TORONTO, July 15, 2014 /CNW/ - Lorus Therapeutics Inc.
(TSX: LOR) today reported financial results for the year and three
months ended May 31, 2014 and
provided an overview of fiscal 2014 highlights and recent
accomplishments. Unless specified otherwise, all amounts are in
Canadian dollars.
Net loss and comprehensive loss for the year
ended May 31, 2014 increased to
$10.6 million ($0.17 per share) compared to $5.6 million ($0.13
per share) for the year ended May 31,
2013. The increase in net loss and comprehensive loss for
the year ended May 31, 2014 compared
with the prior year is due primarily to increased general and
administrative costs of $5.1 million
resulting from the hiring of three new executives, increased stock
based compensation expense, severance costs of $1.1 million paid to the former President and
COO, as well as increased legal, patent, travel, Board and
consulting costs associated with a significant increase in
corporate and financing activity. At May 31, 2014 Lorus had cash and cash equivalents
and short-term investments of $30.4
million compared to $653
thousand at May 31, 2013.
"Fiscal 2014 was a transformational year for the
company and a period of significant achievements ranging from
product development to the establishment of our new executive team
and secured financings," said William
Rice, Ph.D., Chairman, President and Chief Executive
Officer. "Data supporting the promise of LOR-253 in the treatment
of acute myeloid leukemia and other hematologic cancers were
presented for the first time at American Association for Cancer
Research Annual Meeting 2014, generating interest from current and
new financial analysts and investors focused in oncology
innovation. With a new management team in place, we considerably
strengthened our resources through successful strategic public
financings. We expect this year to be one of continued
execution as we advance the clinic development of our lead agent
LOR-253."
CORPORATE HIGHLIGHTS
- At the American Association for Cancer Research (AACR) Annual
Meeting 2014, Lorus researchers demonstrated the ability of LOR-253
to induce cell death, or apoptosis, in blood cancer cell lines,
including acute myeloid leukemia (AML) cells, in vitro and
concluded that the studies support further evaluation of LOR-253 as
a potential therapy for AML and other hematologic cancers.
- LOR-253 showed strong anti-cancer synergistic activity in
combination with conventional chemotherapeutics (e.g.,
daunorubicin, azacitidine, decitabine and cytarabine). With the
potential to reactivate the silenced KLF4 gene and induce apoptosis
in AML, LOR-253 may offer an important new approach for the
treatment of AML and hematologic malignancies.
- Lorus successfully received more than $45 million in funding over the past year.
- In June 2014, Lorus announced
that 18.5 million common share purchase warrants and 1.2 million
broker warrants originally issued in connection with a financing
completed in June 2012 have been
exercised, raising approximately $8.7
million in net proceeds since mid-April.
- In April 2014, the Company raised
total gross proceeds of $28.3 million
from a public offering of 50,000,000 shares including an
over-allotment of 6,500,000 common shares at a price of
$0.50.
- In December 2013, Lorus completed
a public offering of 12,730,000 common shares at a price of
$0.55 per common share for aggregate
gross proceeds of $7.0 million.
In January 2014, the underwriters of
the offering exercised in full their over-allotment to purchase an
additional 1,909,500 shares at a price of $0.55 per common share for additional gross
proceeds of $1.05 million.
- Lorus announced new leadership, adding accomplished
biotechnology executives with extensive clinical development,
financial and business development experience:
- In October 2013, the Company
announced the appointment of William G.
Rice, Ph.D., as Chief Executive Officer and Chairman of the
Board and Daniel D. Von Hoff, M.D.,
as a special advisor, fulfilling the role of Senior Vice President
of Medical Affairs.
- In October 2013, Brian Druker, M.D., was appointed as the Chair
of Lorus' Scientific Advisory Board.
- In December 2013, Avanish Vellanki joined as Chief Business
Officer overseeing global business development, licensing and
corporate strategy, and Gregory K.
Chow joined as Chief Financial Officer with responsibility
for corporate finance and accounting functions.
CORPORATE OUTLOOK
- The Company plans to initiate this summer a Phase 1b clinical
trial to evaluate LOR-253 in the treatment of a patient population
with suppressed KLF4 in AML, Myelodysplastic Syndromes and
potentially other hematologic malignancies.
FOURTH QUARTER RESULTS
Our net loss and comprehensive loss for the
three months ended May 31, 2014
increased to $4.2 million compared
with $1.3 million in the three months
ended May 31, 2013. The
increase in net loss is primarily attributable to increased general
and administrative costs of $2.7
million in the three months ended May
31, 2014 compared with the prior year.
General and administrative expenses increased to
$3.2 million in the three months
ended May 31, 2014 compared with
$462 thousand in the three months
ended May 31, 2013. The
increase is due to:
- Severance payments to the former President and CEO of
$1.1 million of which $762 thousand were allocated to general and
administrative expenses;
- Increased stock based compensation expense of $323 thousand related to stock options granted in
the fourth quarter;
- Increased salary, benefit and travel costs associated with
three new members of management; and
- Increased legal, patent, Board and consulting costs associated
with increased levels of corporate, product development and
financing activities.
Cash used in operating activities in the three
months ended May 31, 2014 increased
to $3.9 million compared with
$904 thousand in the three months
ended May 31, 2013 which is primarily
due to the increased loss in the current three month period.
Lorus Therapeutics Inc. |
|
|
Condensed Consolidated Interim
Statements of Loss and Comprehensive Loss |
(unaudited) |
|
|
|
Three |
Three |
(amounts in 000's except for per common share
data) |
months ended |
months ended |
(Canadian dollars) |
May 31, 2014 |
May 31, 2013 |
REVENUE |
$
- |
$
- |
|
|
|
EXPENSES |
|
|
Research and development |
1,012 |
860 |
General and administrative |
3,195 |
462 |
Operating expenses |
4,207 |
1,322 |
Finance expense |
75 |
− |
Finance income |
(61) |
(4) |
Net financing expense (income) |
14 |
- |
Net loss and total comprehensive loss for the
period |
4,221 |
1,318 |
Basic and diluted loss per common
share |
$
0.04 |
$
0.03 |
Weighted average number of common
shares |
|
|
outstanding used
in the calculation of |
|
|
Basic and
Diluted loss per common share |
103,113 |
42,251 |
FULL YEAR RESULTS
Cash, cash equivalents and short term investments totaled
$30.4 million as of May 31, 2014, compared to $653 thousand as of May
31, 2013.
Research and Development (R&D) Expenses
Research and development expenses totaled $3.0 million in the year ended May 31, 2014 compared to $3.3 million during the prior year.
Research and development expenses consist of the following:
|
|
|
|
|
2014 |
|
2013 |
Program costs (see below) |
|
|
|
$ |
2,287 |
|
3,126 |
Severance cost for former
President & COO
Deferred share unit costs
Stock based compensation |
|
|
|
|
326
90
296 |
|
−
(40)
198 |
Depreciation of equipment |
|
|
|
|
16 |
|
33 |
|
|
|
|
$ |
3,015 |
|
3,317 |
Program costs by program:
|
|
|
|
|
|
|
2014 |
|
2013 |
Small molecule program |
|
|
|
|
|
$ |
2,199 |
|
2,701 |
Immunotherapy |
|
|
|
|
|
|
88 |
|
425 |
|
|
|
|
|
|
$ |
2,287 |
|
3,126 |
Research and development expenditures have
decreased by $302 thousand in the
current year to $3.0 million compared
with $3.3 million in the year ended
May 31, 2013. The reduced
spending is primarily the result of lower program costs.
Spending on the LOR-253 program was reduced in
the current year as a Phase I trial in patients with advanced solid
tumors has been completed and further clinical development and
expenditures were paused while the appropriate strategic and
clinical direction for the drug candidate was determined and
additional financing was secured. In addition, further
spending on the IL-17E program was also paused during that
period. We expect a significant increase in spending on the
LOR-253 program in fiscal 2015 as we anticipate commencing clinical
trials.
The severance expenses for our former President
and Chief Operating Officer were paid in full in April 2014. The total severance amount of
$1.1 million was allocated between
general and administrative ($762
thousand) and research and development ($326 thousand). There are no ongoing
obligations related to the severance payment. The allocation
was based upon the time spent by the former President and COO on
research and development vs. general and administrative
activities.
Deferred share unit costs increased in the year
ended May 31, 2014 due to an increase
in the share price of Lorus and the associated fair value of the
units. A recovery of deferred share unit costs was recorded
in the year ended May 31, 2013, which
resulted from a reduction in our share price during the year.
In April 2014, 780,000 common shares
of Lorus were issued in payment of the outstanding DSU liability
with a fair value of $444
thousand. There are no outstanding DSU's as of
May 31, 2014.
Stock-based compensation costs were higher in
the year ended May 31, 2014 compared
with the prior year due to grants issued to new consultants and
Scientific Advisory Board members.
General and Administrative (G&A) Expenses
General and administrative expenses totaled
$7.4 million for the year ended
May 31, 2014 compared to $2.3 million in the prior year. General and
administrative expenses consisted of the following:
|
|
|
|
2014 |
|
2013 |
General and administrative excluding salaries |
|
|
$ |
2,658 |
|
1,368 |
Salaries |
|
|
|
2,217 |
|
675 |
Severance cost for former President and COO |
|
|
|
762 |
|
− |
Deferred share unit costs
Stock based compensation |
|
|
|
183
1,530 |
|
(92)
316 |
Depreciation of equipment |
|
|
|
5 |
|
5 |
|
|
|
$ |
7,355 |
|
2,272 |
General and administrative expenses excluding
salaries increased in the current year due to increased travel,
consulting and corporate legal costs associated with the change in
strategic direction, additional members of management and key
advisors and generally increased corporate and financing
activities. In addition there were increased costs for both
director fees primarily due to the strategic review and patent
expenditure for new patents filed and a review of our existing
patent portfolio.
Salary charges in the year ended May 31, 2014 increased over the prior year period
due to the appointments of additional members of management and
bonuses granted on the date of employment as well as upon the
closing of the December 2013 and
April 2014 equity offerings as
described above.
The severance cost for our former President and
COO was paid in full in April 2014
and the details are described under 'Research and Development'
above.
Deferred share unit costs increased as described
under 'Research and Development (R&D) Expenses' above.
Stock-based compensation expense was
significantly higher in the year ended May
31, 2014 compared with the prior year due to option grants
to new members of management and advisory boards, some of
which vested immediately resulting in the entire fair value of the
options being recognized in the current year compared with fewer
option grants in the prior year periods which vested over a longer
period of time. In addition stock options were granted in
April 2014 to directors, officers and
employees following the close of the equity financing described
above.
Net loss and comprehensive loss for the year
ended May 31, 2014 was $10.6 million ($0.17 per share) compared to $5.6 million ($0.13
per share) in the year ended May 31,
2013, primarily due to higher general and administrative
expenses, as previously noted.
For further details and to view the Company's
Audited Consolidated Financial Statements and Management's
Discussion and Analysis, please see the Company's filings on
www.sedar.com and on www.lorusthera.com.
Lorus Therapeutics Inc.
|
|
|
|
|
Consolidated Statements of Loss and
Comprehensive Loss
Years ended May 31, |
|
|
(amounts in Canadian 000's except for per
common share data) |
2014 |
2013 |
REVENUE |
$
— |
$
— |
|
|
|
EXPENSES |
|
|
Research and development |
3,015 |
3,317 |
General and administrative |
7,355 |
2,272 |
Operating expenses |
10,370 |
5,589 |
Finance expense |
259 |
6 |
Finance income |
(76) |
(30) |
Net finance expense (income) |
183 |
(24) |
Net loss and total comprehensive loss for the
year |
10,553 |
5,565 |
Basic and diluted loss per common
share |
$ 0.17 |
$0.13 |
Weighted average number of common
shares |
|
|
outstanding used
in the calculation of: |
|
|
Basic and
diluted loss per share |
62,592 |
42,251 |
CONFERENCE CALL AND WEBCAST
Lorus will host a conference call to discuss
results for the fourth quarter ended May 31,
2014 and year end 2014 financial results on
Tuesday, July 15, 2014 at
5:00 p.m. ET. Participants can
access the conference call by dialing 1-888-231-8191 (North
American toll free number) or 647-427-7450 (local). The
conference call will be available via a live webcast at
http://www.newswire.ca/en/webcast/detail/1384185/1535487, and will
also available through a link on the Investor Relations section of
Lorus' website at
http://lorusthera.com/news-events/events.php. Please log onto
the webcast at least 10 minutes prior to the start of the call to
ensure time for any software downloads that may be required.
An archived version of the webcast will be available on the
company's website for 30 days. An audio replay of the
webcast will be available approximately two hours after the
conclusion of the call for 30 days by dialing 1-855-859-2056, using
the passcode 72210243.
About Lorus
Lorus is a clinical-stage biotechnology company
with a commitment to discovering and developing targeted therapies
addressing unmet medical needs in oncology. We aim to develop
therapeutics focused on novel cellular targets on the leading edge
of cancer research coupled to companion diagnostics to identify the
optimal patient population for our products. Our pipeline of
cancer drug candidates includes small molecule products and
immunotherapies providing additive or synergistic efficacy without
leading to overlapping toxicities with existing anti-cancer
regimens, facilitating the adoption of combination therapies. Lorus
Therapeutics Inc. is listed on the Toronto Stock Exchange under the
symbol LOR.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of Canadian and U.S. securities laws
including regarding a potential listing on the NASDAQ Stock
Exchange, the Share Consolidation and the Name Change. Such
statements include, but are not limited to, statements relating to:
our ability to obtain financing or partnerships, our ability to
fund or reach developmental milestones, our 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 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.
SOURCE Lorus Therapeutics Inc.