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Read More...Friday 26th May 2006
NeuroMedix announces second quarter fiscal 2006 financial results
TORONTO, May 26 /CNW/ - NeuroMedix Inc. ("NeuroMedix" or the "Company") (TSXV: NMX) today announced its financial results for the quarter ended March 31, 2006.
During the six-month period ended March 31, 2006, NeuroMedix:
- Completed its initial public offering ("IPO");
- Commenced trading on the TSX Venture Exchange under the symbol, "NMX"; and
- Strengthened its management team.
Subsequent to March 31, 2006, NeuroMedix achieved the following milestones:
- Commenced cGMP manufacturing program for Minozac, our lead product for Alzheimer's disease ("Alzheimer's") and related neurological disorders;
- Extended GLP pre-clinical toxicology studies, required for regulatory approval of clinical trial initiation; and
- Demonstrated that Minozac reduces brain proinflammatory cytokine production and loss of cognitive function in an animal model of traumatic brain injury ("TBI").
This six month period has been instrumental in our progress towards clinical trials. In January 2006, we completed our IPO which raised gross proceeds of $3.3 million through the issuance of 13,200,000 common shares at $0.25, and commenced trading on the TSX-V. We then commenced manufacturing of cGMP Minozac, and extended GLP pre-clinical toxicology studies, required for regulatory approval of clinical trial initiation.
The mechanism of action for Minozac is to suppress excessive proinflammatory cytokine production in the brain, shown to be important in disease progression for Alzheimer's. Excessive proinflammatory cytokine production is also part of disease progression in TBI, and in fact the presence of prior TBI is a risk factor for the later onset of Alzheimer's. Based on these data, Minozac has the potential not only to alter disease progression in Alzheimer's but also to reduce the impact of Alzheimer's risk factors such as TBI. In May 2006, NeuroMedix announced data demonstrating that Minozac is effective in reducing proinflammatory cytokine production in an animal model of TBI and in preventing the cognitive deficit that generally results from such injury.
"We are very excited by this new indication and the additional validation this provides for our lead compound Minozac," said Dr. Mark L. Pearson, Chief Executive Officer of NeuroMedix. "There are currently no safe drugs known that both specifically suppress the cytokine-mediated proinflammatory response in the brain and are effective in the treatment of this brain injury. Therefore, in addition to Alzheimer's, we believe TBI could represent a very large market for Minozac."
Technology Overview
NeuroMedix's technology, which was licensed from Northwestern University, is based on a proprietary class of small molecules discovered by a team of leading experts in the field of neuroinflammation. Neuroinflammation is increasingly recognized as the underlying basis for a broad range of neurodegenerative diseases including Alzheimer's, TBI, neuropathic pain, age-related macular degeneration, Parkinson's disease and multiple sclerosis.
NeuroMedix's technology received further validation in January 2006, with the publication of a scientific article entitled "Glia as a therapeutic target: selective suppression of human Abeta-induced regulation of brain proinflammatory cytokine production attenuates neurodegeneration" in the Journal of Neuroscience by Drs. Martin Watterson and Linda Van Eldik, the inventors of NeuroMedix's technology, and their team at Northwestern University. This article supports the neuroinflammatory hypothesis of disease progression in Alzheimer's and offers hope that the reversal of this progression by targeting glia-based cytokine production may offer a truly novel approach to treating Alzheimer's.
NeuroMedix is currently focused on advancing Minozac into clinical trials. NeuroMedix expects to complete the GLP pre-clinical toxicology studies in the fourth quarter of calendar 2006, after which it expects to file an Investigational New Drug ("IND") application to initiate a Phase I clinical trial in healthy volunteers. NeuroMedix will also continue to look for additional ways to create value. Based on Minozac's mechanism of action, NeuroMedix is currently investigating additional disease indications, including neuropathic pain, age-related macular degeneration and multiple sclerosis.
Financial Review
For the three-month period ended March 31, 2006, NeuroMedix recorded a net loss of $214,849, which amounts to a loss of $0.01 per common and Class B share for the period. For the six-month period ended March 31, 2006, NeuroMedix recorded a net loss of $426,896, which amounts to a loss of $0.02 per common and Class B share for the period. The losses are reflective of costs associated with research contracts, intellectual property development, consulting expenses, manufacturing process development, employee expenses and general administrative costs.
Research and development expenses were $94,626 for the three-month period ended March 31, 2006 and $214,003 for the six-month period ended March 31, 2006. NeuroMedix's research and development expenses for these periods consisted primarily of fees paid to external service providers for items such as research, research management, manufacturing process development and intellectual property as well as some internal employee expenses.
General and administrative expenses were $132,809 for the three-month period ended March 31, 2006 and $224,603 for the six-month period ended March 31, 2006. NeuroMedix's general and administrative expenses for these periods consisted primarily of payroll, legal, accounting, tax, and consulting fees, board compensation, regulatory and reporting costs and general office expenses.
On January 24, 2006, under the terms of an agency agreement, the Company issued 13,200,000 common shares, including the exercise of the over- allotment option (the "Offering"), at a price per share of $0.25 for gross proceeds of $3,300,000. The net proceeds of this Offering were $2,746,618, net of issue expenses and agent's commissions of $553,382. NeuroMedix believes that it has adequate financial resources to meet anticipated expenditures until the first quarter of calendar 2007.
Since the Company's IPO in January, it has become apparent to the Company that as a result of a lack of toxicity at much higher than therapeutic doses, the Company will be required to produce more cGMP material than previously anticipated. In addition, the number of pre-clinical toxicity studies required by the FDA will be greater than anticipated. As a result of both of these issues, the Company now anticipates that the funds raised in the Company's IPO will be sufficient for the Company to complete cGMP manufacturing and the pre-clinical toxicology program for Phase I and to file the IND, but that the funds will not be sufficient to complete a Phase I study or to begin Phase II clinical studies. The Company is currently addressing the need for additional funds to support these studies.
About NeuroMedix:
NeuroMedix is a biotechnology company focused on the development of therapeutic agents for the treatment of degenerative and inflammatory diseases of the central nervous system, such as Alzheimer's disease, traumatic brain injury, neuropathic pain, age-related macular degeneration and multiple sclerosis. Our therapeutic drug candidates are based on research from a team of leading experts in the field of neuroinflammation at Northwestern University and have been demonstrated to reduce brain inflammation, to protect neuronal cells, and to prevent the loss of cognitive function in an Alzheimer's disease animal model in mice. Our lead candidate, Minozac has also been shown to reduce inflammation and prevent loss of cognitive function in mice suffering traumatic brain injury. Based on these findings, NeuroMedix is pursuing the development of its lead compound for Alzheimer's disease and traumatic brain injury in humans. NeuroMedix's shares are listed on the TSX Venture Exchange under the symbol "NMX".
Financial Information to follow:
NeuroMedix Inc.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, September 30,
2006 2005
$ $
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ASSETS
Current
Cash and cash equivalents 2,493,354 18,099
Receivables 9,374 4,611
Deposits on collaborations - 26,051
Deferred financing costs - 17,625
Prepaid expenses 59,257 12,500
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Total current assets 2,581,985 78,886
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Property and equipment, net 11,657 2,451
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2,593,642 81,337
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 231,234 51,776
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Total liabilities 231,234 51,776
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Shareholders' equity
Share capital
Common shares 2,746,619 1
Class B shares 491,968 491,968
Contributed surplus 13,125 -
Deficit (889,304) (462,408)
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Total shareholders' equity 2,362,408 29,561
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2,593,642 81,337
Commitments
Guarantees
-------------------------------------------------------------------------
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NeuroMedix Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
(Unaudited)
Period from
Six-month Three-month February 11,
period ended period ended 2005 Cumulative
March 31, March 31, to March 31, from
2006 2006 2005 inception
$ $ $ $
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EXPENSES
Research and
development 214,003 94,626 - 621,785
General and
administrative 224,603 132,809 - 279,341
Interest expense 1,133 547 - 1,133
Foreign exchange
gain (701) (486) - (701)
Amortization 1,144 637 - 1,403
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440,182 228,133 - 902,961
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Loss before the
following (440,182) (228,133) - (902,961)
Interest income 13,286 13,284 - 13,657
-------------------------------------------------------------------------
Net loss for the
period (426,896) (214,849) - (889,304)
Deficit, beginning
of period (462,408) (674,455) - -
-------------------------------------------------------------------------
Deficit, end of
period (889,304) (889,304) - (889,304)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted
net loss per
common and
Class B share $0.02 $0.01 $-
-------------------------------------------------------------------------
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Weighted average
common and
Class B shares
outstanding 21,909,341 26,876,667 10,800,000
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NeuroMedix Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Period from
Six-month Three-month February 11,
period ended period ended 2005 Cumulative
March 31, March 31, to March 31, from
2006 2006 2005 inception
$ $ $ $
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss for the
period (426,896) (214,849) - (889,304)
Add items not
involving cash
Amortization 1,144 637 - 1,403
Stock-based
compensation
expense 13,125 6,188 - 13,125
Write-off of
receivable 8,153 8,153 - 8,153
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(404,474) (199,871) - (866,623)
Changes in
non-cash working
capital items 143,461 (33,535) (1) 134,450
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Cash used in
operating
activities (261,013) (233,406) (1) (732,173)
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of
property and
equipment (10,350) (1,725) - (13,060)
-------------------------------------------------------------------------
Cash used in
investing
activities (10,350) (1,725) - (13,060)
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FINANCING ACTIVITIES
Proceeds from
issuance of
common shares,
net 2,746,618 2,746,618 1 2,746,619
Proceeds from
issuance of
Class B shares,
net - - - 491,968
Increase in
promissory note 51,133 547 - 51,133
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Repayment of
promissory note (51,133) (51,133) - (51,133)
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Cash provided by
financing
activities 2,746,618 2,696,032 1 3,238,587
-------------------------------------------------------------------------
Net increase in
cash during the
period 2,475,255 2,460,901 - 2,493,354
Cash, beginning
of period 18,099 32,453 - -
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Cash, end of
period 2,493,354 2,493,354 - 2,493,354
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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Except for historical information, this press release may contain forward-looking statements, which reflect the Company's current expectation regarding future events. These forward-looking statements
involve risks and uncertainties, which may include but are not limited to, changing market conditions, the successful and timely completion of
clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties
related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.
For further information visit www.neuromedixinc.com or contact:
Mark Pearson, PhD.
Chief Executive Officer
NeuroMedix Inc.
425-503-5156
mark@neuromedixinc.com
or
Catherine Auld, CA
Chief Financial Officer
NeuroMedix Inc.
416-673-8190
cathy@neuromedixinc.com
