TORONTO, Jan. 25 /CNW/ - NeuroMedix Inc. ("NeuroMedix" or the "Company") (TSXV: NMX) today announced its financial results for the fiscal year ended September 30, 2006.
During the year ended September 30, 2006, NeuroMedix:
- Completed maximum tolerated dose ("MTD") studies in two species of
animals for Minozac;
- Manufactured at the kilogram level its first cGMP (current Good
Manufacturing Practice) batch of Minozac;
- Demonstrated that Minozac reduces brain proinflammatory cytokine
production and loss of cognitive function in an animal model of
traumatic brain injury ("TBI");
- Created a Medical and Scientific Advisory Board ("MSAB") panel of
experts to help guide the clinical development of Minozac, its lead
drug candidate for Alzheimer's disease ("Alzheimer's") and related
neurological disorders;
- Completed our initial public offering ("IPO") which resulted in gross
proceeds of $3,300,000, including the exercise of an over-allotment
option, and net proceeds of $2,746,618;
- Commenced trading on the TSX Venture Exchange under the symbol, "NMX";
and
- Strengthened our management team.
Subsequent to September 30, 2006, NeuroMedix announced that based on the positive pre-clinical development data received to date for its lead product, Minozac, it will now seek partners or acquirers with the financial resources to further advance the clinical development of Minozac with a view to ensuring Minozac's rapid development and maximizing shareholder value.
Since our IPO in January 2006, we have been focused on preparing Minozac for a Phase I clinical trial as well as expanding the indications of use. Commercial process development has been completed with a Swiss-based chemical manufacturing organization producing kilogram levels of cGMP Minozac meeting the specifications for clinical trials. We have completed maximum tolerated dose studies in two species of animals and expect to complete longer-term toxicology studies in the near term. In May 2006, NeuroMedix announced data for its first additional indication, TBI, demonstrating that Minozac is effective in reducing brain inflammation in mice suffering TBI and in preventing the cognitive deficit that generally results from such injury.
As we complete the final stages of our pre-clinical development program and prepare towards the submission of our Phase I safety application to the regulatory authorities, our Board of Directors has directed management to seek strategic alliances with pharmaceutical and biotechnology partners and to explore merger and acquisition transactions. We are currently seeking partners or acquirers with the financial resources to further advance the clinical development of Minozac in a bid to ensure Minozac's rapid development to benefit patients with Alzheimer's and other neuroinflammatory brain indications. Our Board has assessed Minozac's commercial potential in several large markets, including the treatment of Alzheimer's, and believes this path will maximize value to NeuroMedix shareholders.
Financial Review
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For the year ended September 30, 2006, NeuroMedix recorded a net loss of $2,143,615 ($0.08 per common and Class B share) compared to $462,408 ($0.04 per common and Class B share) for the period from incorporation on February 11, 2005 to September 30, 2005. This increase in net loss is primarily due to an increase in costs associated with manufacturing, pre-clinical toxicology studies, research contracts, intellectual property development, consulting expenses, employee expenses and general administrative costs.
Research and development expenses were $1,688,304 for the year ended September 30, 2006 compared to $407,782 for the period from incorporation to September 30, 2005. The increase was primarily the result of an increase in fees paid to external service providers for items such as research, research management, manufacturing, pre-clinical toxicology studies and intellectual property as well as an increase in internal employee expenses.
General and administrative expenses were $493,329 for the year ended September 30, 2006 compared to $54,738 for the period from incorporation to September 30, 2005. The increase was primarily the result of an increase in payroll, legal, accounting, tax, and consulting fees, board compensation, regulatory and reporting costs and general office expenses.
On January 24, 2006, under the terms of an agency agreement, NeuroMedix issued 13,200,000 common shares, including the exercise of the over-allotment option (the "Offering"), at a price per share of $0.25 for gross proceeds of $3,300,000. The net proceeds of this Offering were $2,746,618, net of issue expenses and agent's commissions of $553,382. NeuroMedix believes that it has adequate financial resources to meet anticipated expenditures until the end of the first quarter of calendar 2007.
As a result of a lack of toxicity at much higher than therapeutic doses, the Company has been required to produce more cGMP material to determine a maximum tolerated dose to meet FDA requirements than was anticipated at its IPO in January. In addition, the number of pre-clinical toxicity studies required by the FDA is greater than anticipated. As a result of both of these issues, the Company now anticipates that the funds raised in its IPO will not be sufficient to complete the planned Phase I clinical studies. The Company is currently addressing the need for additional funds to complete manufacturing, pre-clinical toxicology studies and a Phase I clinical trial. The Company is also currently exploring licensing or acquisition transactions with a view to maximizing shareholder value. The Company hopes to secure this funding or complete a transaction in the first quarter of calendar 2007.
About NeuroMedix:
NeuroMedix is a biotechnology company focused on the development of therapeutic agents for the treatment of degenerative and inflammatory diseases of the central nervous system, such as Alzheimer's disease, traumatic brain injury, neuropathic pain, age-related macular degeneration and multiple sclerosis. Our therapeutic drug candidates are based on research from a team of leading experts in the field of neuroinflammation at Northwestern University and have been demonstrated to reduce brain inflammation, to protect neuronal cells, and to prevent the loss of cognitive function in an Alzheimer's disease animal model in mice. Our lead candidate, Minozac has also been shown to reduce inflammation and prevent loss of cognitive function in mice suffering traumatic brain injury. Based on these findings, NeuroMedix is pursuing the development of its lead compound for Alzheimer's disease and traumatic brain injury in humans. NeuroMedix's shares are listed on the TSX Venture Exchange under the symbol "NMX".
Financial Information to follow:
NeuroMedix Inc.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
September 30, September 30,
2006 2005
$ $
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ASSETS
Current
Cash and cash equivalents 971,382 18,099
Receivables 29,491 4,611
Deposits on collaborations 6,860 26,051
Deferred financing costs - 17,625
Prepaid expenses 21,778 12,500
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Total current assets 1,029,511 78,886
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Equipment, net 10,513 2,451
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1,040,024 81,337
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 378,960 51,776
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Total liabilities 378,960 51,776
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Shareholders' equity
Share capital
Common shares 2,746,619 1
Class B shares 491,968 491,968
Contributed surplus 28,500 -
Deficit (2,606,023) (462,408)
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Total shareholders' equity 661,064 29,561
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1,040,024 81,337
Commitments
Guarantees
Subsequent events
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NeuroMedix Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
Period from
February 11,
Year ended to Cumulative
September 30, September 30, from
2006 2005 Inception
$ $ $
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EXPENSES
Research and development 1,688,304 407,782 2,096,086
General and administrative 493,329 54,738 548,067
Interest expense 1,133 - 1,133
Foreign exchange gain (4,531) - (4,531)
Amortization 2,288 259 2,547
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2,180,523 462,779 2,643,302
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Loss before the following (2,180,523) (462,779) (2,643,302)
Interest income 38,965 371 39,336
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Loss before income taxes (2,141,558) (462,408) (2,603,966)
Income taxes:
Current 2,057 - 2,057
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Net loss for the period (2,143,615) (462,408) (2,606,023)
Deficit, beginning of period (462,408) - -
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Deficit, end of period (2,606,023) (462,408) (2,606,023)
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Basic and diluted net loss
per common and Class B
share (0.08) (0.04)
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Weighted average common and
Class B shares outstanding 26,091,096 13,170,690
NeuroMedix Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period from
February 11,
Year ended to Cumulative
September 30, September 30, from
2006 2005 Inception
$ $ $
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OPERATING ACTIVITIES
Net loss for the period (2,143,615) (462,408) (2,606,023)
Add items not involving cash
Amortization 2,288 259 2,547
Stock-based compensation
expense 28,500 - 28,500
Write-off of receivable 8,153 - 8,153
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(2,104,674) (462,149) (2,566,823)
Changes in non-cash working
capital items 321,689 (9,011) 312,678
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Cash used in operating
activities (1,782,985) (471,160) (2,254,145)
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INVESTING ACTIVITIES
Purchase of equipment (10,350) (2,710) (13,060)
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Cash used in investing
activities (10,350) (2,710) (13,060)
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FINANCING ACTIVITIES
Proceeds from issuance of
common shares, net 2,746,618 1 2,746,619
Proceeds from issuance of
Class B shares, net - 491,968 491,968
Increase in promissory note 51,133 - 51,133
Repayment of promissory note (51,133) - (51,133)
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Cash provided by financing
activities 2,746,618 491,969 3,238,587
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Net increase in cash during
the period 953,283 18,099 971,382
Cash, beginning of period 18,099 - -
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Cash, end of period 971,382 18,099 971,382
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The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may include but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.
%SEDAR: 00022976E
