TORONTO, Nov. 9 /PRNewswire-FirstCall/ -- Hemosol Corp.
(NASDAQ:HMSLNASDAQ: TSX:NASDAQ:HML) today announced financial
results and review of operations for the third quarter ended
September 30, 2005. Unless otherwise stated, all dollar amounts
presented herein are in Canadian dollars. During the quarter the
Company successfully: - Scaled-up the Cascade to meet the
requirements for clinical trial activity and completed the design
of the Cascade's secondary processes which are key to both clinical
and commercial activity; - Established excellent working
relationships with potential key customers for Cascade products;
and - Received FDA guidance in two key areas - the Company
established the regulatory path for its planned IGIV product that
would have put it on track to file an Investigational New Drug
application ("IND") for a phase III clinical trial in April 2006.
Hemosol also obtained clear directions on the development of its
second generation hemoglobin- based oxygen carrier that would put
the Company on track for the necessary pre-clinical studies in
support of an IND for a phase I clinical trial; and - Advanced
discussions with several potential partners and investors for the
development of its pipeline products, notably its drug delivery
technology and a monoclonal antibody-based therapy intended for the
treatment of Epo, non-responsive anemia. "While the third quarter
was a period of significant technical and operational success it
has been a major disappointment in terms of securing the financial
resources the company needs to realize its potential," said Lee
Hartwell, President and CEO of Hemosol. "Despite significant
uncertainty surrounding the Company's immediate future, our belief
in the commercial potential of our therapeutic protein initiative
and our portfolio of pipeline products is stronger than ever. We
have conducted numerous runs of the Cascade technology and the
results have consistently exceeded our expectations. Similarly,
there have been significant advances in our pipeline which bodes
well for the licensing, partnering and independent funding
discussions underway." Both during the third quarter and subsequent
to quarter-end, the Company held several discussions with potential
investors in connection with its proposed private placement
financing but no commitments have been obtained to date. The
Company has also held discussions with several parties in
connection with potential strategic transactions but no commitments
have been obtained to date. No assurance can be given that the
Company will be able to complete any such transactions given its
current financial resources. The Company requires additional
capital shortly to continue as a going concern. The Company is now
in discussions with its secured creditors with respect to its
current financial position. In order to preserve cash and extend
the Company's ability to continue to seek a financing or strategic
transaction, it issued layoff notices to approximately two thirds
of its staff on October 28, 2005. As a result, the final
achievement dates for the milestones advanced during the quarter
are uncertain. The Company's reduced workforce and limited
resources have also caused Hemosol to suspend the provision of
bio-manufacturing services to third parties and, accordingly, the
Company and Organon Canada Ltd. reached a mutual agreement to
terminate the Manufacturing and Supply Agreement dated September
24, 2004. This termination is effective immediately and was
implemented without additional cost or penalty to either party.
Financial Results All amounts reflect the post-consolidation Common
Share numbers and post-consolidation Common Share price unless
otherwise noted. For the quarter ended September 30, 2005 the
Company had a net loss of $6.1 million or ($0.35) per share,
compared with a net loss for the quarter ended September 30, 2004
of $3.6 million or ($0.25) per share. Included in this quarter's
results were spending related to the Supply Agreement with Organon,
amortization of non-cash deferred charges of $0.2 million related
to ?nancing costs and additional depreciation of $1.0 million as a
result of the Company starting to amortize the technical equipment
it deemed available for use in the first quarter of 2005. These
costs were partially offset by the recording of minority interest
of $0.5 million, as a result from the 7% partnership interest held
by LPBP Inc. in Hemosol LP and $0.4 million of revenue related to
the Supply Agreement with Organon. The net loss for the quarter
ended September 30, 2004 included non-cash stock based compensation
expenses of $1.4 million offset by the reversal of a future tax
liability of $2.0 million related to the April 2004 Plan of
Arrangement primarily as a result of accumulated tax losses. Total
operating expenses increased from $5.6 million for the quarter
ended September 30, 2004 to $5.7 million for the quarter ended
September 30, 2005 an increase of $0.1 million, bringing operating
expenses for the nine months ended September 30, 2005 to $18.0
million compared with $13.6 million for the same period in the
prior year. This increase for the nine month period results from
the recording of an additional $3.1 million in depreciation for the
technical equipment that is now deemed available for use for
increased bio-manufacturing initiatives, specifically related to
the Supply Agreement with Organon, and increased activity in
support of the issuance of the Establishment License by Health
Canada which occurred on June 30, 2005. As of September 30, 2005
the Company had $0.8 million of cash and cash-equivalents. During
the quarter, the Company received approximately $1 million which
was released from an escrow account established as part of the Plan
of Arrangement completed on April 30, 2004. Scientific and process
development expenses increased from $3.3 million for the quarter
ended September 30, 2004, to $4.3 million for the quarter ended
September 30, 2005, an increase of $1.0 million. This brought
scientific and process development expenses for the nine months
ended September 30, 2005 to $13.9 million compared to $7.9 million
for the same period in the prior year. This increase was mainly due
to increased activity related to the Company's bio-manufacturing
initiatives, specifically related to the Supply Agreement with
Organon and costs related to the requisite validation and licensing
of the Meadowpine Facility by Health Canada. Included in this
amount is additional depreciation of approximately $3.1 million for
the technical equipment that is now deemed available for use.
Regulatory and clinical expenses decreased from $0.4 million for
the quarter ended September 30, 2004 to $0.2 million for the
quarter ended September 30, 2005, a decrease of $0.2 million. This
brought regulatory and clinical expense for the nine months ended
September 30, 2005 to $0.8 million compared with $1.0 million for
the same period in the prior year. These costs represent routine
baseline regulatory and clinical support activities. Administration
expenses decreased from $1.4 million for the quarter ended
September 30, 2004 to $1.2 million for the quarter ended September
30, 2005, a decrease of $0.2 million. This brought administration
expenses for the nine months ended September 30, 2005 to $2.6
million compared to $3.6 million for the same period in the prior
year. This decrease was due primarily to lower stock-based
compensation expense of $1.0 million in the current period.
Marketing and business development expenses decreased slightly for
the quarter ended September 30, 2005, a decrease of $0.4 million.
This brought marketing and business development expenses for the
nine months ended September 30, 2005 to $0.7 million compared with
$0.6 million for the same period in the prior year. This increase
primarily resulted from increased activity for business development
costs associated with the bio-manufacturing initiative and
partnering activities related to the drug development pipeline.
Notes to Financial Statements to Follow: The statements included
with this release should be read in conjunction with the applicable
notes, which can be found on the Company's website at
http://www.hemosol.com/. About Hemosol Hemosol is an integrated
biopharmaceutical developer and manufacturer of biologics,
particularly blood-related protein based therapeutics. For more
information visit Hemosol's website at http://www.hemosol.com/. The
Common Shares are listed on the NASDAQ Stock Market under the
trading symbol "HMSL" and on the TSX under the trading symbol
"HML". Certain statements concerning Hemosol's future prospects are
"forward- looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and other
applicable securities legislation. There can be no assurances that
future results will be achieved, and actual results could differ
materially from forecasts and estimates. Important factors that
could cause actual results to differ materially from forecasts and
estimates include, but are not limited to: Hemosol's ability to
successfully implement the Cascade technology and commercialize
products derived from that technology; Hemosol's ability to obtain
additional financing which is critical to the implementation of the
Cascade technology and to Hemosol's continued viability as a going
concern; Hemosol's ability to obtain regulatory approvals for its
products; Hemosol's ability to successfully complete clinical
trials for its products; Hemosol's ability to enter into
satisfactory arrangements for the supply of materials used in its
manufacturing operations and the sale of resulting products to
customers; technical, manufacturing or distribution issues; the
competitive environment for Hemosol's products and services; the
degree of market penetration of Hemosol's products; Hemosol's
ability to attract and retain clients for its bio-manufacturing
services; the risk that Hemosol may not become profitable; and
other factors set forth in filings with Canadian securities
regulatory authorities and the U.S. Securities and Exchange
Commission. These risks and uncertainties, as well as others, are
discussed in greater detail in the filings of Hemosol with Canadian
securities regulatory authorities and the U.S. Securities and
Exchange Commission. Hemosol makes no commitment to revise or
update any forward-looking statements in order to reflect events or
circumstances after the date any such statement is made. Hemosol
Corp. (A development stage company)(Incorporated under the laws of
Ontario) CONSOLIDATED STATEMENTS OF BALANCE SHEETS (unaudited and
not reviewed by the Company's external auditors.) See Note 2 -
Going Concern Uncertainty September 30 December 31 2005 2004 (in
thousands of dollars) $ $
-------------------------------------------------------------------------
ASSETS Current Cash and cash equivalents 815 4,230 Cash held in
escrow (note 7) - 1,000 Prepaids and other assets 499 366 Inventory
1,817 1,329
-------------------------------------------------------------------------
Total current assets 3,131 6,925
-------------------------------------------------------------------------
Property, plant and equipment, net (note 3) 78,986 83,104 Patents
and trademarks, net 1,081 1,164 License technology, net (note 4)
8,607 5,022 Deferred charges, net (note 5) 1,211 177
-------------------------------------------------------------------------
Total other assets 89,885 89,467
-------------------------------------------------------------------------
93,016 96,392
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and
accrued liabilities 2,850 2,538 Short-term portion of convertible
note (note 8c) 350 - Short-term debt (note 8d) - 20,000
-------------------------------------------------------------------------
Total current liabilities 3,200 22,538
-------------------------------------------------------------------------
Long-term debt (note 8d) 20,000 - Convertible note (note 8c) 3,862
- Minority interest 3,734 5,163
-------------------------------------------------------------------------
Total long term liabilities 27,596 5,163
-------------------------------------------------------------------------
Total liabilities 30,796 27,701
-------------------------------------------------------------------------
Shareholders' equity Common shares (notes 4 and 8a,b) 320,294
311,711 Equity portion related to convertible note (note 8c) 1,453
- Warrants and options (notes 6 and 8a,b,c) 16,427 14,080
Contributed surplus 9,125 9,125 Deficit (285,079) (266,225)
-------------------------------------------------------------------------
Total shareholders' equity 62,220 68,691
-------------------------------------------------------------------------
93,016 96,392
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes On behalf of the Board: Edward E. McCormack
Lee Hartwell Chairman Director and Chief Executive Officer Hemosol
Corp. (A development stage company)(Incorporated under the laws of
Ontario) CONSOLIDATED STATEMENTS OF LOSS (unaudited and not
reviewed by the Company's external auditors.) See Note 2 - Going
Concern Uncertainty Three months ended Nine months ended September
30 September 30 (in thousands of dollars 2005 2004 2005 2004 except
per share data) $ $ $ $
-------------------------------------------------------------------------
REVENUE Product sales 372 - 372 - EXPENSES Cost of goods sold 216 -
216 - Research and development Scientific and process (note 3)
4,083 3,298 13,652 7,855 Regulatory and clinical 234 354 809 1,007
Administration 1,183 1,446 2,640 3,614 Marketing and business
development 240 284 690 597 Support services 141 224 466 485
Foreign currency translation (gain) loss (28) (3) (90) 6
-------------------------------------------------------------------------
Loss from operations 5,697 5,603 18,011 13,564 Amortization of
deferred charges (note 5) 225 115 818 1,823 Interest income (5)
(44) (65) (128) Interest expense 394 242 1,084 746 Net gain on
Arrangement - - - (6,838) Accretion in carrying value of
convertible note (note 8c) 211 - 385 -
-------------------------------------------------------------------------
Loss before minority interest and income taxes 6,522 5,916 20,233
9,167 Minority interest (461) (424) (1,429) (680) Provision for
(recovery of) income taxes Current 20 50 50 150 Future - (1,946) -
(2,975)
-------------------------------------------------------------------------
Net loss for the period 6,081 3,596 18,854 5,662
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted loss per share 0.35 0.25 1.14 0.40
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of common shares outstanding (000's) 17,590
14,286 16,604 14,123
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes CONSOLIDATED STATEMENTS OF DEFICIT
(unaudited) Three months ended Nine months ended September 30
September 30 2005 2004 2005 2004 (in thousands of dollars) $ $ $ $
-------------------------------------------------------------------------
Deficit, beginning of period 278,998 258,143 266,225 253,177 Net
loss for the period 6,081 3,596 18,854 5,662 Distribution - - -
2,900
-------------------------------------------------------------------------
Deficit, end of period 285,079 261,739 285,079 261,739
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes Hemosol Corp. (A development stage
company)(Incorporated under the laws of Ontario) CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited and not reviewed by the
Company's external auditors.) See Note 2 - Going Concern
Uncertainty Three months ended Nine months ended September 30
September 30 2005 2004 2005 2004 (in thousands of dollars) $ $ $ $
-------------------------------------------------------------------------
OPERATING ACTIVITIES Net loss for the period (6,081) (3,596)
(18,854) (5,662) Add (deduct) items not involving cash Amortization
of property, plant and equipment 1,457 536 4,581 1,646 Amortization
of license technology 165 100 415 187 Amortization of patents and
trademarks 27 28 83 98 Amortization of deferred charges 225 115 818
1,823 Stock-based compensation 120 1,411 304 2,464 Accretion in
carrying value of convertible note (note 8d) 211 - 385 - Future
income taxes - (1,946) - (2,975) Minority interest (461) (424)
(1,429) (680) Net gain on arrangement - - - (6,838) Foreign
currency translation (gain) loss - 3 - (6)
-------------------------------------------------------------------------
(4,337) (3,773) (13,697) (9,943) Net change in non-cash working
capital balances related to operations 348 369 (311) (1,630)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash used in operating activities (3,989) (3,404) (14,008) (11,573)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INVESTING ACTIVITIES Patents and trademark costs - - - (4) Purchase
of property, plant and equipment (8) (169) (463) (424) Purchase of
license technology - - (1,070) (1,502) Proceeds from Arrangement,
net of transaction cost - - - 12,898 Purchase of short term
investments - 6,965 - -
-------------------------------------------------------------------------
Cash provided by (used in) investing activities (8) 6,796 (1,533)
10,968
-------------------------------------------------------------------------
FINANCING ACTIVITIES Proceeds on issuance of common shares,
warrants and options (note 8b) - - 6,118 180 Issuance of
convertible debentures (note 8c) - - 5,633 - Increase in deferred
charges - - (625) - Proceeds from bulge facility (note 8d) - - 500
- Payment of bulge facility (note 8d) - - (500) - Cash released
from escrow 1,000 - 1,000 448
-------------------------------------------------------------------------
Cash provided by financing activities 1,000 - 12,126 628
-------------------------------------------------------------------------
Effect of exchange rates on cash and cash equivalents - (3) - 6
-------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents during the
period (2,997) 3,389 (3,415) 29 Cash and cash equivalents,
beginning of period 3,812 4,765 4,230 8,125
-------------------------------------------------------------------------
Cash and cash equivalents, end of period 815 8,154 815 8,154
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes DATASOURCE: Hemosol Corp. CONTACT: Jason
Hogan, Investor & Media Relations, (416) 361-1331,
800-789-3419, (416) 815-0080 fax, , http://www.hemosol.com/; To
request a free copy of this organization's annual report, please go
to http://www.newswire.ca/ and click on Tools for Investors.
Copyright
Hemosol (NASDAQ:HMSL)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Hemosol (NASDAQ:HMSL)
Historical Stock Chart
Von Mai 2023 bis Mai 2024