Lorus Therapeutics Inc. (Lorus) (TSX: LOR)(AMEX: LRP), 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, 2008. Unless specified otherwise, all
amounts are in Canadian dollars.
JUNE 1, 2008 TO DATE HIGHLIGHTS:
- Completed a rights offering to eligible shareholders raising
net proceeds of $3.2 million.
- Successfully completed GLP toxicology studies exploring a
novel route of administration for LOR-2040 when administered by
intravesical (or direct) administration into the bladder.
- Received Orphan Drug status for the treatment of Acute Myeloid
Leukemia by the Committee for Orphan Medicinal Products of the
European Medicines Agency.
- Received $600 thousand originally held in escrow in connection
with Lorus' corporate reorganization completed on July 10, 2007.
The Corporation has received total net proceeds of $6.9 million in
non-dilutive financing as part of this transaction.
- Announced the publications of two key scientific studies on
LOR-2040 by academic collaborators.
"We were pleased to start fiscal 2009 with success in both
product development and financing" said Dr. Aiping Young, President
and CEO of Lorus. "The successful toxicology results together with
our increased level of understanding for LOR-2040 and the funding
received from the rights offering allow us to further develop our
products."
FINANCIAL RESULTS
Our loss from operations for the three months ended August 31,
2008 increased to $2.7 million ($0.01 per share) compared to a net
loss of $2.1 million ($0.01 per share) during the same period in
fiscal 2008. During the quarter ended August 31, 2008 the Company
recorded a gain on sale of shares related to the Arrangement
(described below) of $450 thousand which reduced the net loss and
other comprehensive income to $2.2 million ($0.01 per share). On
the close of the Arrangement during the period ended August 31,
2007, the Company realized a gain on the sale of the shares of Old
Lorus (described below) in the amount of $6.1 million resulting in
Net earnings and other comprehensive income for the period of $4.0
million ($0.02 earnings per share). The increase in loss from
operations in the current three-month period as compared to the
previous year is primarily a result of higher research and
development costs of $396 thousand and higher general and
administrative expenses of $105 thousand.
For the three-month period ended August 31, 2008, research and
development expenditures increased by $396 thousand to $1.2 million
from $782 thousand in the prior year resulting from increased
activity within our LOR-2040 and Small Molecule programs. These
additional costs included the GLP-toxicology studies for both
LOR-253 (our lead small molecule drug candidate) and LOR-2040 in
bladder cancer, drug validation in preparation for LOR-253
manufacturing and LOR-2040 drug filling costs.
General and administrative expenses totaled $841 thousand in the
three-month period ended August 31, 2008 compared to $736 thousand
in same period last year. The slight increase in general and
administrative costs is the result of higher personnel and
consulting costs incurred within our business development
department as well as foreign exchange losses on our outstanding
accounts payable balances.
We utilized cash of $1.8 million in our operating activities in
three-month period ended August 31, 2008 compared with $2.3 million
during the same period in fiscal 2008. The decrease is primarily a
result of a reduction in accounts payable and an increase in
prepaid and other assets balances in 2007 offset by an increased
net loss for the quarter ended August 31, 2008. At August 31, 2008,
we had cash and cash equivalents and short-term investments of
$11.3 million compared to $9.4 million at May 31, 2008. Based on
our current plans and projections we believe that our current cash
and cash equivalents and short term investments will allow us to
continue to execute our research and development plans for more
than a year. The current cash position is not sufficient to satisfy
the obligation of the existing $15 million convertible debenture
that is due in October 2009. The Company is pursuing strategies to
address this obligation, which will be considered a current
liability effective October 6, 2008.
Lorus Therapeutics Inc.
Consolidated Statements of Loss (unaudited)
(amounts in 000's except for Three Three
per common share data) months ended months ended
(Canadian dollars) Aug. 31, 2008 Aug. 31, 2007
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REVENUE $ 3 $ 26
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EXPENSES
Cost of sales - 1
Research and development 1,178 782
General and administrative 841 736
Stock-based compensation 91 103
Depreciation and amortization of fixed assets 43 79
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Operating expenses 2,153 1,701
Interest expense on convertible debentures 217 270
Accretion in carrying value of convertible
debentures 377 298
Interest income (82) (140)
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Loss from operation for the period 2,662 2,103
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Gain on sale of shares (450) (6,094)
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Net loss (earnings) and other comprehensive
loss (income) for the period 2,212 (3,991)
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Basic and diluted loss (earnings) per common
share $ 0.01 $ (0.02)
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Weighted average number of common shares
outstanding used in the calculation of
Basic loss (earnings) per share 228,407 213,057
Diluted loss (earnings) per share 228,407 227,266
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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. that
resulted in net proceeds of $6.9 million (the "Arrangement"). 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.
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 continue as a going concern, our ability to repay or
refinance the convertible debentures by October 2009, 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 Global Summit Real Estate Inc. (Old Lorus).
Contacts: Lorus Therapeutics Inc. Elizabeth Williams (416)
798-1200 ext. 372 Email: ir@lorusthera.com Website:
www.lorusthera.com
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