds received
as part to of the August 2006 private placements and the completion of the
Arrangement in July 2007.
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Lorus Therapeutics Inc.
Consolidated Statements of Loss and Deficit (unaudited)
Three Three
(amounts in Canadian 000's except Months ended Months ended
for per common share data) August 31, 2007 August 31, 2006
-------------------------------------------------------------------------
REVENUE $ 26 $ 7
-------------------------------------------------------------------------
EXPENSES
Cost of sales 1 3
Research and development 782 1,331
General and administrative 736 788
Stock-based compensation 103 113
Depreciation and amortization 79 100
-------------------------------------------------------------------------
Operating expenses 1,701 2,335
Interest expense on convertible
debentures 270 265
Accretion in carrying value of
convertible debentures 265 219
Amortization of deferred financing
charges 32 25
Interest income (140) (67)
-------------------------------------------------------------------------
Loss from operations for the period 2,103 2,770
-------------------------------------------------------------------------
Gain on sale of shares (6,094) -
-------------------------------------------------------------------------
Net (earnings)/loss for the period (3,991) 2,770
-------------------------------------------------------------------------
Basic and diluted (earnings)/loss per
common share $ ( 0.02) $ 0.01
-------------------------------------------------------------------------
Weighted average number of common
shares (in thousands) outstanding
used in the calculation of:
Basic (earnings) loss per share 213,057 186,529
Diluted (earnings) loss per share 227,266
-------------------------------------------------------------------------
>>
Note re the financial statement information above:
On July 10, 2007 (the "Arrangement Date"), the Company completed a plan
of arrangement and corporate reorganization with 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 above reflect
that of the Company as if it had always carried on the business formerly
carried on by Old Lorus.
Media, members of the financial community and shareholders are invited to
listen to the Company's quarterly earnings presentation through an audio web
cast on the Company's website at www.lorusthera.com on October 17, 2007.
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 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 or achievements to be
materially different from any future results, performance or achievements
described in this press release. Such expressed or implied forward looking
statements could include, among others: 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 www.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 18:42e 15-OCT-07