Thallion Pharmaceuticals Inc. has announced its operational and financial results for the three-month and twelve-month periods ended November 30, 2010.
Fourth Quarter Operational Highlights
• Successfully initiated patient enrollment for SHIGATEC, a Phase II trial evaluating Shigamabs® as a treatment for E. coli infection, in South America.
• Completed the manufacturing and release of new lots of clinical grade material necessary for the conduct of the SHIGATEC trial.
• Relocated the company to its new corporate headquarters in Dorval, Quebec.
2010 Operational Highlights
• Signed a definitive development and commercialization agreement with LFB Biotechnologies (LFB) for Shigamabs®, under which Thallion is eligible to receive up to €95 million from LFB. The funding included an upfront licensing fee of €1.5 million, funding for substantially all future clinical development costs, as well as potential milestone payments. The agreement grants LFB an exclusive license for the commercial rights to Shigamabs® in Europe, South America and other territories of strategic interest to LFB, including Russia, Turkey, China, South Korea and Northern African countries, while Thallion retains the rights for North America and the rest of world. Thallion is eligible to receive tiered, double digit royalties based on product sales in the LFB territories.
• Obtained regulatory approvals in Argentina, Chile and Peru to conduct the SHIGATEC Phase II trial.
• Activated the SHIGATEC trial on November 26, 2010 and recruited its first patient on November 29, 2010.
• Expanded IP coverage for Shigamabs®, including patents issued in select European countries and Japan, covering Shigamabs® pharmaceutical compositions.
• Discontinued its Phase II trial evaluating TLN-4601 as a treatment for glioblastoma multiforme (GBM) due to a lack of measurable efficacy after analysis of the interim data.
• Received notification from the Secretariat of the International Chamber of Commerce International Court of Arbitration that the Arbitral Tribunal had rendered a partial award in favour of the licensor of TLN-232 and also established that the license agreement was duly terminated by the licensor. As a result, Thallion terminated the TLN-232 development program, and all rights related to the license agreement and licensor materials have been returned to the licensor.
• Entered into a binding lease cancellation agreement with the landlord of its corporate headquarters to cancel the remaining six years of its fifteen-year lease obligation, eliminating a remaining commitment of approximately $8,000,000, for total consideration paid by Thallion of $2,400,000.
• Signed a binding lease cancellation agreement related to its redundant facility for a one-time cash payment of $1.15 million.
"2010 was a year of great achievement for Thallion. Since we signed the Shigamabs® partnership with LFB in February, we successfully obtained all the elements required to initiate the SHIGATEC Phase II trial on time to benefit from the high incidence STEC infection season in South America. Furthermore, we had taken a series of steps to streamline our operations and reduce costs to become a leaner, more focused company. With a solid balance sheet, a strong partner and data expected later this year, we are in a great position to execute our clinical plan and business strategies in 2011," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals Inc.
Mandelzys continued, "Our SHIGATEC trial in South America is well underway and we have already completed enrollment of the 21 patients for the low dose cohort. Following a review by an Independent Data Monitoring Committee to assess Shigamabs® safety, we anticipate the initiation of the high dose cohort (21 patients) in the second quarter of 2011 and expect top line data from the core portion of the trial in the fourth quarter of calendar 2011."
Collaboration and licensing revenues for the three-month period ended November 30, 2010 were $1,513,550 compared to nil for the corresponding period in 2009. Collaboration and licensing revenues for the twelve-month period ended November 30, 2010 were $3,843,654 compared to nil for the same period last year. Revenue recognized in 2010 was related to the development and license agreement signed with LFB in February 2010 for the Company's ongoing development of Shigamabs®.
Research and development (R&D) expenses before tax credits for the three-month period ended November 30, 2010 were $1,941,406 compared with $946,910 for the three-month period ended November 30, 2009. The change is attributable to greater R&D activity related to the development of Shigamabs® as the Company prepared for the initiation of its Phase II study in November 2010, partially offset by reduced personnel costs related to restructuring of the Company's research activities in the fourth quarter of 2009.
Research and development expenses for the twelve-month period ended November 30, 2010 were $5,516,648 compared with $6,452,562 for the corresponding period in 2009. The change in fiscal 2010 is primarily due to suspension of the development activities of TLN-232 and TLN-4601 in July 2009 and December 2009, respectively, partially offset by greater R&D activity related to the development of Shigamabs®.
General and administrative (G&A) expenses for the three-month period ended November 30, 2010 were $903,026 compared with $969,897 for the corresponding period last year. General and administrative expenses for the twelve-month period ended November 30, 2010 were $4,204,104 compared with $4,185,161 for the corresponding period last year.
In 2010, a total of $305,000 in one-time cash incentive bonuses were paid to certain employees pursuant to the execution of the definitive development and license agreement signed with LFB in February 2010, in addition to recording one-time severance costs amounting to $296,137. When excluding these one-time costs, G&A expenses amounted to $3,602,967 in the year ended November 30, 2010 reflecting a 14% decrease which is consistent with the reduction in G&A employees, as well as significant cost reduction efforts undertaken by the Company in 2010.
The net loss for the three-month period ended November 30, 2010 was $1,128,252 or $0.04 per share compared to $4,685,447 or $0.15 per share for the three-month period ended November 30, 2009. The net loss for the twelve-month period ended November 30, 2010 was $4,880,232 or $0.15 per share compared to $13,948,305 or $0.43 per share for the corresponding period in 2009. The changes in net loss were mainly attributable to collaboration and licensing revenues beginning in 2010, as well as reductions in R&D expenses, lease exit costs, stock-based compensation expenses and the write-off of capital assets, partially offset by the 2009 gain on the settlement of note receivable with Caprion Proteomics Inc.
As at November 30, 2010, the Company's unrestricted cash position amounted to $10,254,781, which consists of cash and short-term investments. The Company's liquidity availability amounted to $10,981,096 compared with $9,073,557 on November 30, 2009. The increase in liquidity is primarily due to the up-front and clinical development funding received from LFB following execution of the development and license agreement signed in February 2010, the collection of the note receivable from Caprion Proteomics Inc. and the collection of investment tax credits receivable, partially offset by the final settlement of the Company's lease obligations related to a redundant facility and its corporate headquarters.
As of February 24, 2011, the Company had 32,194,566 common shares outstanding. The number of options and common share purchase warrants outstanding on February 24, 2011, were 2,875,975 and 530,000 respectively.