Altamira Gold Corp. press release
BELLUS Health moves forward on nutraceutical and pharmaceutical fronts - Reports Results for First Half of 2008
TSXV - TSX Venture Exchange · Gold · Copper · Canada
LAVAL, QC, Aug. 5 /CNW Telbec/ - BELLUS Health Inc. (NASDAQ: BLUS; TSX: BLU) announced meaningful progress in both its nutraceutical and pharmaceutical programs and reported results for the second quarter ended June 30, 2008. The Company reported a net loss of $12,706,000 ($0.26 per share) for the second quarter, compared to $30,484,000 ($0.75 per share) for the same period the previous year. For the first half, the net loss amounted to $25,608,000 ($0.52 per share) compared to $51,500,000 ($1.30 per share) for the first half of 2007. The net loss for the periods ended June 30, 2007 included a non-cash accretion expense under Canadian GAAP of $10,430,000 relating to the $40 million 5% senior subordinated convertible notes issued in May 2007. The decrease in the net loss is also due to a reduction in research and development expenses, before research tax credits and grants, which amounted to $7,123,000 this quarter and $15,903,000 for the first six months, compared to $14,741,000 for the second quarter the previous year and $31,569,000 for the first half of 2007. During the first six months of the year, the Company also ramped up its expenditures in marketing and pre-launch activities associated with VIVIMIND(TM) for the protection of memory function and with the creation in 2008 of its wholly owned subsidiary OVOS Natural Health Inc.
As at June 30, 2008, the Company had available cash, cash equivalents and marketable securities of $29,118,000, compared to $58,672,000 at December 31, 2007. BELLUS Health expects to further reduce its burn rate during the remainder of fiscal 2008.
"I am pleased to see the progress BELLUS Health is making in both its nutraceutical and pharmaceutical programs," said Dr. Francesco Bellini, Chairman, President and CEO of BELLUS Health. "OVOS Natural Health, our nutraceutical subsidiary, is on track to launch VIVIMIND(TM) in Canada and on the Internet during the third quarter of 2008. The launch will be supported by synergistic advertising and public relations campaigns targeting major broadcast, print and web electronic media. With respect to our pharmaceutical activities, we are proceeding as planned for our second Phase III clinical trial with KIACTA(TM) and our Phase II clinical trial with NC-503 for the treatment of Type II diabetes and certain features of metabolic syndrome. BELLUS Health has succeeded in the past six months establishing advanced and strong programs for its commercial, development and research activities and has significantly reduced its burn rate. Building on these accomplishments, the Company is entering a new and exciting phase in its development which will also include for the management to secure a solid financial base," he concluded.
OVOS Natural Health Readying for VIVIMIND(TM) Launch
OVOS Natural Health's first product, VIVIMIND(TM), being marketed for memory protection, is on target for its Canadian and Internet launch in the third quarter of 2008. The Company will use a specialized external sales force to sell and distribute VIVIMIND(TM) through traditional retail and natural health food channels. To date, OVOS Natural Health already has a commitment from over 2,000 retail points of sale in Canada, comprised of major retailers across the country. The Company expects to grow the number to more than 3,000 retail points of sale by year-end.
The launch of VIVIMIND(TM) will be coordinated with the help of a global Advisory Board chaired by Dr. Oscar L. Lopez, Department of Neurology, University of Pittsburgh, U.S., and of a Canadian Advisory Board chaired by Mr. Jean-Yves Dionne, a Canadian pharmacist, scientific advisor and consultant to companies in the nutraceutical sector. The combined collective knowledge of these experts in the field of neurology, basic science, pharmacy, nutrition and naturopathy will serve to guide OVOS Natural Health as it builds and expands its operations. After launching in Canada and on the Internet, OVOS Natural Health is taking steps to launch VIVIMIND(TM) in the United States in 2009 while investigating other geographic regions.
Geared primarily to consumers most inclined to self-care,VIVIMIND(TM) will reach out to the fastest growing sector of the population. As a brand backed by strong science-based evidence, VIVIMIND(TM) will be in a position to transform the natural health product industry. Based on 15 years of significant scientific research, including clinical testing with over 2,000 individuals worldwide and patent protection until 2019, VIVIMIND(TM) is expected to be a breakthrough in the nutraceutical industry.
"In a major groundbreaking clinical study performed in Canada and the United States using brain scans (MRI), VIVIMIND(TM) has provided a statistically significant reduction of 68% in the loss of brain volume in the hippocampus, a part of the brain structure that is associated with memory and learning, when compared to the untreated group," said Mr. Gary Schmid, President and Chief Executive Officer of OVOS Natural Health. "The matching individuals taking VIVIMIND(TM) also performed better on tests of memory and thinking compared with individuals taking a placebo. The results will be submitted for publication in a peer-reviewed journal at an appropriate time," he added.
VIVIMIND(TM) is a synthetic form of homotaurine, a naturally occurring amino acid which exists in certain seaweed. The active compound in VIVIMIND(TM) is chemically and biologically identical to the natural compound.
"OVOS Natural Health's strategy is to drive VIVIMIND(TM) to worldwide success while demonstrating leadership in an under-served sector - the mind," said Mr. Schmid. "The Canadian launch, orchestrated in record time, will enable the Company to leverage its success in other territories. To that end, OVOS Natural Health is setting up an office in Salt Lake City, an important American market for natural health products. Mr. James W. Stitley, who has an extensive background with some of the most recognizable consumer packaged goods companies, will serve as General Manager. Mr. Stitley will join OVOS Natural Health after nearly 10 years with Schiff (Weider) Nutrition International. As our company grows and expands into the global market, our commitment is to maintain the same level of quality, consistency, responsibility and trustworthiness in every brand we make. OVOS Natural Health is now in a position to begin the commercialization of brands made with quality ingredients under Good Manufacturing Practice standards that will deliver self-care, evidence-based health solutions," Mr. Schmid concluded.
Pharmaceutical Programs Proceeding Well
Following BELLUS Health's decision in March 2008 to initiate a second Phase III clinical trial for eprodisate (KIACTA(TM)), the Company is expecting to begin the trial in the fourth quarter of 2008. It will be an international, double-blind, randomized, placebo-controlled and parallel design study of approximately 190 patients to be followed for a period of 24 months. The clinical endpoint will be similar to that of the first trial with a focus on renal function and a target p-value of 0.05. The first trial had provided statistically significant results on the primary endpoint with a p-value of 0.025(1).
This investigational product candidate is being developed for the treatment of a rare but devastating disease, Amyloid A (AA) amyloidosis, which attacks the kidney function and often leads to death.
(1)Cox analysis; New England Journal of Medicine 2007; 356(23): 2349.
Diabetes - An Enormous Medical Need
Work is proceeding on NC-503, our product candidate for the treatment of Type II diabetes and certain features of metabolic syndrome. Results from animal studies using a rat model of diabetes and metabolic syndrome have shown that NC-503 protects the kidney and decreases the glycemic levels with important metabolic improvement in triglyceridemia and cholesterolemia in obese diabetic Zucker rats, when compared to the control group. Treatment with NC-503 correlated with the preservation of 40% more pancreatic islet cells secreting insulin than in the control group.
This program has now advanced into a Phase II clinical trial in diabetic patients in Canada. The study is a 26-week, double-blind, placebo-controlled, randomized study. Interim results are expected in late 2008 or early 2009.
The recent announcement by BELLUS Health of the acquisition of Innodia Inc. should provide additional resources and complementary expertise to BELLUS Health to advance its work on this product candidate. Innodia's drug discovery efforts were focused primarily on amino acid-based therapies for the treatment of obesity and diabetes and related conditions.
Consolidated Financial Results Highlights
BELLUS Health Inc., formerly known as Neurochem Inc., (BELLUS Health or the Company) is a global health company focused on the development and commercialization of products to provide innovative health solutions to address critical unmet medical needs.
The shareholders of Neurochem Inc. approved the change of its name to "BELLUS Health Inc." at the annual and special shareholders' meeting on April 15, 2008. The new stock ticker symbols of the Company are BLUS (NASDAQ) and BLU (TSX).
The Management's Discussion and Analysis (MD&A) provides a review of the Company's operations, performance and financial position for the three- and six-month periods ended June 30, 2008, compared with the three- and six-month periods ended June 30, 2007. It should be read in conjunction with the Company's unaudited consolidated financial statements for the periods ended June 30, 2008, as well as the Company's audited consolidated financial statements for the year ended December 31, 2007, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP). For discussion regarding related-party transactions, contractual obligations, disclosure controls and procedures, internal control over financial reporting, critical accounting policies and estimates, recent accounting pronouncements, and risks and uncertainties, refer to the Annual Report and the Annual Information Form for the year ended December 31, 2007, as well as registration statements and other public filings, which are available on SEDAR at www.sedar.com or on EDGAR at www.sec.gov. This document contains forward-looking statements, which are qualified by reference to, and should be read together with the "Forward-Looking Statements" cautionary notice, which can be found at the end of this MD&A. This MD&A was prepared by Management with information available as at August 4, 2008.
As previously reported, effective July 1, 2007, the Company adopted the US dollar as its functional and reporting currency, as a significant portion of its revenue, expenses, assets, liabilities and financing are denominated in US dollars. All currency figures reported in this document, including comparative figures, are reported in US dollars, unless otherwise specified.
Results of operations
For the three-month period ended June 30, 2008, the net loss amounted to $12,706,000 ($0.26 per share), compared to $30,484,000 ($0.75 per share) for the corresponding period the previous year. For the six-month period ended June 30, 2008, the net loss amounted to $25,608,000 ($0.52 per share), compared to $51,500,000 ($1.30 per share) for the same period last year. The net loss for the periods ended June 30, 2007 included a non-cash accretion expense under Canadian GAAP of $10,430,000 relating to the $40 million 5% senior subordinated convertible notes issued in May 2007.
Revenue from collaboration agreement amounted to nil for the current quarter ($205,000 for the six-month period), compared to $312,000 for the same period the previous year ($685,000 for the six-month period). This revenue was earned under the agreement with Centocor, Inc. (Centocor) in respect of eprodisate (KIACTA(TM)), an oral investigational product candidate for the treatment of Amyloid A (AA) amyloidosis. During the first quarter of 2008, the Company announced its decision to continue the drug development program for eprodisate (KIACTA(TM)) and that it will initiate a second Phase III clinical trial for eprodisate (KIACTA(TM)) in close cooperation with the US Food and Drug Administration (FDA) and the European Medicines Agency (EMEA). The trial is expected to begin in the fourth quarter of 2008, with approximately 190 patients to be followed for a period of 24 months. As part of the decision, the Company withdrew its marketing applications for eprodisate (KIACTA(TM)) in the US, the European Union and Switzerland. On April 15, 2008, the Company announced that it had regained full ownership rights and control of eprodisate (KIACTA(TM)) from Centocor. During the current quarter, the refundable portion ($6,000,000) of the upfront payment received from Centocor in 2005 was refunded to Centocor.
Reimbursable costs revenue amounted to $47,000 for the current quarter ($69,000 for the six-month period), compared to $131,000 for the same period the previous year ($259,000 for the six-month period), and consisted of costs reimbursable by Centocor in respect of eprodisate (KIACTA(TM))-related activities. The Company earned no margin on these reimbursable costs. As the Company regained full ownership of this program from Centocor, these costs will no longer be reimbursable from Centocor in the future.
Research and development expenses, before research tax credits and grants, amounted to $7,123,000 for the current quarter ($15,903,000 for the six-month period), compared to $14,741,000 for the same period the previous year ($31,569,000 for the six-month period). The decrease in the current periods compared to the same periods the previous year is mainly attributable to a reduction in expenses incurred in relation to the development of tramiprosate (ALZHEMED(TM); homotaurine) for the treatment of Alzheimer's disease (AD), following the Company's decision in November 2007 to terminate the tramiprosate (ALZHEMED(TM)) pharmaceutical drug development program. Leveraging the many years of accumulated knowledge and the experience it has gained in developing tramiprosate (ALZHEMED(TM)) for the treatment of AD, BELLUS Health is in the process of prioritizing and accelerating the development of a prodrug of tramiprosate (ALZHEMED(TM)), a new chemical entity (NCE), for the treatment of AD. A prodrug is a pharmaceutical substance which is administered in an inactive form and, once absorbed into the body, is metabolized in vivo into its active form (in this case, tramiprosate).
The Company is also developing NC-503 (eprodisate) for the treatment of Type II diabetes and certain features of metabolic syndrome. A Phase II clinical trial in diabetic patients was launched in Canada and patient randomization commenced during the current quarter. The study is a 26-week, double-blind, placebo-controlled, randomized study. Interim results are anticipated in late 2008 or early 2009. Results from animal studies using a rat model of diabetes and metabolic syndrome have shown that NC-503 decreases the glycemic levels in obese diabetic Zucker rats, when compared to the control group, preserves 40% more pancreatic islet cells secreting insulin than in the control group, and protects kidney function.
The launch activities of VIVIMIND(TM) are in progress and the Company anticipates that the product will be launched in the third quarter of 2008. VIVIMIND(TM) is a patented, science-based natural health product shown to protect memory function and is based on the naturally occurring ingredient, homotaurine, found in certain seaweed. It is the direct result of over 15 years of significant scientific research, including clinical testing in over 2,000 individuals. Post-hoc analysis of the North American Phase III clinical trial of homotaurine (VIVIMIND(TM)) involving 1,052 AD patients showed a positive impact on cognitive function and anatomically it helped to reduce the volume loss of an important area of the brain responsible for memory. VIVIMIND(TM) will be commercialized by OVOS Natural Health Inc., a wholly owned subsidiary of BELLUS Health, created to launch evidence-based branded natural health products and to become a global industry leader in natural health products. Overall, BELLUS Health's strategy aims to provide revenue generation in the short- to medium-term through sale of natural health products and mid- to long-term development of a pipeline in pharmaceuticals.
Research tax credits and grants amounted to $467,000 this quarter ($864,000 for the six-month period), compared to $494,000 for the corresponding period the previous year ($1,000,000 for the six-month period). Research tax credits represent refundable tax credits earned under the Quebec Scientific Research and Experimental Development Program for expenditures incurred in Quebec. The decrease is mainly attributable to lower research and development expenses incurred in Quebec during the current periods which are eligible for refundable tax credits.
General and administrative expenses totaled $4,247,000 for the current quarter ($7,561,000 for the six-month period), compared to $3,165,000 for the same quarter the previous year ($6,625,000 for the six-month period). The increase is attributable to expenses incurred in relation to VIVIMIND(TM) pre-launch activities.
Reimbursable costs amounted to $47,000 for the current quarter ($69,000 for the six-month period), compared to $131,000 for the same period the previous year ($259,000 for the six-month period), and consisted of costs incurred on behalf of Centocor in respect of eprodisate (KIACTA(TM))-related activities and reimbursable by Centocor. As the Company regained full ownership of this program from Centocor, these costs will no longer be reimbursable from Centocor in the future.
Stock-based compensation amounted to $824,000 for the current quarter ($1,859,000 for the six-month period), compared to $933,000 for the corresponding quarter the previous year ($1,856,000 for the six-month period). This expense relates to stock options and stock-based incentives, whereby compensation cost in relation to stock options is measured at fair value at the date of grant and is expensed over the award's vesting period. The decrease in the current quarter is mainly due to lower fair value of new stock options granted during the current periods.
Interest income amounted to $213,000 for the current quarter ($711,000 for the six-month period), compared to $951,000 for the same quarter the previous year ($1,564,000 for the six-month period). The decrease is mainly attributable to lower average cash balances and lower interest rates during the current periods, compared to the same periods in the previous year.
Accretion expense amounted to $1,225,000 for the current quarter ($2,432,000 for the six-month period), compared to $12,115,000 for the same quarter the previous year ($13,116,000 for the six-month period). Accretion expense represents the imputed interest under GAAP on the $42,085,000 aggregate principal amount of 6% convertible senior notes issued in November 2006 (2006 Notes), as well as on the $40,000,000 6% senior convertible notes (Senior Notes) and $40,000,000 5% senior subordinated convertible notes (Junior Notes) issued in May 2007. The Company accretes the carrying values of the convertible notes to their face value through a charge to earnings over their expected life of 60 months, 54 months and 1 month, respectively. The decrease is mainly due to accretion expenses of $10,430,000 recorded during the second quarter of 2007 on the Junior Notes, which were fully converted during that quarter. As of June 30, 2008, $42,085,000 of the 2006 Notes remains outstanding as well as $4,500,000 of the Senior Notes. Refer to the Liquidity and Capital Resources section for more details on the convertible notes.
Change in fair value of embedded derivatives amounted to a gain of $58,000 for the current quarter (gain of $100,000 for the six-month period) compared to a loss of $1,870,000 for the same quarter the previous year (loss of $1,870,000 for the six-month period) and represents the variation in the fair value of the embedded derivatives, including the embedded derivative related to the $80,000,000 aggregate principal amount of Senior and Junior Notes issued in May 2007.