- C$229 (US 173) million of
outstanding debt converted into Common Shares
- C$114 (US$87) million in gross proceeds raised in
concurrent financings
- Internal promotions within the management team for Chief
Financial Officer and General Counsel
LAVAL, QC, ROCKVILLE, MD and CAMBRIDGE, United Kingdom, Aug. 12, 2019 /CNW Telbec/ - Prometic Life
Sciences Inc. (TSX: PLI) (OTCQX: PFSCF) ("Prometic" or "Company"),
a biopharmaceutical company focused on developing novel
therapeutics to treat unmet needs in patients with liver,
respiratory and kidney disease, primarily in rare or orphan
diseases, today announced financial results for its fiscal 2019
second quarter ended June
30th 2019. All amounts are in thousands of
Canadian dollars and adjusted to reflect the reverse share
consolidation, except where otherwise noted.
"During the second quarter, we were able to complete a series of
financial transactions to stabilize and improve our financial
situation at Prometic, and we will look to strengthen our balance
sheet further in 2019 as our ongoing business development
activities are brought to a conclusion," said Kenneth Galbraith, Prometic's Chief Executive
Officer. "We are now focused on progressing the development of our
novel products, Ryplazim™, PBI-4050 and PBI-4547 to address serious
unmet patient needs in life threatening diseases. We look forward
to sharing more about our progress in clinical development
throughout 2019 and 2020."
Management Appointments
Effective September 1, 2019, Ms.
Murielle Lortie, currently Vice
President - Finance, will be promoted to Chief Financial Officer of
the Company and Ms. Marie Iskra,
currently Associate General Counsel, will be promoted to General
Counsel for the Company. Mr. Patrick Sartore and Mr.
Bruce Pritchard will continue to
focus on their roles as Chief Operating Officer, North America and Chief Operating Officer,
International, respectively.
"I am very pleased to welcome Murielle and Marie to the
leadership team as I have been impressed by their contributions to
the Company during my tenure as CEO, and look forward to their
increased role in driving growth for Prometic in the years ahead.
Their appointments will also allow Patrick and Bruce to increase
their focus on the achievement of the key goals to drive
shareholder value in both the near-term and long-term", said Mr.
Galbraith.
Second Quarter Financial Results – Overview
Prometic's cash position in the second quarter of 2019
substantially improved as a result of a series of related
arrangements to restructure Prometic's outstanding indebtedness,
reduce its interest and certain other payment obligations, and
raise sufficient cash to build a robust balance sheet to fund the
next phase of Prometic's development (collectively the "Refinancing
Transactions"):
- $114.4 million (US$87 million) aggregate gross proceeds were
raised through a combination of a private placement offering of
Common Shares led by Consonance Capital Management ("Consonance")
and a concurrent equity rights offering ("Rights Offering") to
shareholders of Prometic at a price of $15.21 per Common Share (the "Transaction
Price");
- Approximately $228.9 million
(US$173 million) of the outstanding
debt owned by Structured Alpha LP ("SALP") was converted into
Common Shares at the Transaction Price, comprising all but
$10 million of SALP's outstanding
debt;
- The adjustment of the per warrant exercise price of certain
outstanding Common Share purchase warrants of Prometic held by SALP
to the Transaction Price (the "Warrant Repricing"); and
- A share consolidation on the basis of one post-consolidation
Common Share for every one thousand pre-consolidation Common Shares
was completed on July 5, 2019 in
anticipation of a filing for listing of the Company's Common Shares
on NASDAQ.
Current near-term priorities for the Company's leadership team
are as follows:
- Completing the necessary manufacturing and related activities
to allow for submission in H1-2020 to the FDA of an amendment to
the Company's BLA seeking regulatory approval for Ryplazim™ .
- The filing and approval of an Investigational New Drug
application ("IND") to enable the commencement of pivotal phase 3
clinical studies of PBI-4050 in patients with Alström
Syndrome.
- Continuing to work with external advisors, Lazard, on
opportunities to partner or monetize assets and businesses outside
of the Company's small molecule therapeutics business.
- Initiation of Phase 1 clinical studies for PBI-4547.
- Completing the process to list the Company's common shares for
trading on NASDAQ.
2019 Second Quarter Results
Revenues
Total revenues for the quarter ended June
30, 2019 were $8.8 million compared to $20.2 million during the comparative period
of 2018 which represents a decrease of $11.4 million.
Revenues from the sale of goods were $8.4
million during the quarter ended June
30, 2019 compared to $19.7
million during the corresponding period of 2018,
representing a decrease of $11.3
million. The decrease is due to the decrease in sales of
excess normal source plasma inventory and was partially offset by
increases in sales from our Bioseparation products by $2.3 million.
Cost of sales and other production expenses
Cost of sales and other production expenses were $3.9 million during the quarter ended
June 30, 2019 compared to
$16.4 million for the
corresponding period in 2018, representing a decrease of
$12.5 million. The decrease in
cost of sales and other production expenses, is mainly driven by
changes in the volume of sales of goods.
Research and Development ("R&D")
R&D expenses were $24.2
million during the quarter ended June
30, 2019 compared to $24.0
million for the corresponding period in 2018, representing a
slight increase of $0.2 million.
R&D expenses include the cost to manufacture plasma-derived
therapeutics and small molecule therapeutics for use in clinical
trial studies, to supply clinical trial patients until commercially
approved product is available, and the cost for the development of
our production processes of Ryplazim™ in preparation of filing an
amended BLA to the FDA. The manufacturing and purchase cost of
these therapeutics was $11.8 million during the quarter ended
June 30, 2019 compared to
$10.9 million during the quarter
ended June 30, 2018.
Administration, Sales & Marketing
Administration, selling and marketing expenses were $18.6 million during the quarter ended
June 30, 2019 compared to
$6.9 million for the corresponding
period in 2018, representing an increase of $11.6 million. This increase is mainly
attributable to the $9.4 million
increase in share-based payments expense due to significant changes
in stock options and restricted stock units driven by the
Refinancing Transactions.
Share-based payments expense
Share-based payments expense represents the expense recorded as
a result of stock options and restricted stock units issued to
employees and directors.
Share-based payments expense were $14.9
million during the quarter ended June
30, 2019 compared to $0.7
million during the corresponding period of 2018,
representing an increase of $14.2
million.
In conjunction with the Refinancing Transactions, the Company
made significant changes to its long-term equity incentive plans to
ensure alignment with performance and building shareholder value,
and attraction and retention of key employees to drive the
Company's future growth. The following important changes were
made:
- the cancellation of the outstanding options for employees in
return for the issuance of new options;
- the modification of the outstanding performance-based
restricted share units ("RSU") into time-vesting RSU, and
discontinuation of the RSU plan for any future grants; and
- the issuance of the new stock options to employees and
directors with vesting consistent with industry norms and tied to
long-term increases in shareholder value.
Certain of these changes triggered an immediate or accelerated
recognition of share-based compensation expense during the quarter
ended June 30, 2019, causing a
substantial increase in the non-cash share-based compensation
expense during the quarter.
Finance Costs
Finance costs were $3.6 million
for the quarter ended June 30, 2019
compared to $5.3 million during
the corresponding period of 2018, representing a decrease of
$1.8 million. The decrease is mainly
due to lower level of debt in the quarter ended June 30, 2019 compared to the same period of 2018
due to the debt restructuring completed as of April 23, 2019.
The adoption of the new lease standard, IFRS 16, Leases ("IFRS
16"), at the beginning of 2019, under which lease liabilities are
recognized for the discounted value of the future lease payments at
initial adoption and with interest expense recognized over the term
of each lease, is contributing to increasing finance costs in 2019.
The new standard was adopted using the modified retrospective
approach and as such, the 2018 figures are not restated.
Previously, the embedded interest component in each lease payment
was recognized as part of the lease expense included in the various
functions presented in the statement of operations such as cost of
sales and other production expenses, R&D and administration,
selling and marketing. The interest expense over the lease
liabilities was $1.8 million and
$3.6 million for the quarter and the
six months ended June 30, 2019,
respectively.
Non-cash loss on extinguishment of liabilities
Loss on extinguishments of liabilities were $92.3 million for the quarter ended June 30, 2019 principally as a result of the
Company concluding a debt restructuring agreement on April 23, 2019 with its major creditor, SALP. The
debt was reduced to $10.0 million
plus accrued interest due, in exchange for the issuance of
15,050,312 post-consolidation Common Shares. The difference between
the adjustment to the carrying value of the loan of $141.5 million and the amount recorded for the
shares issued of $228.9 million was
recorded as a loss on extinguishment of a loan of $87.4 million. This amount represents the
immediate recognition of the accreted interest that would have
otherwise been recognized as finance costs over the years until the
maturity of the long-term debt. Legal fees related to the debt
restructuring and the value of the Warrant Repricing were also
recognized as part of the loss on extinguishment of
liabilities.
Net Loss
The Company incurred a net loss of $133.7
million during the quarter ended June
30, 2019 compared to a net loss of $33.1 million for the corresponding period of
2018, representing an increase in the net loss of $94.9 million. This is mainly driven by the
impact of the loss on extinguishment of liabilities caused by the
debt restructuring of $92.3 million
that occurred during the second quarter and the increase in the
share-based compensation expense of $14.2
million.
Subsequent Events
On July 2, 2019, In anticipation
of filing a listing application for trading the Company's
Common Shares on NASDAQ, Prometic announced the consolidation of
the Company's issued and outstanding common shares on the basis of
one (1) post-consolidation Common Share for every one thousand
(1000) pre-consolidation Common Shares (the "Consolidation"). This
consolidation was approved at the special meeting of the common
shareholders of the Company held on June 19,
2019 and commenced trading on the TSX on a
post-consolidation basis at the open of trading on July 5, 2019.
About Prometic Life Sciences Inc.
Prometic (www.prometic.com) is an innovative biopharmaceutical
corporation with a broad pipeline of small molecule therapeutics
under development to treat unmet needs in patients with liver,
respiratory and kidney disease, including rare diseases. Prometic's
differentiated research involves the study of two
G-protein-coupled-receptors, GPR40 and GPR84. These drug candidates
have a dual mode-of-action as agonists ("stimulators") of GPR40 and
antagonists ("inhibitors") of GPR84. Our lead drug candidate,
PBI-4050, is expected to enter Phase 3 clinical studies for the
treatment of Alström Syndrome. A second drug candidate, PBI‑4547,
is expected to enter Phase 1 clinical studies in 2019. Prometic
also has leveraged its experience in bioseparation technologies to
isolate and purify biopharmaceuticals from human plasma. The lead
plasma-derived therapeutic product is Ryplazim™ (plasminogen) which
the Company expects to file a BLA with the US FDA seeking approval
to treat patients with congenital plasminogen deficiency. The
Corporation also operates a contract development and manufacturing
operation in the United Kingdom,
deriving revenue through sales of affinity chromatography media.
Prometic has active business operations in Canada, the United
States and the United
Kingdom.
Forward Looking Statements
This presentation contains forward-looking statements about
Prometic's objectives, strategies and businesses that involve risks
and uncertainties. These statements are "forward-looking" because
they are based on our current expectations about the markets we
operate in and on various estimates and assumptions. Actual events
or results may differ materially from those anticipated in these
forward-looking statements if known or unknown risks affect our
business, or if our estimates or assumptions turn out to be
inaccurate. Such risks and assumptions include, but are not limited
to, Prometic's ability to develop, manufacture, and successfully
commercialize value-added pharmaceutical products, the availability
of funds and resources to pursue R&D projects, the successful
and timely completion of clinical studies, the ability of Prometic
to take advantage of business opportunities in the pharmaceutical
industry, uncertainties related to the regulatory process and
general changes in economic conditions. You will find a more
detailed assessment of the risks that could cause actual events or
results to materially differ from our current expectations in the
Annual Information Form for the year ended December 31, 2018, under the heading "Risk
Factors". As a result, we cannot guarantee that any forward-looking
statement will materialize. We assume no obligation to update any
forward-looking statement even if new information becomes
available, as a result of future events or for any other reason,
unless required by applicable securities laws and regulations. All
amounts are in Canadian dollars unless indicated otherwise
SOURCE ProMetic Life Sciences Inc.