Sophiris Bio Reports Second Quarter Financial Results and Recent Key Operational Highlights

T.SHS

SAN DIEGO AND VANCOUVER, Aug. 5, 2013 /CNW/ - Sophiris Bio Inc. (Sophiris, TSX: SHS) (the "Company" or "Sophiris"), a biopharmaceutical company developing a clinical-stage, targeted treatment for the symptoms of benign prostatic hyperplasia (BPH or enlarged prostate), today announced financial results and recent key operational highlights for the three and six months ended June 30, 2013.

Recent Key Operational Highlights

  • On July 15, 2013, the Company announced the appointment of Joseph L. Turner to its Board of Directors effective and contingent upon the closing of the Company's proposed initial U.S. public offering of its common shares and listing on The NASDAQ Stock Market.  Mr. Turner has more than 25 years of financial management experience in the biotech and pharmaceutical industries.  Mr. Turner currently serves on the Board of Directors and is the chair of the audit committee of three publicly-traded pharmaceutical companies.

  • Topsalysin was approved as the generic name for PRX302 by both the United States Adopted Names Council (USAN) and the World Health Organization and was published on the USAN web site and in the US Pharmacopeia Dictionary on May 1, 2013.

  • On July 12, 2013, the Company announced the resignation of both Noah Knauf and Amit Sobti, the Warburg Pincus nominees from its Board of Directors. The resignation of the Warburg Pincus nominees was in conjunction with the independent sales transaction of 50 million shares of Sophiris' common shares from Warburg Pincus to Tavistock Life Sciences.

Financial Results for the Second Quarter Ended June 30, 2013

The Company reported a net loss of $2.6 million ($0.02 per share) for the three months ended June 30, 2013, compared to a net loss of $5.7 million ($0.03 per share) for the three months ended June 30, 2012, representing a decrease of $3.1 million.

Research and Development Costs

Research and development expenses were $1.2 million for the three months ended June 30, 2013 compared to $3.7 million for the three months ended June 30, 2012, representing a decrease of $2.5 million. The decrease in research and development costs is primarily attributable to a $1.5 million decrease in the costs associated with the Company's transfer and scale-up of manufacturing activities for PRX302 and a $0.5 million decrease in non-clinical activities, specifically a repeat dose monkey study and a rat fertility study, both of which were completed in 2012. Also contributing to the reduction in research and development expenses was a decrease in consulting costs of $0.3 million.  The research and development costs included stock-based compensation charges of $0.1 million for the three months ended June 30, 2013, as compared to approximately $43,000 for the three months ended June 30, 2012.

General and Administrative Costs

General and administrative expenses were $0.9 million for the three months ended June 30, 2013, compared to $1.4 million for the three months ended June 30, 2012. This decrease is primarily related to a decrease in personnel related costs and market research costs which were partially offset by an increase in accounting and tax professional fees. The general and administrative costs included stock-based compensation charges of $0.2 million for the three months ended June 30, 2013, as compared to approximately $0.1 million for the three months ended June 30, 2012.

Interest Expense

During the three months ended June 30, 2013, the Company incurred interest expense related to its Oxford Loan of $0.3 million, of which $0.1 million was related to the accretion of the debt discount, as compared to the three months ended June 30, 2012, in which the Company incurred $0.5 million interest expense, of which $0.2 million related to the accretion. Cash paid for interest was $0.2 million for the three months ended June 30, 2013 as compared to $0.4 million for the same period in 2012.

Foreign Exchange (Loss) Gain

For the three months ended June 30, 2013, the Company recorded a foreign exchange loss of $0.3 million compared to a foreign exchange loss of $0.2 million for the three months ended June 30, 2012.

Financial Results for the Six Months Ended June 30, 2013

The Company reported a net loss of $2.7 million ($0.02 per share) for the six months ended June 30, 2013, compared to a net loss of $10.2 million ($0.07 per share) for the six months ended June 30, 2012, representing a decrease of $7.5 million. The significant decrease in the Company's net loss is primarily related to the recording of revenue of $4.6 million associated with a non-refundable milestone payment, net of a sub-licensing royalty fee, in connection with the Company's licensing agreement with Kissei during the six months ended June 30, 2013. This milestone payment relates to the completion of certain development activities as outlined in the Company's licensing agreement with Kissei.

License Revenue

During the six months ended June 30, 2013, the Company recognized as revenue $4.6 million, net of a sub-licensing royalty fee, associated with a non-refundable milestone payment due upon the achievement of certain development activities in connection with the Company's licensing agreement for PRX302 with Kissei. The milestone payment was recorded net of a $0.4 million sub-license royalty fee due to UVIC Industry Partnerships Inc. and The Johns Hopkins University.

Research and Development Costs

Research and development expenses were $3.7 million for the six months ended June 30, 2013 compared to $6.8 million for the six months ended June 30, 2012, representing a decrease of $3.1 million. The decrease in research and development costs is primarily attributable to a $1.0 million decrease in the costs associated with the Company's non-clinical activities, specifically a repeat dose monkey study and a rat fertility study, both of which were completed in 2012. In addition, the costs associated with the transfer and scale-up of manufacturing activities for PRX302 decreased approximately $1.8 million from the six months ended June 30, 2012 compared to the six months ended June 30, 2013. Research and development costs included stock-based compensation charges of $0.1 million for both the six months ended June 30, 2013 and the six months ended June 30, 2012.

General and Administrative Costs

General and administrative expenses were $2.1 million for the six months ended June 30, 2013, compared to $2.4 million for the six months ended June 30, 2012. The decrease of $0.3 million is due to a reduction in personnel related costs and marketing research costs offset partially by an increase in accounting and tax professional fees and stock based compensation expense.  The general and administrative costs included stock-based compensation charges of $0.4 million for the six months ended June 30, 2013, as compared to approximately $0.3 million for the six months ended June 30, 2012.

Interest Expense

During the six months ended June 30, 2013, the Company incurred interest expense related to its Oxford Loan of $0.7 million, of which $0.3 million was related to the accretion of the debt discount, as compared to the six months ended June 30, 2012, in which the Company incurred $1.0 million interest expense, of which $0.3 million related to the accretion. Cash paid for interest was $0.5 million for the six months ended June 30, 2013 as compared to $0.7 million for the same period in 2012.

Foreign Exchange (Loss) Gain

For the six months ended June 30, 2013, the Company recorded a foreign exchange loss of $0.4 million compared to a foreign exchange loss of $0.1 million for the six months ended June 30, 2012.

Income Tax Expense

The milestone payment from Kissei was subject to a 10% Japanese withholding tax. As a result the Company recorded income tax expense of $0.5 million for the six months ended June 30, 2013. The Company will be eligible to utilize the withholding tax to offset future taxes due in Japan, if any. Given the uncertainty around the Company's ability to generate future taxable income, the Company has expensed the withholding tax during the six months ended June 30, 2013.

For complete financial results, please see the Company's filings at www.sedar.com.

About Sophiris

Sophiris Bio Inc. is a biopharmaceutical company developing a clinical-stage, targeted treatment for the symptoms of benign prostatic hyperplasia (BPH or enlarged prostate), which it believes is an unsatisfied market with significant market potential. Sophiris' lead candidate for BPH, PRX302, is designed to be as efficacious as pharmaceuticals, less invasive than the surgical interventions, and without the sexual side effects seen with existing treatments. Sophiris is planning to begin a Phase 3 clinical trial of PRX302 in the second half of 2013 subject to raising additional capital. For more information, please visit www.sophirisbio.com.

Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Sophiris' current beliefs as well as assumptions made by and information currently available to Sophiris and relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Sophiris in its public securities filings; actual events may differ materially from current expectations. Sophiris disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
Sophiris Bio Inc.
Condensed Consolidated Interim Statement of Operations, Comprehensive Loss and Deficit
(Stated in United States Dollars)
(unaudited)
           
      For the three months ended June 30,   For the six months ended June 30,
                   
      2013   2012   2013   2012
      $   $   $   $
                   
Revenue                  
License revenue, net of royalties     -   -   4,625,000   -
Expenses                  
Research and development      1,154,586   3,691,683   3,650,217   6,782,857
General and administrative     879,956   1,355,881   2,126,239   2,361,706
      2,034,542   5,047,564   5,776,456   9,144,563
                   
Other income (expense)                  
Interest income     -   36,312   -   48,662
Interest expense     (346,254)   (519,175)   (739,448)   (1,037,778)
Other income     -   -   32,000   -
Foreign exchange loss     (255,234)   (158,051)   (388,467)   (83,809)
                   
      (601,488)   (640,914)   (1,095,915)   (1,072,925)
                   
Net loss for the period before income tax expense     (2,636,030)   (5,688,478)   (2,247,371)   (10,217,488)
              -    
Income tax expense      -   -   500,000   -
                   
Net loss for the period     (2,636,030)   (5,688,478)   (2,747,371)   (10,217,488)
                   
                   
Other comprehensive income (loss)                  
Currency translation adjustments      191,215   (257,296)   299,300   (103,354)
                   
                   
Total comprehensive loss for the period     (2,444,815)   (5,945,774)   (2,448,071)   (10,320,842)
                   
                   
Deficit - Beginning of the period     (73,788,689)   (57,042,363)   (73,677,348)   (52,513,353)
                   
                   
Deficit - End of the period     (76,424,719)   (62,730,841)   (76,424,719)   (62,730,841)
                   
                   
Basic and diluted loss per share     (0.02)   (0.03)   (0.02)   (0.07)
                   
Weighted average number of outstanding shares-                  
  Basic and diluted     163,793,203   163,793,203   163,793,203   153,719,943
                     

 

 
Sophiris Bio Inc.
Condensed Consolidated Interim Statement of Financial Position
(Stated in United States Dollars)
(unaudited)
                   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30,
2013
$

 
 
December 31,
2012
$
                   
Assets          
                   
Current assets      
  Cash      3,569,844   9,720,941
  Other receivables  78,502   71,408
  Deferred financing costs 2,243,064   936,759
  Prepaid expenses 247,871   447,053
              6,139,281   11,176,161
Non-current assets      
  Property and equipment 123,481   162,762
  Other long term assets -   44,313
Total assets 6,262,762   11,383,236
                   
Liabilities        
                   
Current liabilities      
  Accounts payable and accrued liabilities 4,034,876   4,612,650
  Current portion of secured promissory notes 6,180,158   5,894,566
              10,215,034   10,507,216
                   
Long-term secured promissory notes 3,100,854   6,006,360
                   
Commitments       
                   
Shareholders' deficit      
  Common shares 54,490,667   54,490,667
  Common share purchase warrants 7,794,478   7,794,478
  Contributed surplus  6,833,229   6,307,944
  Currency translation  adjustments 253,219   (46,081)
  Deficit    (76,424,719)   (73,677,348)
  Total shareholders' deficit (7,053,126)   (5,130,340)
Total liabilities and shareholders' deficit 6,262,762   11,383,236
       

 

 
Sophiris Bio Inc.
Condensed Consolidated Interim Statement of Cash Flows
(Stated in United States Dollars)
(unaudited)
     
    For the six months ended June 30,
    2013   2012
    $   $
         
Cash flows used in operating activities      
Net loss for the period (2,747,371)   (10,217,488)
Items not affecting cash:      
  Stock-based compensation 525,285   343,680
  Accretion expense 257,660   328,796
  Depreciation of property and equipment 42,023   40,082
  Amortization of intangible assets -   99,120
  Unrealized foreign exchange loss (gain) 387,781   (301,436)
  Interest expense 481,788   708,982
  Interest income -   (48,662)
Change in working capital:      
  Other receivables 23,146   154,463
  Other current assets (32,000)   -
  Prepaid expenses 198,348   184,056
  Other long term assets 44,058   (5,784)
  Accounts payable and accrued liabilities (817,151)   129,661
Net cash flows used in operating activities (1,636,433)   (8,584,530)
         
Cash flows used in investing activities      
Interest received -   17,681
Purchase of property and equipment (2,742)   (20,718)
Net cash flows used in investing activities (2,742)   (3,037)
         
Cash flows (used in) provided by financing activities      
Issuance of common shares in connection with private placement      
   - net of issurance costs paid -   8,285,262
Deferred financing costs (1,040,101)   -
Principal payments on notes payable (2,877,573)   (444,940)
Interest paid (504,569)   (712,504)
Net cash flows (used in) provided by financing activities (4,422,243)   7,127,818
         
Effect of exchange rate changes on cash      
  and cash equivalents (89,679)   201,790
Net decrease in cash and cash equivalents (6,151,097)   (1,257,959)
         
Cash and cash equivalents - Beginning of the period 9,720,941   23,410,478
         
Cash and cash equivalents - End of the period 3,569,844   22,152,519
         
Supplemental cash flow information      
         
Income taxes paid 500,000   -
       

 

 

 

SOURCE: Sophiris Bio, Inc.

Lauren Glaser
Investor Relations
The Trout Group
646-378-2972
lglaser@troutgroup.com

James Beesley
Investor Relations
Sequoia Partners
778-389-7715
james@sequoiapartners.ca

Michael Moore
Investor Relations
Equicom Group
619-467-7067
mmoore@tmxequicom.com

Jason I. Spark
Canale Communications, Inc.
619-849-6005
jason@canalecomm.com

Copyright CNW Group 2013

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