TORONTO, Oct. 9, 2015 (GLOBE NEWSWIRE) --
Intellipharmaceutics International Inc.
(NASDAQ:IPCI) (TSX:I) ("Intellipharmaceutics" or the "Company"), a
pharmaceutical company specializing in the research, development
and manufacture of novel and generic controlled-release and
targeted-release oral solid dosage drugs, today reported the
results of operations for the three and nine months ended August
31, 2015. All dollar amounts referenced herein are in United States
dollars unless otherwise noted.
During the three months ended August 31, 2015, the Company
continued its focus on the development of its specialty drug
product candidates Rexista™ Oxycodone XR and Regabatin™ XR.
Considerable progress was made towards satisfying the requirements
to file a New Drug Application ("NDA") for Rexista™ Oxycodone XR
with the United States Food and Drug Administration ("FDA") and the
Company plans to complete this filing in the first half of 2016.
Regarding Regabatin™ XR, based on positive feedback and guidance
from the FDA the Company submitted an Investigational New Drug
Application ("IND") in August 2015.
Revenue related to the Company's license and commercialization
agreement with Par Pharmaceutical, Inc. ("Par") in the three months
ended August 31, 2015, was $0.8 million versus $1.1 million for the
three months ended August 31, 2014. As the first-filer for generic
Focalin XR® (dexmethylphenidate hydrochloride extended-release)
capsules in the 15 mg strength, the Company had 180 days (up to May
19, 2014) of exclusivity of sales for that strength from the date
of launch on November 19, 2013 in the United States by our partner,
Par. The lower revenue in the third quarter of 2015 was in large
part a result of a softening of pricing conditions and market
share, consistent with industry post-exclusivity experience and to
a lesser extent, seasonality. These products are indicated for
conditions including attention deficit hyperactivity disorder which
we expect may see increases in prescription rates during the school
term and declines in prescription rates during the summer months.
During the quarter ended August 31, 2015 we held a combined market
share of 43% of total generic prescriptions dispensed for the 15 mg
and 30 mg strengths, more than double our nearest generic
competitor.
The Company recorded net loss for the three months ended August
31, 2015 of $1.9 million or $0.08 per common share, compared
with a net loss of $1.7 million or $0.07 per common share for the
three months ended August 31, 2014. The net loss for the three
months ended August 31, 2015, is higher than the comparable prior
period primarily due to the lower revenues for the third quarter of
2015 as explained above. During the three months ended August
31, 2015, the net loss is attributed to the ongoing R&D and
selling, general and administrative expenses, including an increase
in bio-studies, partially offset by licensing revenues from
commercial sales of generic Focalin XR® (dexmethylphenidate
hydrochloride extended-release) capsules. During the three
months ended August 31, 2014, the net loss is attributed to the
ongoing R&D and selling, general and administrative expense,
and salary increases to certain non-management employees; partially
offset by licensing and milestone revenue.
Intellipharmaceutics CEO Dr. Isa Odidi commented, "Subsequent to
the FDA's final decision regarding our tentatively approved
strengths of generic Focalin XR® (dexmethylphenidate hydrochloride
extended-release) capsules, the Company is actively addressing the
requirements in order to meet the newly imposed conditions for
bioequivalence. We are also pleased with the progress made
during the quarter in respect of our specialty new drug candidates
Rexista™ Oxycodone XR and Regabatin™ XR, consistent with our
renewed focus on new product candidates with 505(b)(2)
potential."
Research and development ("R&D") expenditures in the three
months ended August 31, 2015 were $1.7 million, which were
comparable to $1.7 million in the three month period ended August
31, 2014. The Company incurred increased expenses on furthering
R&D activities of several generic and NDA 505(b)(2) new product
candidates (RexistaTM Oxycodone XR and RegabatinTM XR), offset by
lower expenses on stock options and the U.S. dollar strengthening
by 17% versus the Canadian dollar (local salaries are paid in
Canadian funds) relative to the prior period.
Selling, general and administrative expenses were $0.8 million
for the three months ended August 31, 2015 in comparison to $0.9
million for the three months ended August 31, 2014. The
decrease is primarily due to strengthening of the U.S. dollar by
17% versus the Canadian dollar in the third quarter of 2015,
relative to the three months ended August 31, 2014. In
particular, the stronger US dollar had a positive impact on local
wages and salaries and administrative costs, partially offset by
higher marketing costs.
The Company had cash of $2.8 million as at August 31, 2015
compared to $3.0 million as at May 31, 2015. The decrease in cash
during the three months ended August 31, 2015 is mainly a result of
lower cash receipts relating to commercial sales of our generic
Focalin XR® (dexmethylphenidate hydrochloride extended-release)
capsules, an increase in cash flows provided from financing
activities which are mainly from common share sales under the
Company's at-the-market offering program, partially offset by an
increase in purchases of production, laboratory and computer
equipment. We believe our current cash position is sufficient to
fund our currently projected operations to January 2016.
For the three months ended August 31, 2015, cash flows used in
operating activities decreased to $1.2 million as compared to cash
flows used in operating activities for the three months ended
August 31, 2014 of $1.4 million. The August 31, 2015, decrease was
due to the receipt of approximately $1.0 million, compared to $1.6
million, as our payment relating to commercial sales of Focalin XR®
(dexmethylphenidate hydrochloride extended-release) capsules by Par
under the Par agreement for the period April 1 to June 30, 2015 and
April 1, 2014 to June 30, 2014, respectively.
For the three months ended August 31, 2015, net cash flows
provided from financing activities of $1.2 million, related
principally to at-the-market issuances of 218,300 of our common
shares sold on NASDAQ for gross proceeds of $0.7 million and net
proceeds of $0.7 million, as well as $0.6 million related to the
exercise of warrants, partially offset by capital lease and
financing cost payments.
Corporate highlights
- In May 2015, the Company announced that the FDA had provided
the Company with notification regarding its IND submission for
Rexista™ Oxycodone XR (Abuse Deterrent oxycodone hydrochloride)
extended release tablets indicating that the Company will not be
required to conduct Phase III studies if bioequivalence to
Oxycontin® is demonstrated. The Company believes, in light of
previously announced results of the three definitive Phase I
pharmacokinetic trials, that it will not be required to conduct
Phase III studies, although no assurance to that effect can be
given. In May 2015, the Company also announced that the FDA
had reviewed the Company's request for Fast Track designation for
its Rexista™ Oxycodone XR (Abuse deterrent oxycodone
hydrochloride)) extended-release tablets development program
incorporating its Paradoxical OverDose Resistance Activating System
("PODRAS™") and had concluded that it meets the criteria for Fast
Track designation. The designation mandates the FDA to
facilitate the development and expedite the review of drugs
intended to treat serious or life threatening conditions and that
demonstrate the potential to address unmet medical
needs. During the quarter ended August 31, 2015, the Company
continued to work towards satisfying the requirements to file an
NDA for Rexista™ Oxycodone XR (Abuse Deterrent oxycodone
hydrochloride) extended release tablets with the FDA and plans to
complete this filing in the first half of 2016, although no
assurance to this effect can be given.
- The Company previously reported that the FDA had accepted a
Pre-Investigational New Drug ("Pre-IND") meeting request for its
once-a-day Regabatin™ XR non-generic controlled release version of
pregabalin under the NDAs 505(b)(2) regulatory pathway, with a view
to possible commercialization in the United States at some time
following the December 30, 2018 expiry of the patent covering the
pregabalin molecule. Based on positive feedback and guidance from
the FDA, the Company submitted an IND for RegabatinTM XR in August
2015.
- In June 2015, the Company announced that the FDA had indicated
that the Company's tentatively-approved strengths of its generic
Focalin XR® (dexmethylphenidate hydrochloride extended-release)
capsules would have to meet newly-imposed conditions for
bioequivalence prior to receiving final approval. The strengths
affected were 5 mg, 10 mg, 20 mg and 40 mg. The already-approved 15
mg and 30 mg strengths now in the market were not affected. In July
2015, the FDA indicated to the Company that it had rescinded its
previous requirement that the Company meet the newly-imposed
conditions for bioequivalence prior to receiving final approval for
the Company's tentatively-approved strengths of its generic Focalin
XR®. In August 2015, the Company announced that the FDA reinstated
its previously-imposed (and subsequently rescinded) requirement
that the Company's tentatively-approved strengths of its generic
Focalin XR® (dexmethylphenidate hydrochloride extended-release)
capsules would have to meet new conditions for bioequivalence prior
to receiving final approval. The Company will be required to
demonstrate bio-equivalence with Focalin XR ® for the 40 mg
strength under fed conditions as the basis for approval of each of
the 5 mg, 10 mg, 20 mg and 40 mg affected strengths. The
already-approved 15 mg and 30 mg strengths of the Company's generic
Focalin XR® (dexmethylphenidate hydrochloride extended-release)
capsules now in the market are not affected. The Company is
actively addressing the FDA requirements but cannot reasonably
estimate when it will refile with the FDA.
There can be no assurance that the Fast Track designation for
RexistaTM Oxycodone XR will translate to a faster development and
review process with the FDA, that our tentatively-approved
strengths of generic Focalin XR® will be granted final FDA approval
or sold commercially, that we will be successful in submitting any
additional Abbreviated New Drug Applications ("ANDAs"), Abbreviated
New Drug Submissions ("ANDSs") or NDAs with the FDA or similar
applications with Health Canada, that the FDA or Health Canada will
approve any of our current or any future product candidates for
sale in the U.S. market and Canadian market, or that they will ever
be successfully commercialized and produce significant revenue for
us.
About Intellipharmaceutics
Intellipharmaceutics International Inc. is a pharmaceutical
company specializing in the research, development and manufacture
of novel and generic controlled-release and targeted-release oral
solid dosage drugs. The Company's patented Hypermatrix™ technology
is a multidimensional controlled-release drug delivery platform
that can be applied to the efficient development of a wide range of
existing and new pharmaceuticals. Based on this technology
platform, Intellipharmaceutics has developed several drug delivery
systems and a pipeline of products (our dexmethylphenidate
hydrochloride extended-release capsules for the 15 and 30 mg
strengths which received final FDA approval) and product candidates
in various stages of development, including ANDAs filed with the
FDA (and one ANDS filed with Health Canada) in therapeutic areas
that include neurology, cardiovascular, gastrointestinal tract,
diabetes and pain.
Intellipharmaceutics also has NDA 505(b)(2) specialty drug
product candidates in its development pipeline. These include
Rexista™ Oxycodone XR, an abuse deterrent oxycodone based on its
proprietary nPODDDS™ novel Point Of Divergence Drug Delivery System
and PODRAS™ Paradoxical OverDose Resistance Activating System, and
Regabatin™ XR pregabalin extended-release capsules. Our current
development effort is increasingly directed towards improved
difficult-to-develop controlled-release drugs which follow an NDA
505(b)(2) regulatory pathway. The Company has increased its R&D
emphasis towards new product development, facilitated by the
505(b)(2) regulatory pathway, by advancing the product development
program for both Rexista™ and Regabatin™. The 505(b)(2)
pathway (which relies in part upon the approving agency's findings
for a previously approved drug) both accelerates development
timelines and reduces costs in comparison to NDAs for new chemical
entities. An advantage of our strategy for development of NDA
505(b)(2) drugs is that our product candidates can, if approved for
sale by the FDA, potentially enjoy an exclusivity period which may
provide for greater commercial opportunity relative to the generic
ANDA route.
Certain statements in this document constitute "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and/or "forward-looking
information" under the Securities Act (Ontario). These statements
include, without limitation, statements expressed or implied
regarding our plans, goals and milestones, status of developments
or expenditures relating to our business, plans to fund our current
activities, statements concerning our partnering activities, health
regulatory submissions, strategy, future operations, future
financial position, future sales, revenues and profitability,
projected costs, and market penetration. In some cases, you can
identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "plans to," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue,"
"intends," "could," or the negative of such terms or other
comparable terminology. We made a number of assumptions in the
preparation of our forward-looking statements. You should not place
undue reliance on our forward-looking statements, which are subject
to a multitude of known and unknown risks and uncertainties that
could cause actual results, future circumstances or events to
differ materially from those stated in or implied by the
forward-looking statements. Risks, uncertainties and other factors
that could affect our actual results include, but are not limited
to, the effects of general economic conditions, securing and
maintaining corporate alliances, our estimates regarding our
capital requirements, and the effect of capital market conditions
and other factors, including the current status of our product
development programs, on capital availability, the potential
dilutive effects of any future financing and the expected use of
any proceeds from any offering of our securities, our ability to
maintain compliance with the continued listing requirements of the
principal markets on which our securities are traded, our programs
regarding research, development and commercialization of our
product candidates, the timing of such programs, the timing, costs
and uncertainties regarding obtaining regulatory approvals to
market our product candidates and the difficulty of predicting the
timing and results of any product launches, and the timing and
amount of any available investment tax credits, the actual or
perceived benefits to users of our drug delivery technologies,
products and product candidates as compared to others, our ability
to establish and maintain valid and enforceable intellectual
property rights in our drug delivery technologies, products and
product candidates, the scope of protection provided by
intellectual property for our drug delivery technologies, products
and product candidates, the actual size of the potential markets
for any of our products and product candidates compared to our
market estimates, our selection and licensing of products and
product candidates, our ability to attract distributors and
collaborators with the ability to fund patent litigation and with
acceptable development, regulatory and commercialization expertise
and the benefits to be derived from such collaborative efforts,
sources of revenues and anticipated revenues, including
contributions from distributors and collaborators, product sales,
license agreements and other collaborative efforts for the
development and commercialization of product candidates, our
ability to create an effective direct sales and marketing
infrastructure for products we elect to market and sell directly,
the rate and degree of market acceptance of our products, delays
that may be caused by changing regulatory requirements, the
difficulty in predicting the timing of regulatory approval and the
timing of launch of competitive products, the difficulty of
predicting the impact of competitive products on volume and
pricing, the inability to forecast wholesaler demand and/or
wholesaler buying patterns, the seasonal fluctuation in the numbers
of prescriptions written for our dexmethylphenidate hydrochloride
extended-release capsules which may produce substantial
fluctuations in revenues, the timing and amount of insurance
reimbursement for our products, changes in the laws and
regulations, including Medicare and Medicaid, affecting among other
things, pricing and reimbursement of pharmaceutical products, the
success and pricing of other competing therapies that may become
available, our ability to retain and hire qualified employees, the
availability and pricing of third party sourced products and
materials, difficulties or delays in manufacturing, the
manufacturing capacity of third-party manufacturers that we may use
for our products, the successful compliance with FDA, Health Canada
and other governmental regulations applicable to the Company and
its third party manufacturers' facilities, products and/or
businesses, difficulties, delays or changes in the FDA approval
process or test criteria for ANDAs and NDAs and risks associated
with cyber-security and vulnerability of the Company's digital
information and the digital information of the Company's
commercialization partner(s). Additional risks and uncertainties
relating to the Company and our business can be found in the "Risk
Factors" section of our latest annual information form, our latest
Form 20-F, and our latest Form F-3 (including any documents forming
a part thereof or incorporated by reference therein), as well as in
our reports, public disclosure documents and other filings with the
securities commissions and other regulatory bodies in Canada and
the U.S., which are available on www.sedar.com and www.sec.gov. The
forward-looking statements reflect our current views with respect
to future events and are based on what we believe are reasonable
assumptions as of the date of this document, and we disclaim any
intention and have no obligation or responsibility, except as
required by law, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Nothing contained in this document should be construed to imply
that the results discussed herein will necessarily continue or that
any conclusion reached herein will necessarily be indicative of
actual operating results of the Company.
The condensed unaudited interim consolidated financial
statements, accompanying notes to the condensed unaudited interim
consolidated financial statements, and Management Discussion and
Analysis for the three and nine months ended August 31, 2015 will
be accessible on Intellipharmaceutics' website at
www.intellipharmaceutics.com and will be available on SEDAR
and EDGAR.
Summary financial tables are provided
below.
Intellipharmaceutics
International Inc. |
Condensed unaudited interim
consolidated balance sheets |
As at |
(Stated in U.S.
dollars) |
|
August 31, |
November 30, |
|
2015 |
2014 |
|
$ |
$ |
|
|
|
Assets |
|
|
Current |
|
|
Cash |
2,819,101 |
4,233,975 |
Accounts receivable |
512,605 |
1,011,133 |
Investment tax credits |
388,194 |
324,986 |
Prepaid expenses, sundry
and other assets |
286,843 |
414,663 |
|
4,006,743 |
5,984,757 |
|
|
|
Deferred offering costs |
504,631 |
271,381 |
Property and equipment, net |
1,708,097 |
1,618,897 |
|
6,219,471 |
7,875,035 |
|
|
|
Liabilities |
|
|
Current |
|
|
Accounts payable |
1,394,625 |
668,069 |
Accrued liabilities |
581,595 |
675,487 |
Employee costs
payable |
135,040 |
181,204 |
Current portion of capital
lease obligations |
20,215 |
21,449 |
Deferred revenue |
150,000 |
-- |
Convertible
debenture |
1,575,084 |
1,377,302 |
|
3,856,559 |
2,923,511 |
|
|
|
Capital lease obligations |
21,295 |
42,160 |
|
3,877,854 |
2,965,671 |
|
|
|
Shareholders'
equity |
|
|
Capital stock |
|
|
Authorized |
|
|
Unlimited common
shares without par value |
|
Unlimited preference
shares |
|
|
Issued and outstanding |
|
|
24,073,611 common
shares |
21,178,073 |
18,941,067 |
(2014 - 23,456,611) |
|
|
Additional paid-in capital |
30,618,777 |
31,119,930 |
Accumulated other comprehensive income |
284,421 |
284,421 |
Accumulated deficit |
(49,739,654) |
(45,436,054) |
|
2,341,617 |
4,909,364 |
Contingencies |
|
|
|
6,219,471 |
7,875,035 |
|
|
|
Intellipharmaceutics
International Inc. |
Condensed unaudited interim
consolidated statements of operations and comprehensive loss |
|
|
|
|
|
(Stated in U.S. dollars) |
|
Three months ended |
Nine months ended |
|
August 31, 2015 |
August 31, 2014 |
August 31, 2015 |
August 31, 2014 |
|
$ |
$ |
$ |
$ |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
Licensing |
840,748 |
1,072,703 |
3,248,678 |
6,878,550 |
Milestone |
-- |
-- |
-- |
354,153 |
|
840,748 |
1,072,703 |
3,248,678 |
7,232,703 |
|
|
|
|
|
Expenses |
|
|
|
|
Research and
development |
1,676,549 |
1,693,549 |
4,288,624 |
6,413,834 |
Selling, general and
administrative |
816,267 |
857,788 |
2,664,369 |
2,960,054 |
Depreciation |
97,796 |
106,022 |
270,829 |
263,811 |
|
2,590,612 |
2,657,359 |
7,223,822 |
9,637,699 |
|
|
|
|
|
Loss from operations |
(1,749,864) |
(1,584,656) |
(3,975,144) |
(2,404,996) |
Net foreign exchange gain (loss) |
10,626 |
(10,659) |
33,723 |
27,375 |
Interest income |
1,481 |
1,805 |
1,498 |
3,193 |
Interest expense |
(29,890) |
(76,897) |
(249,654) |
(234,821) |
Loss on extinguishment of
debt |
(114,023) |
-- |
(114,023) |
-- |
Net loss and comprehensive loss |
(1,881,670) |
(1,670,407) |
(4,303,600) |
(2,609,249) |
|
|
|
|
|
Loss per common share, basic and
diluted |
(0.08) |
(0.07) |
(0.18) |
(0.11) |
|
|
|
|
|
Weighted average number of
common shares outstanding, basic and diluted |
23,951,160 |
23,328,426 |
23,552,824 |
22,950,835 |
|
|
|
|
|
Intellipharmaceutics
International Inc. |
Condensed unaudited interim
consolidated statements of cash flows |
|
|
|
|
|
(Stated in U.S.
dollars) |
|
Three months ended |
Nine months ended |
|
August 31, 2015 |
August 31, 2014 |
August 31, 2015 |
August 31, 2014 |
|
$ |
$ |
$ |
$ |
|
|
|
|
|
Net loss |
(1,881,670) |
(1,670,407) |
(4,303,600) |
(2,609,249) |
Items not affecting cash |
|
|
|
|
Depreciation |
97,796 |
106,022 |
270,829 |
263,811 |
Stock-based
compensation |
24,384 |
113,132 |
75,553 |
1,579,730 |
Deferred shared
units |
8,171 |
4,335 |
25,417 |
17,399 |
Accreted interest on
convertible debenture |
(20,764) |
-- |
83,759 |
-- |
Loss on extinguishment of
debt |
114,023 |
-- |
114,023 |
-- |
Unrealized foreign exchange
gain (loss) |
44,306 |
26,109 |
2,895 |
(39,082) |
Change in non-cash operating assets &
liabilities |
|
|
|
|
Accounts receivable |
207,891 |
509,444 |
498,528 |
608,916 |
Investment tax credits |
(16,170) |
(64,940) |
(63,207) |
(225,029) |
Prepaid expenses, sundry assets
and other assets |
52,660 |
67,701 |
127,820 |
(51,915) |
Accounts payable and accrued
liabilities |
166,728 |
(524,239) |
537,429 |
158,664 |
Deferred revenue |
-- |
-- |
150,000 |
-- |
Cash flows (used in) operating
activities |
(1,202,645) |
(1,432,843) |
(2,480,554) |
(296,755) |
|
|
|
|
|
Financing activities |
|
|
|
|
Repayment of due to related
party |
-- |
-- |
-- |
(739,208) |
Repayment of capital lease
obligations |
(7,400) |
(15,292) |
(22,099) |
(42,829) |
Issuance of common shares on
at-the-market financing |
718,151 |
-- |
970,363 |
6,571,673 |
Proceeds from issuance of
shares on exercise of warrants |
562,500 |
-- |
562,500 |
462,500 |
Issuance of common shares on
option exercise |
8,695 |
5,008 |
167,962 |
116,984 |
Offering cost |
(115,278) |
(41,587) |
(253,016) |
(765,430) |
Cash flows from (used in) financing
activities |
1,166,668 |
(51,871) |
1,425,710 |
5,603,690 |
|
|
|
|
|
Investing activity |
|
|
|
|
Purchase of property and
equipment |
(174,643) |
(287,110) |
(360,030) |
(569,989) |
Cash flows used in investing
activities |
(174,643) |
(287,110) |
(360,030) |
(569,989) |
|
|
|
|
|
(Decrease) increase in cash |
(210,620) |
(1,771,824) |
(1,414,874) |
4,736,946 |
Cash, beginning of period |
3,029,721 |
7,269,356 |
4,233,975 |
760,586 |
|
|
|
|
|
Cash, end of
period |
2,819,101 |
5,497,532 |
2,819,101 |
5,497,532 |
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
Interest paid |
45,339 |
45,339 |
135,031 |
168,299 |
Taxes paid |
-- |
-- |
-- |
-- |
CONTACT: Company Contact:
Intellipharmaceutics International Inc.
Domenic Della Penna
Chief Financial Officer
416-798-3001 ext. 106
investors@intellipharmaceutics.com
Investor Contact:
ProActive Capital
Kirin Smith
646-863-6519
ksmith@proactivecapital.com