TORONTO, Feb. 27 /CNW/ - NeuroMedix Inc. ("NeuroMedix" or the "Company") (TSXV: NMX) today announced its financial results for the quarter ended December 31, 2006.
During the three-month period ended December 31, 2006, NeuroMedix, based on the positive pre-clinical development data received to date for its lead product, Minozac, began to 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. NeuroMedix also continued to prepare Minozac for a Phase I clinical safety trial in healthy volunteers.
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.
Our next steps are to complete longer-term toxicology studies, which we expect to do in the near term, and assuming additional funds are available, file an investigational new drug application and initiate a Phase I clinical trial to assess Minozac's safety in healthy volunteers.
Financial Review
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For the three-month period ended December 31, 2006, the Company recorded a net loss of $1,030,107 ($0.03 per common and Class B share) compared to $212,047 ($0.01 per common and Class B share) for the three-month period ended December 31, 2005. This increase is primarily due to an increase in costs associated with manufacturing, pre-clinical toxicology studies, consulting expenses, employee expenses and general administrative costs.
Research and development expenses were $808,528 for the three-month period ended December 31, 2006 compared to $119,377 for the three-month period ended December 31, 2005. The increase was primarily the result of an increase in fees paid to external service providers for consulting, manufacturing and pre-clinical toxicology studies as well as an increase in internal employee expenses.
General and administrative expenses were $224,108 for the three-month period ended December 31, 2006 compared to $91,794 for the three-month period ended December 31, 2005. The increase was primarily the result of an increase in payroll, board compensation and general office expenses.
As at December 31, 2006, the Company had cash and cash equivalents and a net working capital deficit of $445,995 and $367,330, respectively. The Company currently believes that it has adequate financial resources to meet anticipated expenditures until the middle of the second quarter of calendar 2007. 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 sale transactions with a view to maximizing shareholder value. The Company hopes to secure this funding or a transaction in the first quarter of calendar 2007, but there is no assurance that additional funding or a transaction will be completed on acceptable terms, if at all.
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
(Unaudited)
December 31, September 30,
2006 2006
$ $
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ASSETS
Current
Cash and cash equivalents 445,995 971,382
Receivables 29,778 29,491
Deposits on collaborations - 6,860
Prepaid expenses 27,227 21,778
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Total current assets 503,000 1,029,511
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Equipment, net 9,725 10,513
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512,725 1,040,024
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LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current
Accounts payable and accrued liabilities 870,330 378,960
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Total liabilities 870,330 378,960
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Shareholders' equity (deficiency)
Share capital
Common shares 2,746,619 2,746,619
Class B shares 491,968 491,968
Contributed surplus 39,938 28,500
Deficit (3,636,130) (2,606,023)
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Total shareholders' equity (deficiency) (357,605) 661,064
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512,725 1,040,024
Commitments
Guarantees
Subsequent events
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NeuroMedix Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF LOSS, COMPREHENSIVE LOSS AND DEFICIT
(Unaudited)
Three-month Three-month
period ended period ended Cumulative
December 31, December 31, from
2006 2005 inception
$ $ $
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EXPENSES
Research and development 808,528 119,377 2,904,614
General and administrative 224,108 91,794 772,175
Interest expense - 586 1,133
Foreign exchange loss (gain) 2,197 (215) (2,334)
Amortization 788 507 3,335
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1,035,621 212,049 3,678,923
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Loss before the following (1,035,621) (212,049) (3,678,923)
Interest income 5,514 2 44,850
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Loss before income taxes (1,030,107) (212,047) (3,634,073)
Income taxes:
Current - - 2,057
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Net loss and comprehensive loss
for the period (1,030,107) (212,047) (3,636,130)
Deficit, beginning of period (2,606,023) (462,408) -
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Deficit, end of period (3,636,130) (674,455) (3,636,130)
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Basic and diluted net loss per
common and Class B share $0.03 $0.01
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Weighted average common and
Class B shares outstanding 30,250,000 17,050,000
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NeuroMedix Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three-month Three-month
period ended period ended Cumulative
December 31, December 31, from
2006 2005 inception
$ $ $
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OPERATING ACTIVITIES
Net loss for the period (1,030,107) (212,047) (3,636,130)
Add items not involving cash
Amortization 788 507 3,335
Stock-based compensation expense 11,438 6,937 39,938
Write-off of receivable - - 8,153
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(1,017,881) (204,603) (3,584,704)
Changes in non-cash working
capital items 492,494 176,996 805,172
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Cash used in operating activities (525,387) (27,607) (2,779,532)
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INVESTING ACTIVITIES
Purchase of equipment - (8,625) (13,060)
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Cash used in investing activities - (8,625) (13,060)
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FINANCING ACTIVITIES
Proceeds from issuance of common
shares, net - - 2,746,619
Proceeds from issuance of Class B
shares, net - - 491,968
Increase in promissory note - 50,586 51,133
Repayment of promissory note - - (51,133)
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Cash provided by financing
activities - 50,586 3,238,587
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Net increase (decrease) in cash
during the period (525,387) 14,354 445,995
Cash, beginning of period 971,382 18,099 -
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Cash, end of period 445,995 32,453 445,995
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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
